The latest version of regulatory and Wall Street whack-a-mole is, as usual, going to miss the target.
In the “never-ending battle for truth, justice, and the American way” – and, oh yeah, profits – big investment and trading banks announced a major new change. All the big banks you know and love are about to charge the money managers they execute trades for, and service in ways most of you have no idea, an arm and a leg for research.
It doesn’t matter if the research is ineffective, which most of it is. It doesn’t matter if it’s valuable insider-type information, which some of it sometimes is. Banks are going to charge a pretty penny for it.
Why? Because it’s worth it, darn it.
And because new regulatory rules will force them to hold their hands out.
If you want a shot at making fantastic gains, there’s a form of investing that you should consider if you haven’t already.
An initial coin offering, or an ICO, differs from investing in an initial public offering (IPO) in a few major ways.
For one thing, you probably can’t get insider stock with an IPO. But with ICO, you are absolutely an insider. With an ICO, it doesn’t matter what the “project” you’re investing in does, makes, or sells. It’s not a company, and it doesn’t exist in any traditional entity form.
And when it comes to the value of the new-fangled cryptocurrency coins or “tokens” you get for your investment, their value can rise exponentially.
Bitcoin, the well-known and most widely “circulated” cryptocurrency, is grabbing a lot of attention lately.
Here’s the thing about Bitcoin: It’s not an investment. It’s merely a tradable thing, that’s all. The same goes for all the other wannabe legal tender cryptocurrencies.
The new attention is coming from the fact that they’ve all soared in price… Or value, or whatever they calculate their worth against.
Goldman Sachs Group, Inc. (NYSE:GS), arguably the most elite and most profitable trading shop, investment bank, and government puppet-master in Wall Street’s checkered history, is weighing setting up a trading operation and sales desk dedicated to bitcoin and other cryptocurrencies.
But that flies in the face of what other heavy-hitters are saying. Jamie Dimon, CEO of JPMorgan Chase & Co. (NYSE:JPM), the largest bank in the United States with its own formidable global trading operations, said only two weeks ago that Bitcoin was a “fraud” and he’d fire any employee who traded it for being “stupid.”
So, what gives?
It’s simple really. Bitcoin isn’t an investment-grade anything. It’s a tradable “instrument” like gold, or carbon credits, or tulips. The reality is that both Goldman and JPMorgan are correct, but only if you understand the nuance of this brand new situation.
While the country slowly starts to recover from numerous natural disasters, there was no chance to catch our collective breath. There was a Federal Open Market Committee meeting. There are threats abroad. There have been plenty of promises coming from the Administration.
The month is coming to an end, but it doesn’t appear as though anything is slowing down. With that said, I figured now would be a good time to do another Q&A.
We really appreciate all of our readers and subscribers here at Money Map Press. We especially love hearing from you, so don’t be afraid to comment on any of the articles. And we especially love hearing if you find any success from acting on our expertise, so make sure to keep us in the loop. We want to hear it all.
I found some incredible questions in the comments section and in the emails my readers send, and some of them I needed to answer. From which financials to invest in, to where you should be placing your stops, to the market’s personality, there is a lot to touch on.
Of all the data in the just-issued Federal Reserve Statistical Release Z.1: Financial Accounts of the United States Q2 report, the fact that households and non-profits have 35.7% of their total financial assets in stocks was most surprising.
That’s the second highest percentage of stock holding for households on record, compared to the high of 42% in 2007, just before markets crashed.
Watching the percentage of households’ financial assets parked in stocks increase this late in “The Most Hated Bull Market in History” is important for two reasons.
It’s either telling us that the end is near, or that this time is different.
What we know about Equifax being hacked is frightening.
What the public doesn’t know, however, is far more frightening. Equifax had been trying to limit its own financial exposure and culpability in the event of a hack.
Besides spending millions of dollars on lobbying, Equifax’s PAC (political action committee) has been doling out money to legislators who, in turn, write bills to protect the company from consumers suing if their data is stolen and from regulators who could investigate and fine the company in response to negligence.
In fact, the day Equifax reported it had been hacked, a House Financial Services panel was discussing a bill being pushed by Equifax to limit credit reporting companies’ liability if hacked.