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Bitcoin bull outlines 7 steps to more fiscal stimulus and higher BTC prices

Bitcoin’s drop below $30,000 has sparked worries that it is heading to $20,000 next, but is such a massive drop feasible against the backdrop of current macro fundamentals?
A recent sell-off in the Bitcoin (BTC) market pushed its price

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Bitcoin's drop below $30,000 has sparked worries that it is heading to $20,000 next, but is such a massive drop feasible against the backdrop of current macro fundamentals?

A recent sell-off in the Bitcoin (BTC) market pushed its prices below the key psychological support of $30,000.

While the cryptocurrency's move downhill prompted many analysts, including Luno exchange's Vijay Nayyar and Kinetic Capital's Jehan Chu, to predict a further depressive move below $25,000, Anthony Pompliano offered a contrasting bullish outlook.

The Morgan Creek Digital Assets founder pitted risk-on markets against the fears of the fast-spreading Delta variant of COVID-19. He noted that governments, on the whole, would introduce "more aggressive monetary stimulus" programs should the new coronavirus strain spread at the scale of its Alpha version.

"History is not necessarily an indicator of the future, but it is hard to imagine a scenario where if we had a second wave of lockdowns, we wouldn’t also get more aggressive monetary stimulus efforts," Pompliano wrote in a newsletter.

"If that occurred, we would likely see all assets continue to go higher and higher."

In saying so, Pompliano envisioned that the road to more dollar liquidity would like come in seven successive stages, as shown in the snapshot below:

The seven potential stages ahead as the new Delta variant clouds recovery hopes. Source: Anthony Pompliano Newsletter

Risk-on FOMO expected

Pompliano's statements appeared as the Bitcoin market fell in sync with other risk-on assets across the globe on July 2.

For instance, all three Wall Street indexes — the S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average — logged their steepest declines in weeks. Also, gold fell to as low as $1,795.12 an ounce but later recovered to $1,812.145 an ounce.

Bitcoin slipped in tandem with the U.S. equity market on July 20. Source: TradingView

Meanwhile, United States government bonds rallied alongside the dollar, showing that investors are heading for safe-havens amid the global market turmoil.

Behind the rout, global media outlets reported, was a growing list of worries about economic recovery. The Delta variant of COVID-19 has spread rapidly, reigniting the dialogue in several countries about whether authorities should reimpose lockdown and curb economic activity.

"The hope was that [COVID-19] vaccines would provide us with the endgame," Mohammed Kazmi, a portfolio manager at Union Bancaire Privee, told the Financial Times. "Now investors are looking at the UK and there’s a bit of fear with regards to reopening so aggressively when cases are still so high."

Kazmi added that markets are now stepping back from hopes of a V-shaped recovery and are feeling uncertain about the future of their economies.

Related: Stock-to-flow model possibly invalidated as Bitcoin price loses $30K

Pompliano's comments also appeared as the Federal Reserve flirted with the idea of hiking its near-zero lending rates by the end of 2023 to curb rising inflation.

Additionally, several central bank officials also favored the idea of tapering their aggressive $120 billion per month asset purchase program, although Fed Chairman Jerome Powell clarified that the Fed intends to run the quantitative easing policy hot until the U.S. economy recovers completely.

James Wo, founder and chief executive officer of global blockchain and digital asset investment firm Digital Finance Group also noted that even though the Bitcoin industry has encountered downside volatility during this current market cycle, the fundamentals that have driven the value of its and other markets higher all across 2020 continue unaffected. He added:

"Any combination of narratives that have brought digital assets to this discounted price can be checked off of lists of FUD that would have eventually affected the price of the whole market."

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Estimating US Recession Risk Using Economic Data For States

What are the choices for monitoring and estimating recession risk? Slightly lower than the number of stars in the universe. Ok, I’m exaggerating, but…

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What are the choices for monitoring and estimating recession risk? Slightly lower than the number of stars in the universe. Ok, I’m exaggerating, but not much. The good news: the search for robust, relatively reliable indicators narrows the field dramatically. But there’s always more to learn, in part because the supply of data sets is vast, increasingly so. Which brings me to another indicator that looks promising: state coincident indexes.

Every state’s economy is, in some degree, unique, although the gravitational pull of the national economy casts a long shadow. Tracking each state economy separately, and then aggregating the results, provides a different spin on the US business cycle compared with national indicators. Think of it as a bottom-up model vs. the standard top-down approach via US retail sales, industrial production, etc.

Conveniently, the Philly Fed publishes monthly coincident indicators for each state. Aggregating the 50 signals into a composite index provides a somewhat different view of the US business cycle vs. traditional top-down metrics. There are several ways to process the numbers – my preference, shown in the chart below, is a 3-month-change model. If a state’s 3-month change is negative (positive), the signal is negative (positive). Summing the negatives and positives provides a national profile. The current reading is 0.48 — in other words, 48% of the states are posting negative 3-month changes for their respective coincident indicator. As shown below, the composite reading maps fairly closely with NBER-defined downturns, and so the current signal is issuing a warning, albeit a warning that has yet to provide what might be thought of as passing the point of no return. But it’s close.

The readings vary from 0 (no negative 3-month changes) to 1.0 (all 50 states are reporting negative 3-month changes). A quick review of the historical record suggests that the US is on the verge of slipping into recession.

But before we ring the alarm bell, there are some caveats to consider. First, a similarly high reading 20-plus years ago turned out to be a false signal. The next couple of months will likely determine if a repeat performance is brewing, or not.

Second, no one indicator is flawless, as we’ve learned over the last couple of years – especially in recent history, when pandemic-related events have created no shortage of macro surprises.

Another reason to reserve judgment, at least for now: a range of other business cycle indicators tracked in The US Business Cycle Risk Report (a sister publication of CapitalSpectator.com) continue to show a clear growth bias. But as reported in this week’s issue, there are some nascent signs of softer economic activity and so it’s possible that the coincident state indicators are an early warning that the tide is shifting.

The most reliable methodology for estimating recession risk in real time is building an ensemble model that combines various modeling applications that are complimentary. Although any one model will excel at a given point in time, quite often the best-performing indicator changes through time. To minimize the risk that’s inherent in any one signal, The US Business Cycle Risk Report crunches the numbers on multiple indicators, which has proven to be close to optimal for balancing the need for timely signals that minimize false signaling.

Despite the caveats, the coincident state model adds another dimension to the mix and provides some complimentary input to The US Business Cycle Risk Report’s existing suite of indicators. Accordingly, I’ll be adding the composite state coincident data to the newsletter’s weekly updates.

The next batch of coincident state updates for January is scheduled for later this month. Meantime, I’ll be carefully reviewing the incoming data for fresh clues that support or reject the suggestion that trouble’s brewing via the state coincident indicators.


How is recession risk evolving? Monitor the outlook with a subscription to:
The US Business Cycle Risk Report


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Air Canada Says Freight Demand Beginning To Improve

Air Canada Says Freight Demand Beginning To Improve

By Eric Kulisch of FreightWaves

Air Canada expects the slow recovery in cargo volume…

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Air Canada Says Freight Demand Beginning To Improve

By Eric Kulisch of FreightWaves

Air Canada expects the slow recovery in cargo volume that began in the fourth quarter to quicken in 2024, aided by the addition of two more freighter aircraft, but doesn’t anticipate gains in pricing power, Mark Galardo, executive vice president for network planning and revenue management, said Friday.

The cargo division within Air Canada (TSX: AC) currently operates five converted and two factory-built Boeing 767-300 freighters. It is scheduled this year to receive two cargo jets converted from passenger configuration, but delivery of a third plane has been delayed until 2025 because of lingering supply chain and labor challenges faced by aerospace manufacturing companies, said Galardo on the company’s fourth-quarter earnings call.

The company nonetheless expects cargo capacity to increase 6% to 8% this year with the addition of the two freighters and more passenger aircraft that also carry cargo. The converted freighters are retired Air Canada passenger jets that are being retrofitted by aftermarket aerospace firms for carrying large containers in the main cabin area.

Cargo revenue fell 15% year over year in the fourth quarter to US$181 million on soft demand and lower yields, Air Canada reported. The three-month period represented an improvement from prior months as the downturn in freight transportation that gripped the air logistics industry for nearly 18 months began to ease. Full-year cargo revenue fell 27% to $253.7 million.

At the end of 2023, Canada’s flag carrier operated four more 767 freighters than at the end of 2022. Freighters were reintroduced at the company two years ago. Increased freighter operations to Central and South America and to Europe partially offset the year-over-year decline. Air Canada also enhanced its interline cooperation with Emirates SkyCargo, which allows customers to book interline cargo shipments through the Emirates SkyCargo flights, including between the Americas and Southeast Asia and India, through key European hubs. 

“We had a bit of a slower start in January, but as we look into February and beyond we’re starting to see volumes pick up and yields also pick up. And our 2024 assumption on cargo is more volume-driven than yield-driven. So we’re starting to see some positive indicators,” Galardo told analysts. “We’ve taken all the necessary measures to position ourselves to take advantage of the recovery. This includes strategically adjusting our freighter plan so that we can keep focusing on proven overall results for the long term and on maximizing cargo network value for our entire fleet.”

Air Canada in late September canceled an order with Boeing for two 777-200 production freighters because of the reversal in airfreight demand following the pandemic-fueled boom for air transport that lasted until early 2022. It then ordered 18 787-10 Dreamliners, including two that were swapped for the 777 freighters. Management, at the time, reiterated its commitment to operating freighters, saying that it needed to take a more measured approach to fleet expenditures and keep more cash available for other purposes.

Air Canada expects another leap in cargo business when the 787-10s begin entering the fleet in late 2025. But ongoing safety and manufacturing problems at Boeing could upset the delivery schedule. Production flaws have previously prevented customers from receiving Dreamliners on time.

“As we eventually receive the larger 787-10s, taking advantage of global cargo flows through our hubs will become an important lever for further diversifying revenue streams,” said Galardo. 

Air Canada performed well on cargo against its peers during the fourth quarter. Delta Air Lines and American Airlines saw cargo revenue slide 24% during the period, and Korean Air said its cargo sales fell nearly 29%. The percentage change in revenue at Air Canada was on par with the 14.8% decline at United Airlines. On a total dollar basis, Air Canada cargo revenue was less than that of the other carriers. The three major U.S. airlines are much larger than Air Canada but also do not have a dedicated cargo fleet. Delta was the closest to Air Canada at $188 million in revenue.

Overall, Air Canada generated $3.9 billion in revenue, up 11% from the prior year, during the final three months of 2023. But earnings before interest, taxes, depreciation and amortization of $386.4 million came in below expectations. On an adjusted basis, the company lost $32.6 million versus a loss of $162 million the year before. Higher wages, maintenance costs and flying volumes pushed expenses up 8%. Inflation is expected to increase costs another 4.5% to 5% in 2024, offset in part by productivity gains.

Tyler Durden Tue, 02/20/2024 - 06:30

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CCP Tightens Exit Controls Amid Sharp Increase In Citizens Fleeing China

CCP Tightens Exit Controls Amid Sharp Increase In Citizens Fleeing China

Authored by Alex Wu via The Epoch Times,

The sharp increase of Chinese…

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CCP Tightens Exit Controls Amid Sharp Increase In Citizens Fleeing China

Authored by Alex Wu via The Epoch Times,

The sharp increase of Chinese citizens joining the “run” movement—fleeing China by both legal and illegal means—has attracted international attention since the Chinese Communist Party’s (CCP) three-year draconian “zero-COVID” lockdowns that caused countless humanitarian tragedies.

Most of them have taken various routes to the United States, their ideal destination.

Meanwhile, the CCP is reported to have tightened control over Chinese citizens’ overseas travel to save face as so many citizens are fleeing, in contrast to the CCP’s claim of “confidence” in its system.

Different Routes

According to media reports and what fleeing citizens told The Epoch Times, Chinese nationals at various economic strata take different routes into the United States.

People with sufficient funds can enter Mexico through a Schengen visa or a short visit visa. Some use a Korean visa to enter Panama without a visa, and some people directly obtain a Mexican visa under the arrangement of an agency and cross the U.S. southern border via the shortest route.

Other Chinese have taken longer routes, first flying to Thailand, then to Turkey, then to Ecuador. Others fly to Turkey via Hong Kong.

Mr. Lu, who is doing business in Thailand, told The Epoch Times that the Chinese regime has tightened its exit controls. His full name, along with others mentioned in this story, is being withheld for his safety.

If people join a tour group, they won’t be bothered by border control agents. But people traveling independently will most likely be interrogated for extended periods by customs about their reasons for going to Thailand.

“The authorities are worried that after people go to Thailand, they may go from Thailand to Turkey, South America, and then enter the United States,” he said. “Some people from Chengdu, Luoyang, and other parts of China told me that when they were leaving China as individuals, they’re all interrogated, the shortest questioning time was 25 minutes.”

Mr. Lu believes that the reason why customs have interrogated people like this was that they must have received orders from above to probe people’s reasons for leaving.

Mr. Zhang, who just fled China, told The Epoch Times that when they left China via Turkey in September 2023, it was relatively normal and there were not many restrictions. But since early December last year it started to tighten restrictions.

Migrants walk along the US side of the United States border wall after crossing through an open gap in Jacumba, Calif., on Dec. 6, 2023. (John Fredricks/The Epoch Times)

Mr. Zhang said that one of his friends went to Turkey in December, but the situation was different.

“He bought a ticket that required a layover in Chengdu in China. That is, he flew from Bangkok to Chengdu and then to Turkey,” he said. “When he entered Chengdu Airport, the Chinese airport staff stopped him and tried to drag him to the Chinese domestic area, preventing him from leaving. Fortunately, he stayed with another passenger who is Turkish in the international area in the airport and didn’t cross to the Chinese side at the airport. Once he enters the the Chinese area at the airport, he will definitely not be able to get out of the country. He thought about it now and felt it’s rather scary.”

CCP Tightens Control to Save Face

Mr. Yang, a Chinese expat in Thailand, told The Epoch Times, “Those Chinese who have the means to flee, most of them have already left after the CCP abandoned the COVID-19 controls. There are still more people leaving now because they needed time to take care of families, children, real estate, and businesses in China, so they are leaving slowly.” He said that it is certain that the communist regime is trying to suppress this, because there are too many Chinese people fleeing now.

“Many Chinese people haven’t been interviewed by the CCP’s national security. They haven’t attracted the attention of the CCP, or were not its focus, so they were able to leave. Those people who have been interviewed by the national security are restricted from leaving China, so they have to find ways to leave the country illegally,” he said.

Mr. Wei, who just came to the United States last year, told The Epoch Times, “I learned from many people that the exit control at many ports in China is currently being tightened.”

Li Beixing, who traveled to the United States last year, told The Epoch Times, “The CCP’s customs staff asked me to take out everything from my bag, and then they took my cellphone to check my communication records. They interrogated me for at least two hours, asking every question they could think of.”

Lawyer Liang Shaohua, former chief compliance officer of a mainland asset management company, told The Epoch Times that everyone in mainland China could apply for a passport before, but that seems to no longer be the case. Those who have a passport are also not allowed to renew it.

A post on Chinese social media has attracted wide attention in recent days. It shows that Lianjiang County in Fujian Province was having a meeting titled “Lianjiang County’s deployment meeting to crackdown on smuggling to the United States and the control of key personnel involved in fraud” to focus on the “run” movement in the county.

Mr. Wu from Fujian told The Epoch Times that what happened in Lianjiang is true. “If someone is caught there, they will be fined into bankruptcy,” he said.

Mr. Wu said that Lianjiang County is the hometown of overseas Chinese, and is a place known for smuggling people out of the country. After three years of COVID-19 lockdowns and strict controls, a large number of people have begun to flee again, and many people are being smuggled out to other countries, with most fleeing to the United States.

“Why [does the CCP] need to crack down on it? People are all gone, there is no one here anymore, and it sounds bad in the international community,” Mr. Wu said.

Mr. Li in Lianjiang also confirmed with The Epoch Times Lianjiang’s supression notice, saying that it’s been particularly strict recently. “It is because the CCP is afraid of losing face, so the higher-ups are suppressing local officials, and now people are caught for smuggling out they will be sentenced to prison.”

A Border Patrol agent apprehends a Chinese couple that just waded across the Rio Grande from Mexico into Eagle Pass, Texas, on Jan. 25, 2022. (Charlotte Cuthbertson/The Epoch Times)

International human right group Safeguard Defenders published a report in last May that the CCP “is increasingly resorting to exit bans to punish human rights defenders (HRDs) and their families, hold people hostage to force targets overseas to come back to China (a practice called persuade to return, a form of transnational repression), control ethnic-religious groups, engage in hostage diplomacy and intimidate foreign journalists.”

The CCP’s exit ban and others are “illegitimate and violate the Universal Declaration of Human Right’s principle of Freedom of Movement,” the report pointed out.

Tyler Durden Tue, 02/20/2024 - 02:00

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