Bitcoin has struggled to find support in the U.S. government, with president Donald Trump, along with Treasury secretary Steven Mnuchin, leading the criticism.
Now, it’s been revealed the U.S. Department of Defense has wargamed scenarios involving a Generation Z rebellion that uses bitcoin to undermine and evade “the establishment.”
In the Pentagon war game, young people born between the mid-1990s and early 2010s use cyber attacks to steal money and convert it to bitcoin, documents published by investigative news site The Intercept revealed.
Bryan Fisher, 16, left, and Stephen Smith, 15, of Tenino, Wash., keep occupied by playing video games in a stall near their cattle at the Puyallup Fair in Puyallup, Wash., Wednesday, Sept. 17, 2003. The largest fair in Washington will continue through Sept. 21.
A small town in the state of Washington decided to print its own currency amid the coronavirus pandemic, according to The Hustle.
What’s going on?
Tenino, Washington, has decided to release its own currency during the coronavirus pandemic, which damaged the city completely.
The pandemic hurt local businesses. “Residents couldn’t afford groceries. Long lines snaked outside the local food bank. For more than a month, the downtown area looked almost abandoned,” The Hustle reports.
And then it happened: the town’s mayor, Wayne Fournier, encouraged the town to create its own currency. He put $10,000 aside to release to low-income residents.
A worker paints over a Louis Vuitton storefront, boarded up after the coronavirus outbreak, on March 30 in San Francisco.
The wealthiest American households are keeping a tight grip on their purse strings even as their lower-income counterparts are spending a lot more freely when they emerge from weeks of lockdown. That decline in spending by the wealthy could limit the whole country’s economic recovery.
Researchers based at Harvard have been tracking spending patterns using credit card data. They found that people at the bottom of the income ladder are now spending nearly as much as they did before the coronavirus pandemic.
“When the stimulus checks went out, you see that spending by lower-income households went up a lot,” said Nathan Hendren, a Harvard economist and co-founder of the Opportunity Insights research team.
However, the wealthy are not matching them. “For higher-income individuals, that spending is still way far off from where it was prior to COVID and it has not recovered as much,” Hendren said.
That’s potentially crippling because consumer spending is a huge driver of economic activity. In fact, so much of the country’s economy depends on shopping by the top income bracket that the wealthiest 25% of Americans account for fully two-thirds of the total decline in spending since January.
The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.
After months of living with the coronavirus pandemic, American citizens are well aware of the toll it has taken on the economy: broken supply chains, record unemployment, failing small businesses. All of these factors are serious and could mire the United States in a deep, prolonged recession. But there’s another threat to the economy, too. It lurks on the balance sheets of the big banks, and it could be cataclysmic. Imagine if, in addition to all the uncertainty surrounding the pandemic, you woke up one morning to find that the financial sector had collapsed.
You may think that such a crisis is unlikely, with memories of the 2008 crash still so fresh. But banks learned few lessons from that calamity, and new laws intended to keep them from taking on too much risk have failed to do so. As a result, we could be on the precipice of another crash, one different from 2008 less in kind than in degree. This one could be worse.
Private equity firms have US$328 billion cash to deploy for global real estate investment, according to Preqin data
Sellers are only willing to offer discounts of 5 per cent while buyers are hoping for about 20 per cent concession
The world’s biggest real estate investors are sitting on piles of cash, preparing for once-in-a-lifetime opportunities created by the pandemic.
With economies around the world sputtering, commercial real estate prices are expected to come down. How much they will fall is the key question.
Sellers are currently willing to concede discounts of around 5 per cent, while bidders are hoping for about 20 per cent off pre-pandemic prices, said Charles Hewlett, managing director at Rclco Real Estate Advisors. That estimated gap, which is likely wider in specific cases, has put a freeze on deals.
“The mantra for anything that has not got started is: delay, defer and, in many cases, renegotiate,” Hewlett said. “If I’m going to have vintage May 2020 on my books, I want to be able to demonstrate to my investors that I got an exceptionally good deal.”
Lenders probably will originate $1.5 trillion in refis, a 51% jump from 2019, Fannie Mae says
If you’re in the mortgage business, fasten your seatbelts. Refinance volume is set to spike to a 17-year high this year as mortgage rates fall to the lowest levels ever recorded, Fannie Mae said.
Even as other parts of the economy tank, lenders will originate $1.5 trillion in refis in 2020, a 51% jump from 2019, according to the forecast. That would be the highest level since 2003 when $2.5 trillion of mortgages were refinanced, according to data from the Mortgage Bankers Association.
The lowest interest rates on record will bolster refis after the Federal Reserve began buying mortgage-backed securities to stimulate bond demand and grease the wheels of the credit markets. The average U.S. rate for a 30-year fixed mortgage fell to an all-time low of 3.23% at the end of April, according to Freddie Mac.
Some startup founders hesitated to apply for the SBA’s PPP loans because they feared Main Street businesses may need them more. Now, the pot of money has run out.
In the past few weeks, Silicon Valley startups have grappled with a confusing, ethical quandary: whether to take money from the government to weather the economic downturn brought on by coronavirus.
Congress passed the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, which included $349 billion in forgivable loans for small businesses to help avoid laying off employees. The Paycheck Protection Program, as it’s called, is run through the Small Business Administration, and the loan applications are processed by banks like Bank of America or Silicon Valley Bank. The SBA will forgive the loans if the recipient uses the money to help keep all its employees on the payroll for eight weeks.
Domio, a startup that offers short-term rentals, has its headquarters in a New York City loft that features beer on tap, a game room and a wall of house slippers for visitors. The fast-growing and unprofitable company has raised $117 million in venture capital, including $100 million in August.
When the coronavirus pandemic caused Domio’s bookings to dry up last month, it laid off staff but did not ask its investors for more funding. Jay Roberts, Domio’s chief executive, said it had no immediate need to raise more money and most likely had enough cash to last until 2021.
Instead, Domio applied for a federal loan under the Paycheck Protection Program, the $349 billion plan to save jobs at small businesses during the outbreak. It received a loan on April 13. Three days later, the program’s funding ran out, even as hundreds of hard-hit restaurants, hair salons and shops around the country missed out on the relief.
Questions about whether the funds were disbursed fairly and whether some applicants deserved them have drawn scrutiny to the aid program. Several companies that got millions of dollars in loans, such as the Shake Shack and Kura Sushi restaurant chains, faced criticism and eventually gave the money back. On Friday, President Donald Trump signed legislation approving a fresh $320 billion to replenish the program, which the Small Business Administration is directing.
Now, scrutiny of the program has reached technology startups like Domio. While many of these young companies have been hurt by the pandemic, they are not ailing in the same way that traditional small businesses are. Many mom-and-pop enterprises, which tend to employ hourly workers and operate on razor-thin margins, are shutting down immediately because of economic pain or begging for donations via GoFundMe campaigns.
US neobank Chime is running a pilot in which it gives customers their $1,200 federal stimulus checks before the government begins disbursing the payments, CNBC reports.
The neobank selected 1,000 customers who received their payments instantly on Thursday through Chime’s SpotMe feature, which usually acts as an overdraft protection feature, allowing customers to go negative in their accounts without having to pay an overdraft fee.
Chime is using its own capital to front the money to customers until the government pays out the checks, and CEO Chris Britt told CNBC that he is waiting for reassurance from the government that Chime users can’t redirect stimulus payments to other bank accounts before expanding the pilot to other users. Eligible users will largely be those who direct deposit paychecks into their Chime accounts and have previously had their tax refunds deposited into their Chime accounts as well.
Stuck in the coronavirus lockdown, people have flocked to exchanges to start trading Bitcoin. But trading volumes tell a different story.
In brief:
Five exchanges reported an uptick in new users.
Kraken saw an 83% increase in users, while Paxful doubled its signup rate.
On the other hand, Bitcoin is moving away from exchanges.
Many top Bitcoin exchanges have seen an influx of new users since the coronavirus lockdown started.
Five exchanges saw a notable increase in both signups, and trading volume—with some citing a doubling, or in some cases, a tripling of their usual rate of new signups. These exchanges are: Kraken, OKex, Bitfinex, Paxful, and Luno.
There is a huge public debate whether the economic costs of actions designed to arrest the spread of COVID-19 are worth the potential health benefits achieved.
Literally trillions of dollars in lost economic output and uncounted lives hang in the balance. No rational discussion of this weighty issue is possible without first having a hard-nosed discussion of the dollar value of saving the lives of COVID-19 patients.
This post will focus on the well-established methods that health economists have devised to answer this question.
