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Peter Schiff: Are We Close To Exhausting The ‘Bull Market’ In Stocks?

Peter Schiff: Are We Close To Exhausting The ‘Bull Market’ In Stocks?

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Peter Schiff: Are We Close To Exhausting The 'Bull Market' In Stocks? Tyler Durden Mon, 06/22/2020 - 15:35

Via SchiffGold.com,

On Friday, the Dow Jones was up around 400 points early in the day, but closed down just over 200 points. Meanwhile, gold had a solid rally that held up. The yellow metal was up about $20 on the day.

Could this be a sign of things to come? In his podcast over the weekend, Peter said he thinks it just might be.

I think the action in the stock market and the gold market Friday potentially is telling as to the future course of both markets.

Some will argue the late stock market selloff was due to quadruple expiration of various options and futures contracts that happens every quarter.

But I think beneath the surface, I think the market action actually is telling you, potentially, that we have exhausted this bear market rally in the stock market.”

Gold closed the day around $1,744 an ounce. This is the highest weekly close of the entire stock market bull run that started after the March plunge.

So, gold is continuing to look like its getting ready to break out. … This might have been a significant day and week in indicating that the stock market is about to break down, and gold and gold stocks are about to break out. “

For one thing, a lot of the initial economic news surrounding the reopening has been better than expected. This has juiced the stock market rally. People had prepared for the worst, but so far, they haven’t gotten the worst.

But people forget that before the pandemic, the stock market was already priced for perfection. It was extremely overvalued.

There is no reason for the market to return to the level that it occupied prior to the collapse because it never should have occupied that territory in the first place.”

The real problem will come when people start to realize we’re not recovering to where we were. We’ll be recovering to a recession/depression.

Because the economy was going to turn down even if we never had COVID-19, even if we didn’t have these mandated business shutdowns. We were long overdue for a recession anyway. We had the biggest expansion in history. A recession was going to start. To think that that recession is already over – that somehow a recession that began worse than any in US history even worse than the Great Depression –  that it’s already over, that it’s going to be a one, two quarter phenomenon, that is ridiculous. The recession started with a bang for a reason because it is going to last for a long, long time and be much worse than anybody imagined.”

At some point, this will have to be factored into stock prices. Peter said he thinks this will be coupled with a breakout to the upside for gold and gold stocks.

There is another shoe that needs to drop – a breakdown in the US dollar. Several people in the mainstream have warned about this in recent weeks. Yale economist Stephen Roach’s warned that “the era of the US dollar’s ‘exorbitant privilege’ as the world’s primary reserve currency is coming to an end.” Meanwhile, Guggenheim Investments Chief Investment Officer Scott Minerd said that while “there are no signs the world is questioning the value of the US dollar” right now, it’s clear that the greenback is  “slowly losing market share as the world’s reserve currency.”

Peter agrees. He said he thinks the dollar is on the precipice of a significant decline.

The biggest player in all of this is the Federal Reserve. Jerome Powell testified before both the Senate and House last week and promised that the extraordinary monetary policy will remain in play. As Peter pointed out in a podcast last week, Powell’s comments revealed an ugly truth. The Fed’s policy is not about the economy. It’s about propping up Wall Street.

At some point, the failure of the Fed’s policy will come to light. Powell admitted there is no plan to shrink the balance sheet. Remember, it was the anticipation of normalization that caused the dollar to bounce back and gold to sell off after the 2008 crisis.

That whole bubble, that whole recovery was predicated on the ability of the Fed to shrink its balance sheet and normalize interest rates. Well, now that everybody should know, because the Fed has told them that neither of those things are ever going to happen, the bottoms got to fall out of the dollar and gold’s going to go through the roof, and this whole house of cards is going to come tumbling down.”

Peter also talked about what he sees as over-optimism in the housing market and why a good Fed chair could never be popular in bad times.

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VanEck to donate 10% of profits from Ether ETF to core developers

The Protocol Guild, a team of over 150 Ethereum core developers, will be the beneficiary. VanEck argues that asset managers should give back some Ether…

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October 1, 2023

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The Protocol Guild, a team of over 150 Ethereum core developers, will be the beneficiary. VanEck argues that asset managers should give back some Ether ETF proceeds to the community.

Global asset manager VanEck will donate 10% of all profits from its upcoming Ether futures exchange-traded fund (ETF) to Ethereum core developers for 10 years, the company announced on X (formerly Twitter) on Sept. 29. 

The beneficiary will be the Protocol Guild, a group of over 150 developers maintaining Ethereum’s core technology. According to VanEck, it’s only fair for asset managers to return part of their proceeds to the community building the crypto protocol. It stated:

“If TradFi stands to gain from the efforts of Ethereum’s core contributors, it makes sense that we also give back to their work. We urge other asset managers/ETF issuers to consider also giving back in the same way.“

With this move, VanEck joins other crypto-native communities supporting the Ethereum network, including Lido Finance, Uniswap, Arbitrum, Optimism, ENS Domains, MolochDAO and Nouns DAO.

According to a public dashboard tracking donations sent to the Guild’s mainnet, 4,846 contributions have generated over $12 million in donations. Funds are then distributed among its members according to a weighted ratio based on their contribution periods.

The network core developers are reportedly working on Ethereum Improvement Proposal EIP-4844 (Proto-Danksharding). The upgrade will introduce a new kind of transaction type to Ethereum, promising to reduce transaction fees for layer-2 protocols.

VanEck disclosed its upcoming Ethereum Strategy ETF on Sept. 28, saying it will invest in Ether futures contracts. The fund will be actively managed by Greg Krenzer, head of active trading at VanEck, and is expected to be listed on the Chicago Board Options Exchange in the coming days.

Other traditional investment firms set to offer exposure to Ether futures include Valkyrie and Bitwise, while the line for a spot Ether ETF keeps growing with Invesco Galaxy, ARK 21Shares and VanEck waiting for regulatory approval. The United States Securities and Exchange Commission (SEC) recently delayed a decision on whether to approve a spot Ether product until December.

Magazine: Joe Lubin — The truth about ETH founders split and ‘Crypto Google’

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FTX exploiter moved over $17M in ETH in the last 24 hours

A significant portion of the 7,749 ETH, worth roughly $13 million, was directed toward the THORChain router and Railgun contract.
According…

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October 1, 2023

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A significant portion of the 7,749 ETH, worth roughly $13 million, was directed toward the THORChain router and Railgun contract.

According to recent information from Spot On Chain, an address linked to the FTX exploit identified as 0x3e9, has conducted transfers exceeding 10,000 Ether (ETH), worth roughly $17 million, across five different addresses since Sept. 30. The addresses had remained inactive for several months before the recent activity.

Within these transactions, a significant portion of 7,749 ETH, equivalent to $13 million, was directed toward the Thorchain router and Railgun contract. Furthermore, the exploiter engaged in a swap involving 2,500 ETH, valued at $4.19 million, converting it into 153.4 tBTC at an average rate of $27,281 per token. This address, which has recently become active, has exhibited noteworthy activity and is anticipated to continue transferring ETH, most likely to Thorchain.

At the time of the initial hack on Saturday, Sept. 30, the approximate losses amounted to nearly 50,000 ETH. This incident occurred just a short while before SBF's criminal trial scheduled for Oct. 2023.

Nevertheless, these occurrences have generated a significant amount of downward pressure on the ETH price, which currently maintains a level slightly above $1,650. This situation arises as the market anticipates the introduction of Ethereum futures ETFs on Monday, Oct. 2.

FTX co-founder Sam Bankman-Fried, commonly known as SBF, is scheduled to go to trial in October. This comes after his arrest in The Bahamas and subsequent extradition to the United States, marking several months since these events occurred.

The trial is expected to last for six weeks, beginning with the selection of the jury on Oct. 3, followed by the initial court proceedings on Oct. 4. Bankman-Fried faces a total of seven charges connected to fraudulent activities, comprising two substantive charges and five conspiracy charges.

Related: Valkyrie backtracks on Ether futures contract purchases until ETF launch

During the legal proceedings, the FTX founder has consistently pleaded not guilty to all allegations. Despite numerous attempts to secure temporary release, Bankman-Fried continues to be held in custody at the Metropolitan Detention Center. His most recent request for release was denied by Judge Lewis Kaplan, citing concerns about the possibility of him fleeing.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

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SEC initiates legal action against FTX’s auditor

The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor…

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October 1, 2023

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The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor independence.

The United States Securities and Exchange Commission (SEC) has commenced legal proceedings against an accounting firm that had provided services to cryptocurrency exchange FTX before its bankruptcy declaration.

According to a Sept. 29 statement, the SEC alleged that accounting firm Prager Metis provided auditing services to its clients without maintaining the necessary independence as it continued to offer accounting services. This practice is prohibited under the auditor independence framework.

Extract from the SEC's September 29 statement. Source: SEC

To prevent conflicts of interest, accounting and audit tasks must be kept clearly separate. However, the SEC claims that these entwined activities spanned over a period of approximately three years:

“As alleged in our complaint, over a period of nearly three years, Prager’s audits, reviews, and exams fell short of these fundamental principles. Our complaint is an important reminder that auditor independence is crucial to investor protection.”

While the statement doesn't explicitly mention FTX or any other clients, it does emphasize that there were allegedly "hundreds" of auditor independence violations throughout the three-year period.

Furthermore, a previous court filing pointed out that the FTX Group engaged Metis to audit FTX US and FTX at some point in 2021. Subsequently, FTX declared bankruptcy in November 2022. 

The filing alleged that since former FTX CEO Sam Bankman-Fried publicly announced previous FTX audit results, Metis should have recognized that its work would be used by FTX to bolster public trust.

Related: FTX founder’s plea for temporary release should be denied, prosecution says

Concerns were previously reported about the material presented in FTX audit reports.

On Jan. 25, current FTX CEO John J. Ray III told a bankruptcy court that he had “substantial concerns as to the information presented in these audited financial statements.”

Furthermore, Senators Elizabeth Warren and Ron Wyden raised concerns about Prager Metis' impartiality. They argued that it functioned as an advocate for the crypto industry.

Meanwhile, a law firm that provided services to FTX has come under scrutiny in recent times.

In a Sept. 21 court filing, plaintiffs allege that U.S. based law firm, Fenwick & West, should be held partially liable for FTX's collapse because it reportedly exceeded the norm when it came to its service offerings to the exchange.

However, Fenwick & West asserts that it cannot be held accountable for a client's misconduct as long as its actions remain within the bounds of the client's representation.

Magazine: Blockchain detectives: Mt. Gox collapse saw birth of Chainalysis

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