Connect with us

Current Affairs

It’s Actually Okay To Completely Ignore Bitcoin’s 1,400% Rally

mm

Published

on

Forgive me for sounding like a crank, but it’s okay to totally ignore the Bitcoin rally.

Sure Bitcoin’s up over 1,400% this year (that’s as of the time I started typing) and its market capitalization now significantly exceeds that of Procter & Gamble, the best performing stock in Forbes’ first 100 years of existence. Despite Bitcoin’s boom, the digital currency just doesn’t seem to have any impact on the important financial issues of the day, whether that’s saving, borrowing, or conducting everyday transactions.

If Bitcoin doesn’t influence how you save, how you borrow, or how you transact, then maybe there’s no point paying attention to its staggering rise in 2017. Now might be a good time to push against fears of missing out (FOMO) on the rally, with good reason.

Does Bitcoin really impact your portfolio or your financial plans? When it comes to retirement there are two major, trillion-dollar themes for savers. Nearly a decade after the financial crisis, Americans are returning to the stock market in droves, having been generally underinvested since the 2008 carnage and the market’s bottoming a year later. As people return to the market, they’re doing so using low-cost index mutual funds or exchange-traded funds, instead of high-priced managers. Broadly speaking, this a big positive.

After all, the stock market’s 10%-plus annualized total return over the past 100-years, and a less impressive 7% annual return since December 1997, is the growing bedrock of America’s retirement system. Big-data tools now show savers how they can plan their finances to meet retirement and other financial goals with a few mouse clicks. Innovations like target-date funds and ETFs are creating new levels of precision when building these plans. All the while, fees are falling fast and Wall Street’s take is mired a steep decline. These trends are being driven by the BlackRocks, Vanguards and Fidelitys of the world, in addition to robo advisors such as Betterment and Wealthfront.

To all of this, Bitcoin is utterly non existent: It has no influence on stock market returns, it isn’t part of the fee-disruption equation, 401k plans tracking the S&P 500 are doing just fine this year despite missing on “crypto”.

There’s talk of a stock market bubble with each new record high, but some of the fastest-rising companies on the S&P 500, from Apple to Facebook and Amazon, are luring the most careful investors like Warren Buffett to Glen Kacher (read our exclusive profile) and Stanley Druckenmiller due to their fundamentals. We’ll hear from time-to-time about some hedge fund guy buying Bitcoin, and I’ve even written a story or two about the newest Bitcoin bull, but generally the smart money remains in non-crypto assets.

The S&P 500 trades at a price of 25-times earnings and it carries a dividend yield of about 2%; it’s not cheap by historical standards but anyone who entered the market in the early 1960s at a similarly expensive valuation and stuck with their plans through good and bad times would likely be enjoying a bountiful retirement. At Forbes’ 100th birthday party, Buffett predicted the Dow will exceed $1,000,000 by the time we turn 200, and that’s possibly the safest prediction he’s ever offered.

READ MORE: Bitcoin, Blockchain And Billions

The same theme emerges in the big-short and long-term financial moves people have to make in their lives, for instance borrowing to buy a home, finance an education, or in making slightly smaller auto and big-ticket consumer purchases.

These can be major decisions and the current landscape is marked by plenty of “disruption”. Virtually all of it is coming from fintech startups, not cryptocurrencies and their attendant networks. Digital-first companies are becoming mainstays in America’s largest lending markets; competition is increasing, risk assessments are improving, transparency and seamlessness is rising, consumer costs are broadly plunging.

After all, it’s a new crop of companies like  Quicken Loans, SoFi, GreenSky, Credit Karma, LendingClub that are transforming the way everything from a home loan to a college education or pile of credit card debt is handled. Improving credit access is still one of the big non partisan topics of discussion in America and waves of novel solutions are emerging. Entire financing markets, from clean software interfaces originating loans all the way to new securitization markets to distribute debt to institutional investors have emerged in recent years. Bitcoin is nowhere to be found.

Even in payments and other basic transactions, there’s a growing menu of digital-first options that casts into question whether cryptocurrencies and their associated networks are actually that relevant.

When it comes to electronic payments, it is still Visa and MasterCard who are winning on a dollar basis. Payment volumes at Visa increased 41% in 2017 to $7.3 trillion, at MasterCard volumes rose 10% to $1.4 trillion last quarter. Cryptocurrencies seek to disrupt these networks, offering no-cost transactions, but the day-to-day flow of money seems to be falling to the incumbents and it is disrupting the use of cash.

READ MORE: Will This Battle For The Soul Of Bitcoin Destroy It?

Meanwhile, the market isn’t static. PayPal’s Venmo has made person-to-person payments cost free and utterly seamless, like a social network of money. Small businesses are gaining new options; Square recently reported a 31% quarterly increase in payment volumes as it offers merchant sellers access to better and lower cost transaction networks. The world’s most valuable private financial technology company is Stripe , another distruptor in e-commerce and payments.

Behind all of this, it must be said, is the rule of law.

If you get screwed you may have your day in court. Some entities are bound by investor protections and fiduciary standards. Depending on what’s being done, there’s also careful assessments of credit risk, identity, and the like. Yes these entrenched systems are the establishment, but that’s a major advantage.

Of course, cryptocurrencies like Bitcoin and their associated networks promise to disrupt it all. It is presented as potentially a new way to raise capital (goodbye Goldman bankers), a new peer-to-peer sharing tool for everything from data to real estate deals, a cheap alternative to transactions (sorry, greedy MasterCard), and even a novel take on the concept of currency itself. Some view Bitcoin as a store of value like gold, or a slightly damaged and possibly fake Leonardo Da Vinci painting. Others view it as part a sort of new world order liberated from tax authorities, governments, and money-printing central banks. Maybe it is the 2017 fear and volatility trade since the Cboe VIX index remains in single digits despite a profusion of global risk?

Everyday, price graphs that resemble the textbook definition of every bubble ever in history are bandied about as evidence of Bitcoin’s validity. Judging by the relentless and inexplicable gains, there are likely new converts to Bitcoin by the minute, or hour. The price rise may also cause skeptics to dig their heels further, increasing their bubble talk.

There’s another, possibly better option: You can simply stick to your plans and ignore Bitcoin. – Written by 

Current Affairs

Johnson & Johnson Moves to Limit Impact of Report on Asbestos in Baby Powder

Published

on

By

 Johnson & Johnson on Monday scrambled to contain fallout from a Reuters report that the healthcare conglomerate knew for decades that cancer-causing asbestos lurked in its Baby Powder, taking out full-page newspaper ads defending its product and practices, and readying its chief executive for his first television interview since investors erased tens of billions of dollars from the company’s market value.

J&J shares fell nearly 3 percent Monday, closing at $129.14 in New York Stock Exchange trading. That drop was on top of the 10 percent plunge that wiped out about $40 billion of the company’s market capitalization following the Reuters report Friday. J&J also announced Monday that it would be repurchasing up to $5 billion of its common stock.

Senator Edward Markey, a Massachusetts Democrat on the Environment and Public Works Committee, on Friday sent a letter to the head of the U.S. Food and Drug Administration calling on the agency to investigate the findings in the Reuters report to determine whether J&J misled regulators and whether its Baby Powder products threaten public health and safety.

J&J Chief Executive Alex Gorsky, in his first interview since the Reuters article was published, defended the company during an appearance on CNBC’s “Mad Money” with host Jim Cramer on Monday night. J&J knew for decades about the presence of small amounts of asbestos in its products dating back to as early as 1971, a Reuters examination of company memos, internal reports and other confidential documents showed. In response to the report, J&J said on Friday that “any suggestion that Johnson & Johnson knew or hid information about the safety of talc is false.”

A Monday full-page ad from J&J — headlined “Science. Not sensationalism.” — ran in newspapers including The New York Times and The Wall Street Journal. The ad asserted that J&J has scientific evidence its talc is safe and beneficial to use. “If we had any reasons to believe our talc was unsafe, it would be off our shelves,” the ad said.

J&J rebutted Reuters’ report in a lengthy written critique of the article and a video from Gorsky. In the written critique, posted on the company’s website, J&J said Reuters omitted information it supplied to the news organization that demonstrated the healthcare conglomerate’s Baby Powder is safe and does not cause cancer; that J&J’s baby powder has repeatedly been tested and found to be asbestos-free; and that the company has cooperated with the U.S. FDA and other regulators around the world to provide information requested over decades.

“Since tests for asbestos in talc were first developed, J&J’s Baby Powder has never contained asbestos,” Gorsky said in the video. He added that regulators “have always found our talc to be asbestos-free.”

A Reuters spokeswoman on Monday said the agency “stands by its reporting.”

Reuters’ investigation found that while most tests in past decades found no asbestos in J&J talc and talc products, tests on Baby Powder conducted by scientists at Mount Sinai Medical Center in 1971 and Rutgers University in 1991, as well as by labs for plaintiffs in cancer lawsuits, found small amounts of asbestos. In 1972, a University of Minnesota scientist found what he called “incontrovertible asbestos” in a sample of Shower to Shower. Other tests by J&J’s own contract labs and others periodically found small amounts of asbestos in talc from mines that supplied the mineral for Baby Powder and other cosmetic products into the early 2000s.

The company did not report to the FDA three tests by three different labs from 1972 to 1975 that found asbestos in the company’s talc.

The Reuters story drew no conclusions about whether talc itself causes ovarian cancer. Asbestos, however, is a carcinogen. The World Health Organization’s International Agency for Research on Cancer has listed asbestos-contaminated talc as a carcinogen since 1987. Reuters also found that J&J tested only a fraction of the talc powder it sold. The company never adopted a method for increasing the sensitivity of its tests that was recommended to the company by consultants in 1973 and in a published report in a peer-review scientific journal in 1991.

The ad J&J ran in newspapers Monday also pointed to an online talc fact page the company created with “independent studies from leading universities, research from medical journals and third-party opinions.”

That website has changed since early December, according to a Reuters review of online archives.

The website, for instance, no longer contains a section headlined “Conclusions from Global Authorities” that as recently as Dec. 5 listed organizations including the U.S. FDA, the European Union and Health Canada as among entities that have “reviewed and analyzed all available data and concluded that the evidence is insufficient to link talc use to cancer.”

On Dec. 14, the day Reuters published its report, that section of the website had been removed. It is not clear exactly when the online page changed.

The Canadian government released a draft report this month that found a “consistent and statistically significant positive association” between talc exposure and ovarian cancer. The draft report also said that talc meets criteria to be deemed toxic.

The draft report put forth proposed conclusions that are subject to a public comment period and confirmation in a so-called final screening assessment, Health Canada said.

If the conclusions are confirmed, Canadian officials will consider adding talc to a government list of toxic substances and implementing measures to prohibit or restrict use of talc in some cosmetics, non-prescription drugs and health products, Health Canada said.

A J&J spokeswoman said the company removed the website section after the Canadian government issued the draft report. “We chose to be conservative while that draft is under review,” the spokeswoman said.

While J&J has dominated the talc powder market for more than 100 years, the products contributed less than 0.5 percent of J&J’s $76.5 billion in revenue last year. – Reuters

  • Mike Spector, Lisa Girion and Ankur Banerjee 

Continue Reading

Current Affairs

South Africa’s Tamaryn Green is first runner-up at Miss Universe pageant

Published

on

By

 Catriona Gray from the Philippines was crowned Miss Universe on Monday, the fourth time the Southeast Asian country has won the international beauty pageant.

Gray, a 24-year-old Filipino-Australian model, won the title in the Thai capital Bangkok where the pageant included for the first time a transgender contestant.

“My heart is filled with so much gratitude. There were moments of doubt where I felt overwhelmed and I felt the pressure,” said Gray, who wore a red and orange dress that was inspired by Mount Mayon, a volcano that erupted this year.

Miss South Africa, Tamaryn Green, 24 was the first runner-up, followed by Miss Venezuela, Sthefany Gutiérrez, 19.

Gray was asked during the contest about her views on legalizing marijuana and replied that she supported it for medical uses.

After she was crowned, Gray told reporters the question was “definitely relevant” and “an active topic”, in an apparent reference to the war on drugs in the Philippines that has killed thousands of Filipinos and caused international alarm.

Gray said during the pageant that working in a Manila slum had taught her to find beauty in difficult situations.

“If I could teach people to be grateful, we could have an amazing world where negativity could not grow and foster, and children would have a smile on their face,” she said.

Miss Spain, Angela Ponce, 27, made history as the first transgender contestant in the 66-year-old pageant.

Gray is the fourth Filipina to win Miss Universe and the second in three years. The pageant was shown live on the country’s biggest television network and dominated social media.

Salvador Panelo, spokesman for President Rodrigo Duterte, said her win would put the country on the world map for its “beauty and elegance.”

“In her success, Miss Philippines has shown to the world that women in our country have the ability to turn dreams into reality through passion, diligence, determination and hard work,” he said.

The Philippines previously won Miss Universe titles in 2015, 1973 and 1969. – Reuters

  • Patpicha Tanakasempipat and Neil Jerome Morales 

Continue Reading

Current Affairs

Youtube, Under Pressure for Problem Content, Takes Down 58 Million Videos in Quarter

Published

on

By

YouTube took down more than 58 million videos and 224 million comments during the third quarter based on violations of its policies, the unit of Alphabet Inc’s (GOOGL.O) Google said on Thursday in an effort to demonstrate progress in suppressing problem content.

Government officials and interest groups in the United States, Europe and Asia have been pressuring YouTube, Facebook Inc (FB.O) and other social media services to quickly identify and remove extremist and hateful content that critics have said incite violence.

The European Union has proposed online services should face steep fines unless they remove extremist material within one hour of a government order to do so.

An official at India’s Ministry of Home Affairs speaking on the condition of anonymity on Thursday said social media firms had agreed to tackle authorities’ requests to remove objectionable content within 36 hours.

This year, YouTube began issuing quarterly reports about its enforcement efforts.

As with past quarters, most of the removed content was spam, YouTube said.

Automated detection tools help YouTube quickly identify spam, extremist content and nudity. During September, 90 percent of the nearly 10,400 videos removed for violent extremism or 279,600 videos removed for child safety issues received fewer than 10 views, according to YouTube.

But YouTube faces a bigger challenge with material promoting hateful rhetoric and dangerous behavior.

Automated detection technologies for those policies are relatively new and less efficient, so YouTube relies on users to report potentially problematic videos or comments. This means that the content may be viewed widely before being removed.

Google added thousands of moderators this year, expanding to more than 10,000, in hopes of reviewing user reports faster. YouTube declined to comment on growth plans for 2019.

It has described pre-screening every video as unfeasible.

The third-quarter removal data for the first time revealed the number of YouTube accounts Google disabled for either having three policy violations in 90 days or committing what the company found to be an egregious violation, such as uploading child pornography.

YouTube removed about 1.67 million channels and all of the 50.2 million videos that were available from them.

Nearly 80 percent of the channel takedowns related to spam uploads, YouTube said. About 13 percent concerned nudity, and 4.5 percent child safety.

YouTube said users post billions of comments each quarter. It declined to disclose the overall number of accounts that have uploaded videos, but said removals were also a small fraction.

In addition, about 7.8 million videos were removed individually for policy violations, in line with the previous quarter. – Reuters

– Paresh Dave and Sankalp Phartiyal 

Continue Reading

Trending