Juggling Dynamite

The 50% drop in Bitcoin and other cryptocurrencies over the past month has shown, yet again, that they’re not the stable store of value that proponents wish they were.  Then, overnight, we have further confirmation that they’re also not secure.

U.S. officials managed to recover most of the ransom paid to hackers that targeted Colonial Pipeline as investigators accessed the password for one of the hackers’ bitcoin wallets and seized $2.3 million.

The money was recovered by a recently launched task force in Washington created as part of the government’s response to a rise in cyberattacks.  See Bitcoin slides 8% as U.S. seizes most of Colonial Pipeline ransom.

Think only the criminals can employ brilliant programmers and hackers?  Very funny.

While we’re bursting bubbles here, might as well also deal with the cryptos are a ‘safe haven’ blather.  As shown below since 2012, crypto-daddy Bitcoin (in light blue) has traded in positive correlation with risk appetite (dark blue), not counter to it.

It’s no surprise that in a world with record financial leverage and speculative mania that bubbling asset markets would explode up and down together.  More of the latter yet to come.

Further to Wilful Blindness, first-quarter GDP data published last week shows that residential ‘investment’ reached nearly 9% of Canada’s GDP while business investment has plunged (both below since 1960).

This is not the stuff of productivity growth.  This is the stuff of heavily indebted households that need to spend less and save more (pay down debt and file for insolvency), with economic weakness for years to come, while they do.  See Postmortem:  Canada is buying too much house:

Australia is often likened to Canada in terms of a small, open, commonwealth economy that also depends heavily on commodity exports.  Government policies, subsidies, loose lending and incoming Asian funds (including illicit) have enabled a residential housing boom in both countries over the past decade.  Australian cities often show up alongside Canada’s bigger urban centres atop lists of the most expensive real estate on the planet.

Still, as shown below in first-quarter GDP figures published for both countries, Canada (pink bars) wins the malinvestment award overall.

Smarter energy solutions drastically reduce the amount of energy wasted in old tech systems.

The Ontario Energy Board just approved the construction of the Sault Smart Grid, the largest project of its kind in North America. The smart grid promises to be more efficient, respond faster to outages, save money, and reduce carbon emission. But is there a downside? Northeastern Ontario Hub journalist Nick Dunne tells us what he’s learned. Here is a direct video link.