Bitcoin

Despite the US being largely on holiday, the demand for digital currencies continues to surge. Bitcoin has rallied another 10% overnight as Chinese appetite for alternative stores of value remains unabated (BTC China is nearing its record highs) as USD/BTC is trading at $1170 - on its way to crossing the Maginot line of gold's spot price (within a few hours at this pace). Bitcoin though has nothing on its smaller cousin Litecoin which has now run from $1.11 to over $48 in the last 5 weeks. In fact, almost every crypto-currency in the world - from Infinitecoin to AnonCoin is surging... with only the ironically named PhoenixCoin (-68% overnight) not rising from the flames of fiat torment.

• The second coming of Obamacare website - will it work? (Reuters)
• Winter Storm Moves North as Macy’s Waits to Make Parade Call (BBG)
• Eyeing holiday sales, more U.S. retailers to open on Thanksgiving (Reuters)
• It's all Verizon's fault: H-P Will Replace Verizon in Hosting HealthCare.gov Website (WSJ)
• Bitcoin Service Targets Kenya Remittances With Cut-Rate Fees (BBG)
• Embattled Thai PM easily survives no-confidence vote, protests persist (Reuters)
• For U.S. stores it is ugly out there: in more ways than one (Reuters)
• Japan and S Korea military flout China air zone rules (FT)
• UBS Restructuring Forex Unit (WSJ)
• Trader Messages Scrutinized as UBS Bans Chats Among Firms (BBG)
• ECB warns on external risks to eurozone financial system (FT)

The top holder of Bitcoins is the unlikely named 1933phfhK3ZgFQNLGSDXvqCn32k2buXY8a with 111,111 units of the crypto-currency (up from 40,000 units in the summer of 2011) for a total value over $110 million. Perhaps most interesting is these 100 Bitcoin holders represent over 20% of the entire outstanding amount of the alternative currency.

Volumes - expectedly - were extremely light and so, we all know what that means: a dash for trash meltup. NASDAQ keeps powering ahead as the S&P and Dow recover from yesterday afternoon's cliff dive. Trannies now up 13.3% off the debt-ceiling lows 5 weeks ago... sure, why not. "Most shorted" names outperformed once again but it seems investors, while not wanting to sell, are happy to bid for protection as VIX diverges. Credit markets also diverged bearishly today. Stocks disconnected (a la yesterday) from JPY carry briefly but rapidly caught up in the low volume churn. Bonds leaked higher in yield (unch on the week now); the USD pushed higher after Europe's close (back to unch on the week); but inventories and USD strength weighed on oil prices and precious metals limped modestly lower.

Well that escalated quickly. Having broken above $900 yesterday to new record highs (and a 100% gain in a week), the crypto currency is not looking back now. On what is higher than average volume this morning, Bitcoin just broke above the magic $1000 level for the first time (at $1025). Meanwhile, the BTC China "arb'd" rate is around $950 for those playing at home; and Litecoin has just topped $26 (from $4 a week ago!).

I know why someone who is so wrong can get so much media attention. My big question is why do so many "so-called" smart people actually believe him! We need a new, new media outlet, no?

Edward Snowden has recently revealed that he has a secret cache of ‘doomsday’ material that will blow the world apart and the US in particular.

A week after spiking above $900, before dropping 50% in the following 48 hours amid last week's Senate hearings, Bitcoin has recovered the losses (i.e. doubled) and is now trading at record high levels against the USD - $930on Mt.Gox. Notably, in China, Bitcoin remains well off its record highs (5200 vs 6989 highs).

It might have been the Republican shutdown (according to one person at the White House, at least). It might have been the fault of the Syrian leader Bachar Al-Assad gassing his people with chemical weapons.

• Washington turns bond market upside (FT)
• China Air-Zone Move Expands Field of Islands Spat With Japan (BBG); Japan rejects China claim on airspace over disputed islands (FT)
• 'Great Satan' meets 'Axis of Evil' and strikes a deal (Reuters)
• Iran Pact Faces Stiff Opposition (WSJ)
• Allies Fear a US Pullback in Mideast (WSJ)
• India to resume paying Iran in Euros (Economic Times)
• At 'Business Insider,' it's time to sell (USA Today)
• More ECB currency war jawboning: ECB’s Hansson Says Rate Cut Options Not Fully Exhausted (BBG)
• Spy World Links Plus Obama Ties Stoke Concern About NSA Review (BBG)
• A disunited Europe will struggle even to disintegrate (FT)

The Fed's Catch 22 just got catchier. While most attention in the recently released FOMC minutes fell on the return of the taper as a possibility even as soon as December (making the November payrolls report the most important ever, ever, until the next one at least), a less discussed issue was the Fed's comment that it would consider lowering the Interest on Excess Reserves to zero as a means to offset the implied tightening that would result from the reduction in the monthly flow once QE entered its terminal phase (for however briefly before the plunge in the S&P led to the Untaper). After all, the Fed's policy book goes, if IOER is raised to tighten conditions, easing it to zero, or negative, should offset "tightening financial conditions", right? Wrong. As the FT reports leading US banks have warned the Fed that should it lower IOER, they would be forced to start charging depositors.

"The world has consumed more than it produced for more than a decade," Jim Rogers explains to BoomBust's Erin Ade; but his comments to the leather mini-skirted anchor with regard the actions of the world's central banks bear the most attention. "The world is floating on an artificial ocean of printed money," he blasts,before embarking on a barbaric destruction of the Fed and all it stands for, "the Fed will self-destruct, before the polticians realize what is going on."

What would you do in the country that has only 4% of its population that earns more than $5 per day to eke out its existence if you wanted to sell in that country?

The following graphic was put together by the folks at Promontory Financial and is extremely telling. It looks at three ways in which a U.S. citizen might choose to go about sending a $1,000 downpayment to Europe for the purpose of renting a vacation home. They put Bitcoin side by with with a traditional bank wire as well as a credit card transaction. The results might surprise you...

And yet gold still seems to be stuck in a downtrend. This week's sell off may have been due to trading shenanigans on the COMEX and many, including the UK Financial Regulator are asking questions as to whether gold price rigging is taking place.