UPDATE: The Markets, Ruja Ignatova, and the Grayscale ETF Bitcoin SEC Challenge

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By Staff Reporters

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Markets: The S&P’s drop of more than 21% was its biggest H1 plunge since 1970. Its second quarter was the worst since Q1 of 2020. And while the S&P is floundering in the bear market, the NASDAQ, which is loaded with tech stocks, has taken an even bigger licking: It’s plunged more than 30% since its peak last November. For example:

Netflix: down 71% YTD (the worst performer in the S&P)

Coinbase: down 81%

Even megacaps like Meta (-52%), Amazon (-38%), and Apple (-25%) haven’t been spared.

Ruja Ignatova promised her cryptocurrency, OneCoin, would become the next Bitcoin. The only problem: It didn’t exist. The FBI today added the Bulgarian-born Ignatova—accused of defrauding investors out of approximately $4.1 billion in a fake cryptocurrency scheme—to its most-wanted list. The 41-year-old has been on outstanding since October 2017, just days after a warrant was issued for her arrest in the U.S. In a press release, the FBI called OneCoin a “massive fraud scheme” and offered up to $100,000 for information leading to Ignatova’s arrest.

The U.S. Securities and Exchange Commission rejected a proposal from Grayscale to list a spot Bitcoin ETF on the NYSE Arca exchange, setting up a potential legal battle with the country’s biggest digital asset manager. The SEC said Grayscale’s request for an ETF listing, which it proposed as a conversion of its popular Grayscale Bitcoin Trust GBTC, didn’t meet the regulator’s standard of being “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.” Grayscale said it would challenge the SEC’s decision in court, arguing that its approval of ETF’s that hold Bitcoin futures should “logically (make it) comfortable with ETFs that hold that same asset.”

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UPDATE: The Markets, SS COLAS, EY, and Monkey-Pox?

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Markets: Stocks sagged for the second straight day, with technology chip stocks taking some of the biggest blows. A new consumer report showed that Americans are not confident in the economy, but are confident that inflation will be remain for the next year.

A Social Security official earlier this month said he expects a COLA bump of about 8%, based on the current inflationary trends. But if inflation continues at its current pace — the cost of goods and services in May accelerated to 8.6% — seniors could receive a COLA hike of 10.8% in early 2023, according to a new analysis from the non-partisan Committee for a Responsible Federal Budget. If inflation grinds to a halt over the final months of 2022, seniors would receive a COLA increase of 7.3%, the group predicted. 

Ernst and Young (EY), one of the world’s largest auditing firms, has agreed to pay a $100 million SEC fine after admitting hundreds of its accountants have cheated on their ethics exams between 2017 and 2021.

US health officials ramped up their fight against the Monkeypox outbreak, expanding the group eligible to get vaccines and deploying more doses and testing capabilities.

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UPDATE: The Markets, Gasoline, Recession and the Bear

By Staff Reporters

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For the domestic markets, the S&P 500 closed down 151 points, or 3.88%. It’s down nearly 22% since January. The Dow was down 876 points (2.79%) and the NASDAQ dropped 530 points (4.68%). And, investors were disappointed to learn that inflation is moving in the wrong direction. U.S. consumer prices surged 8.6% year-over-year in May, to a fresh 40-year high, led by higher prices for energy, food and housing.

For the first time in history, a gallon of regular gasoline now costs $5 on average nationwide, according to AAA, and experts predict gas prices could average $6 a gallon by August.

Moreover, nearly 70% of leading economists expect the US to tumble into a recession as the country grapples with inflation. In a Financial Times poll, the bulk of economists said they expect a recession to be declared in the first half of 2023. The poll comes after US inflation soared to 8.6% in May, outstripping economists’ expectations and piling the pressure on the Fed.

Finally, S&P Global says a 20% decline in the S&P 500 on a closing basis from its previous peak is all it takes to define a bear market. Which means that this bear market is already more than five months old, since the S&P 500 all-time high came on January 3rd, 2022.

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UPDATE: The Markets, Crypto and Online Retailers

By Staff Reporters

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  • Markets: After booming stocks had their worst day of the year because of raging inflation, slowing economic growth, and a potential recession.
  • Crypto: Bitcoin and other major cryptos like ethereum also tumbled in the aftermath of the FOMC announcement. They’ve typically tracked the performance of growth stocks, which have gotten hammered on the prospect of higher interest rates.

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Almost every major online retailer reporting earnings with signs of a decline:

  • Wayfair shares cratered nearly 26% yesterday after announcing that its active customer count dropped 23.4% from a year ago.
  • Bed Bath & Beyond reported an 18% nosedive in online sales.
  • Etsy and eBay shares both dropped by double digits yesterday after giving weak guidance for the current quarter.
  • At least five senior executives from Meta’s fledgling e-commerce division have fled in the last six months.
  • Shopify shares plummeted about 15% on Thursday after posting much lower-than-expected earnings.

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UPDATE: Markets and Medicine

By Staff Reporters

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The Federal Reserve announced that it will stop buying bonds about three months earlier than initially planned. The Fed now plans to trim its monthly Treasury and mortgage-backed security purchases by $30 billion a month starting next month. The new pace is expected to put an end to bond buying by March.

CITE: https://www.r2library.com/Resource/Title/0826102549

The Fed also announced that it would leave interest rates unchanged at near-zero percent. The announcement paves the way for three interest rate hikes by the end of 2022, which could weigh on tech and growth stocks.

UPDATE: https://www.msn.com/en-us/money/news/tech-takes-a-beating-as-central-banks-pull-back/vi-AARTp0n

  • Markets: Stocks reversed their post-Federal Reserve announcement rally with a stinker of a day—especially tech stocks. Semiconductor companies like AMD and Nvidia got particularly thwacked.
  • Covid: The CDC recommended adults use Moderna’s and Pfizer’s Covid vaccines over J&J’s due to the risk of developing rare but serious blood clots.

MORE: https://www.msn.com/en-us/money/markets/stocks-fall-as-investors-digest-feds-latest-move/vi-AARTm2C

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The National Health Care-Scare

The Markets and Health Economics

By Dr. David Edward Marcinko; MBA, CMP™

marcinko

As a centrist fiscal conservative – social liberal – I tend to side with libertarian issues and not political parties. Nevertheless, I was dismayed with the recent presidential election and wondered what impact it would have on the stock markets. Mr. Market replied with haste.

The Question 

In the short term, the stock market collapsed back in September when most pundits opined that President-elect Barack Obama would become our new leader. In fact, the DOW has not seen its current lows since 1998, or so.

More specifically, according to one analyst from Wall Street – Paul Shread – “the Dowshould have strong support between here and 7000, which would cover the 1998 and 2002-2003 lows (7200-7400), the 50% decline mark (7100) and the October 1997 low (6971). This would be a very important place for the market to make a stand.” But other chartists see the markets falling even further, with the S&P dropping as low as 400. Why is this?

The Answer is Uncertainty, Doubt and Fear

While the mounting credit default swap and mortgage crisis has had a major role in sinking stocks, some speculators worry that Obama will follow through on promises to raise income taxes on dividends and capital gains; eliminate the estate tax exemption, rescue the auto-industry and  the: airlines, home builders, furniture, footgear and apparels, textiles, glassware, tobacco, beer brewers and perhaps a few others, and generally make it difficult for private employers to resist unionizing drives. In other words – there is a rising level of fear, doubt and uncertainty over the seeming potential of Keynesianism and governmental guarantees and protectionism – rather than the opportunities of capitalism. All disguised in the “cloak of change”.

Enter the Politicians

Some economists – tax and policy experts – fear that if Obama, Speaker Nancy Pelosi and Senate Majority Leader Harry Reid bailout these manufacturing segments instead of filing for Chapter 11, the country may face a very long recession. Just look to Japan some two decades ago, when the country bailed out its failing banks and corporations instead of letting them fall so that innovative competitors could take their place.

According to Niall Ferguson, a scholar who has studied the relationship between political, banking and financial fortunes –”you can stick money into every orifice of the big banks — their mouth, their nose, their ears, wherever — but if they can’t make loans because they have to reserve against future losses, and if they won’t make loans because there’s a recession, it won’t do any good,” Ferguson says. “If they can’t lend, there’s no money multiplier — they’re stuck, they’re zombies. It’s Japan all over again.” And, some ghoulish traders are indeed hoping for a deep recession. Today, Japan is still in worse shape than we are.

Phoenix Rising

Following such a debacle, the failed companies might then re-organize with some of their current workers under revamped union contracts. Reorganization, new labor contracts and new employee and retiree health benefit plans would make them competitive and profitable after emerging from bankruptcy; much like the proverbial Phoenix.

National Health Insurance, et al

Our physician clients and investors also are also worried that if national health insurance becomes a reality, defense spending is reduced and/or onerous regulations imposed on the surviving banks and Wall Street, the economy will be in for ride rougher than the one we have experienced to-date. No wonder a recent poll suggested that more than half of all doctors did not encourage their offspring to follow their career footsteps.

Other pressing issues for the medical profession, according to the HealthCare Group – Co-Chaired by Angela Braly of Wellpoint Inc., Dr. Denis Cortese of the Mayo Clinic, Jeffrey Kindler from Pfizer Inc., and Dr. Daniel Vasella from Novartis AG – include tort reform,defining and measuring medical value, payment reform, and building the health care workforce of the future with an emphasis on primary care, nursing and other allied health professionals. Moreover, true healthcare reform must involve integrating issues like Single Payer Systems, Consumer Directed Health Plans, Pharmaceutical Price Competition, Advanced Electronic Medical Records, and Quality & Outcomes Disclosure, etc.

The Obama Cabinet

President-elect Obama’s staff and cabinet appointments will also offer important clues for the markets, going forward. In addition to Rahm Emanuel, as the President-elect’s Chief of Staff, hearsay suggests Laura Tyson or Bill Richardson for Secretary of Commerce, Hillary Clinton as Secretary of State and Timothy Geithner as Treasury Secretary. Other considerations include Renee Glover for Secretary of Housing and Urban Development [HUD], Max Cleland as Secretary for Veteran’s Affairs, Janet Napolitano for Homeland Security, Jim Jones as National Security Advisor; and Richard Danzig and/or Chuck Hagel for other Cabinet Posts. Yet, Tom Daschle as Secretary of HHS is not exactly an “agent of change”, as the term is commonly understood.

Assessment

As the world’s markets sink, the pressure on our new administration will be to clarify these issues. Only then, will a stock market bottom be reached, and the dismal economy begins to reverse itself. Hopefully, the health care-scare will then be mitigated.

Conclusion

Your thoughts and comments on this Medical Executive-Post are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com 

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