Join me today for Episode 910 of Bitcoin And . . .
Topics for today:
- Japan is The Hammer on US Bond Market
- Saylor Buys More Bitcoin; Price Drops Immediately
- EU Withdraws Chat Control Vote
- Braiins Announces Mini Miner for $200
- Upgrade From LND 0.17.0 NOW!
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https://www.coindesk.com/business/2024/06/20/michael-saylors-microstrategy-acquires-119k-more-bitcoin-for-786m/
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[00:00:00]
Unknown:
Good morning. This is David Bennett, and this is Bitcoin and, a podcast where I try to find the edge effect between the worlds of Bitcoin, gaming, permaculture, podcasting, and education to gain a better understanding of all. Edge effect is a concept from ecology describing a greater diversity of life where the edges of 2 systems overlap. While species from either system can be found at the edge, it is important to note there are species in the overlap that exist in neither system, and that is what I seek to uncover. Uncover. So join me in discovering the variety of things being created as Bitcoin rubs up against other systems. It is 9:21 AM Pacific Daylight Time. It is the 20th day of June 2024, and this is episode.
What? 910 of Bitcoin. And, well, the Circle p is open for business. And today, as it has been all this week, is the Leathermint. You can find sovereignty in style at the leathermint.com. Get your leather belts. Get your leather, passport holders. Get a wallet. They have some really good wallets. They have wallets with chips embedded in them so that you can, you know, tap to pay. You can use them as, like, you know, keys. You can do all kinds of stuff with these this thing. And the leather, top quality leather. The stitching, top quality stitching. If you don't have top quality stitching, what you don't have is a good wallet. I'm sorry. It's just not gonna happen for you. It's It's gonna fall apart and it doesn't matter how good the leather is. If it's in a whole bunch of different pieces, it's not gonna do you any good. It's just not. So go to the leathermint.com.
That is the leathermint.com and tell them that Bitcoin and sent you, you'll get a 10% off on any purchase that you make if you use Bitcoin and all one word as a coupon code. You can find them at the Leathermint on dead bird, formerly known as Twitter. And on Nostr, which is the new hotness at Leathermint. That's at Leathermint telling Bitcoin and Accenture, you get 10% off. They send me some sats. How can we not have a win win situation going on here? Okay, ladies and gentlemen. Last night actually, it was more like early early this morning for me. I got a hold of a 0 hedge article that just you know, if you ever wondered what actually makes dead people scared and why should dead people be scared? They're dead. They don't have anything to do with this place no more.
Nope. No. They don't have nothing to do with this place no more. Yet I found something that will actually scare the dead. Now okay. Scare I don't we live in scary times. Okay? We eat scary times for breakfast. So this isn't something that's supposed to just, you know, make you go, oh, but this is something that we're gonna have to watch. Okay? This really brings home the situation economically, macroeconomically, that the United States Federal Reserve has put into play across the globe. If you thought the Federal Reserve just set monetary policy for the United States, you couldn't be more wrong.
It sets monetary policy for the world and has done for decades decades decades. That time is probably coming to an end because we've got the BRICS countries coming up. They have way more people represented in the BRICS countries than the g 7 economies. They're not exactly not making, oh, wow. There's a whole bunch of stuff going on outside. It's not like they're, you know, it's not like their GDP in comparison to the g 7 is anything to sneeze at either. This is a very serious situation. Right? We you wanna talk about a flippening? You're you're probably looking at a flippening. But I want to talk about this 0 Hedge article in-depth.
Okay? So, we're gonna read it. It's 0 Hedge. The music just stopped. Japan banking giant, Noren Chukin, to liquidate $63,000,000,000 in treasuries and European bonds to plug massive unrealized losses last October when the wounds from the March 2023 bank failures, which surpassed the global financial crisis and total assets, and which sparked the latest Fed intervention setting the market's nadir over the past 16 months, we're still fresh, we made a non consensus prediction. We said that since the Fed has once again backstopped the United States financial system, the next bank failure will be in Japan.
This prediction only got warmer 2 months later. Inexplicably, Japan's Norin Chuck In Bank, best known as Japan's CLO Whale, was quietly added to the list of counterparties for the Fed's standing repo facility, aka the Fed's foreign bank bailout slush fund. But if that was the first and still distant sign that something was very, very wrong at one of Japan's largest banks, Norinchukin is Japan's 5th largest bank with $840,000,000,000 in assets. Today, the proverbial Kerry stepped on a neutron bomb inside the Japanese coal mine because according to Nicky, Norin Chuck and Bank will sell more than 10,000,000,000,000 yen or $63,000,000,000 of its holdings of US and European government bonds during the year ending March 2025 as it aims to stem its losses from bets on low yield foreign bonds, a main cause of its deteriorating finance balance sheet and lowers the risks associated with holding foreign government bonds, end quote.
You see, what's happened in Japan is not that different from what is happening in the United States, where the FDIC keeps reminding us quarter after quarter that US banks are still sitting on over 1 half of $1,000,000,000,000, that's trillion with a t, in unrealized losses as a result of the huge jump in interest rates which has blown up the bank's long duration fixed income holdings, sending them trading far below par and forcing banks and the Fed to come up with creative ways of shoving these massive losses under the rug, pausing to describe a chart of unrealized gains and losses on investment securities.
All FDIC insured institutions are now so far underwater that it almost approaches an order of magnitude in the numbers being displayed on this chart. It's just a bar chart that goes back to 2,008. And some of the bars go, you know, go into the negative territory, the unrealized losses, and then they go back up into the unrealized gains. And then they kind of hammer around and blah blah blah and they go on and then oh shit. You get to 2,022. And not only is everything negative. Like, for instance, some of these numbers are, you know, 75,000,000,000. Some of them get up to about a 100, you know, 100,000,000,000, a 115,000,000,000.
We're talking bars that are reaching down into minus $675,000,000,000,000 or no, $1,000,000,000 Again, we're getting into the almost an order of magnitude differential between the numbers that we're describing today versus all of the numbers that have ever come before. And when we start talking about shifts in magnitude on the order of magnitudes, you can read that as exponent. Like an exponent. You know, like, 10 to the first 101st versus 10 to the second. 10 to the first is 10. 10 to the second is a 100. I mean, it's it's multiplying at these exponential rates. Never seen this before.
And that's what this chart is showing. And not only is it a huge shift in magnitude, ladies and gentlemen, it is to the downside. Continuing, While Japanese rates have barely budged, the move is already cascading into the form of huge losses for domestic banks, which have been hammered twice as hard due to their holdings of offshore debt, which until 2021 was viewed as risk free, only to blow up in everyone's face 2 years ago when the bull market since the early 19 eighties ended with a bang. Ladies and gentlemen, that is a 42 year bull market in a single security, the United States Treasury Bond.
Scary. Enter Norinchukin. According to the Nikki, the company's net loss for the year ending March 2025, which was previously forecast to top, you know, 500,000,000,000 yen, will rise to 1.5 trillion yen level with the bond sales. Quote, We plan to sell low yield foreign bonds in the amount of 10,000,000,000,000 yen or more, Norinchukin Bank CEO Kazuto Ukko told Nike, an amount just above $60,000,000,000 The bank, which previously was best known for being one of the world's most aggressive CLO investors, buys securities out of pension funds deposited by agriculture, forestry, and fishery concerns.
There's 2 things here that I'm going to pause for that we really need to dissect. Alright. First of all, the CLO. What is a CLO? Collateralized loan obligation. How do you wanna read that? Collateralized debt obligation. It's a CDO. That's all this shit is. It's just that they just don't wanna call it a CDO because of the bad press the CDOs got in the 2,008 bank failures and mortgage losses across the world, starting in the United States. Because we were packaging terrible loans together with horrible ratings into the same packages with some loans that have really good ratings.
And somehow asked Fitch and Moody's and the rest of the rating companies to give it a AAA rating so nobody would actually look into the bonds to find out what the underlying asset actually meant and they just sold them hand over fist. Right? So there there you go. There this is the CDO. The second part and we're talking about this Norin Chukin Bank. That's what this whole thing is about, this Japanese bank that's fixing to pull the plug on its holdings of US treasuries. And there's a lot of them. Alright? We'll get into the percentages here in a little bit. But the bank was buying those securities out of the pension funds that were deposited by agriculture, forestry, and fisheries concerns.
The way that I'm reading this, and of course, I may be wrong. I don't think I am, is that this bank specialized in taking the money that was deposited into people's, you know, essentially their pension funds. And these people worked in the agriculture industry, the forestry industry, and the fishery concern, which, you know, you can read that all as Japanese agriculture. And that's the money that they used to buy toxic debt off of the United States thinking that it was always going to be risk free because for 40 freaking 2 years, it was until a couple years ago.
That should scare the piss out of anybody listening to me. If if we have a problem with food now, think of Japan and the utter destruction of the pension funds that are going to probably happen to the agricultural workforce in Japan because of this crap. Let's continue. Facing a problem that is very familiar to all US banks, Ooku, the CEO of said bank, said that the bank acknowledged the need to drastically change its portfolio management to reduce unrealized losses on its bonds, which totaled roughly 2,200,000,000,000 yen at the end of March.
Oku explained Bank's intention to shift its investments saying, we will reduce sovereign interest rate risk and diversify into assets that take on corporate and individual credit risk Let's let's just let's read that again. Quote, and this is the CEO of Yeah. Right? We will reduce sovereign interest rate risk. Read that as holding foreign bonds from foreign central banks we will reduce that interest rate risk and diversify into assets that take on corporate and individual credit risk. How does corporate and individual credit risk not be toxified by interest rate risk on sovereign debt?
Think about that. Do you think corporations operate completely insulated against the risk of interest rates in United States treasuries because the United States treasury is the world's money. I'm sorry. That's the way this works. It's not really about the currency in circulation. It's about this debt instrument we know and love as the United States Treasury bond. How on earth are you going to shift from taking risk on by holding those bonds into getting into corporate risk? Do you not understand that the corporate credit risk is not only is it vehemently tied, but it has always been tied for decades to the credit risk or the interest rate risk on these foreign bonds because they hold them too. And if they don't hold them directly, they hold a lot of their assets in places that do have exposure to this toxic United States Treasury bond debt.
So that statement right there from a CEO of the 5th largest bank in Japan is utter nonsense. It's complete bullshit because even when he says individual credit risk, now we're going down into retail. He wants to take that shit on. Do you think individuals at one point or another don't have some kind of exposure to the Treasury bond interest rate risk. Everybody's hurting because of this crap. Everybody's hurting. There is no shift. This is what I'm trying to say. There is no shifting your risk profile anymore. It's over. It's done. Let's continue. Now if, as it is now affectionately known by bankruptcy lawyers, was a United States Bank circa 1 year ago, it would not have to sell anything. It could just pledge all of its sharply depreciated bonds at the Fed's BTFP facility and get par value for them. Unfortunately, Nochu, and that's the same bank, it's a it's a moniker. Nochu is this Noranchaku. Right? Nochu is not US, but in fact, it is Japanese.
And it is not 2023, ladies and gentlemen, but rather it is now 2024 when the high rate disaster of 2023 was supposed to be over. Supposed to be. But instead, it's only getting worse. Regular readers will hardly need it, but for novices, Nikki gives the following quick primer. Quote, interest rates in the United States and Europe have risen and bond prices are down this reduced the value of high priced low yielding foreign bonds that nor and chuck had purchased in the past, causing its paper losses to swell. So, faced with no other option, NOCHU is doing the only thing that it can an orderly liquidation of tens of billions of securities now when they are still liquid and carry a higher price in hopes of avoiding a disorderly liquidation and much worse in a few months when the bond market freezes up.
That if you didn't hear that, the they're they're saying the bond market is going to freeze up, and I think that they're right. At one point or another, nobody's gonna want this crap. Nobody can be cajoled into buying any more of this stuff. Nobody can be threatened anymore. The Saudis are totally getting into bed with the BRICS. They're not going to worry about United States Treasury bonds. They're they're they cannot be cajoled, threatened, or otherwise forced to buy this toxic debt. Since nobody is going to want to buy the toxic debt, that's where you get the bond market freezing up. It becomes illiquid overnight.
And, yes, the Japanese rates canary is quite quite massive. At the end of March, Norenchuckin had approximately 23 of foreign bonds, about $150,000,000,000 worth, accounting to 42% of its total 56,000,000,000,000 yen of assets under management. The foreign bonds is almost half of this bank's assets under management. Almost half. And it's toxic. We already know that. And that market is going to freeze up. They are going to liquefy. Just saying. To get some sense of the scale. According to the Bank of Japan, outstanding foreign bonds held by depository financial institutions amounted to 117,000,000,000,000 yen as of the end of March.
Norinchukin, which is a major institutional investor in Japan, holds as much as 20% of the total on its own. And those asking, yes, once Nochoo begins selling, all the others will have to join the club. Let's pause for a let's pause for the word of the day. Cascading failures. It's not really a word. It's more of a phrase, but cascading failures. I'll say it one more time. Cascading failures. And so Norinchukin plans to sell over 10,000,000,000,000 yen in foreign bonds in addition to its normal trading activities as if anything is normal anymore. Now the rest of the story is just filler.
In an attempt to divert attention from the 10,000,000,000,000 yen elephant in the room, the Nikky then wastes time discussing the bank's other alternatives. To it. The company is now consider considering investment alternatives, including equities, corporate bonds, corporate loans, and private equity, as well as securitized products such as corporate loan backed securities and you guessed it, mortgage backed securities. By diversifying its portfolio, it aims to prevent unrealized losses from expanding to the point where they become a concern for management. It will also try to replace some low yielding foreign government debt with other such bonds offering higher interest rates.
What are you talking about? What diversification? Once the selling begins, the bank will be lucky if it can get even a fraction of the proceeds that it hopes for Because all the other banks won't just be standing there twiddling their thumbs as they wait to see how massively no chew reprises the bond market. And, it's not just banks. If and when the selling begins by a bank that holds 20% of all the foreign bonds in Japan, the liquidation cascade will quickly spread to Mrs. Watatonabe. According to the United States Treasury Department, Japanese investors held $1,180,000,000,000 of United States government bonds as of March, the largest slice among foreign holders.
Let's pause. If let's just reread this. If and when the selling begins by a bank that holds 20% of all foreign bonds in Japan. You read that right or you heard it right. This one bank, this norenchaku, holds 20%. 1 a full 1 5th of all the foreign bonds in that country is held by this bank, and they're going to cut and run. Needless to say, the Nikki does so anyway, quote, massive sales by nor in chukin could have a sizable effect on the US bond market. Yeah. You think? And since. We now know what is happening. It is only a matter of time before everyone else front runs nor in chucking. What happens next will be even uglier.
Since the bank will no longer be able to mask its fixed income losses under the guise of accounting slight of hand, the bank's financial results for the period ending March 2025 will deteriorate significantly as a result of the huge divestment of foreign bonds and turn paper losses into real losses, end quote. As of May, Norinchukin put its financial loss at more than 500,000,000,000 yen, but this is now expected to reach the 1.5 trillion yen level. Just a little more context back in the immediate aftermath of the global financial crisis in the year ending March 2009 Norin Chukkan posted a final loss of about 570,000,000,000 yen due to the impairment of securitized products.
The forecast loss for this fiscal year is expected to top the previous record by roughly 1,000,000,000,000 yen Nevertheless, Oku said that putting the losses on the books in the year ending next March will quote improve the bank's finances and portfolio, thus enabling to move into the black in the period ending March 2026. Spoiler alert. No. It won't. And that's why the bank is now scrambling to share the pain with even greater fools, for example investors according to the NIKE, Noren Chuk and Bank is considering raising 1,200,000,000,000 yen to shore up its finances.
It has already started discussions with Japan Agriculture Cooperatives which is, as we know, one of its main investors and others. Of course, the question of who in their right mind would lend the bank good money to plug an even bigger hole that is about to open up is anyone's guess. But that won't stop the bank from doing what it has to do. Now that it has picked the liquidation route and once the selling flood begins it won't end as these flashing red headlines from Bloomberg just concern confirmed. Title 1, Norin Chukin to sell US European sovereign bonds gradually. Norin Chukin also weighs local overseas bonds, project finance.
And finally, Norinchukin eyes assets including CLOs, stocks after bond loss. There's a name for this. It's called a fire sale. But drumroll, a gradual one. Because that's how fire sales supposedly go in Japan. Luckily, the one thing nobody has to guess is what happens next. As the wonderful movie Margin Call laid out so very well, once you realize that the music has stopped, you have 3 choices. Be first, be smarter, or cheat. In the case of Japan's Norinchukin, it has decided the time has come to liquidate before anyone else. We wonder how everyone else will take this particular news Okay.
That's that's the thing. That's the thing. Hey. You know what? Let's listen to the 9 minutes of the movie Margin Call and listen carefully. Sometimes you're watching a movie and you you just don't get it because you're just you're you're using both senses. And sometimes if you just sit and listen instead of watching something as you're listening to it, It sinks in a little bit better. And if you listen to this and compare it to what I just read, should scare the living piss out of you. It sure does it sure does me. I I guess I really can't sugarcoat it. That what we just looked at is almost the hammer falling.
This is the hammer. It's Japan. The hammer is Japan. And it which actually makes a fair amount of sense. We've been friends with Japan forever. We've bailed them out time and time and time and time again. But what have we been bailing them out with? Toxic debt. And those chickens have come home to roost. And it seems fitting that Japan to be the first one to say we're done. Of course, they aren't the first. The Saudis, I think, are actually the first. But for some reason, they don't feel as much like a hammer as one of our closest allies.
Japan is the hammer. Let's listen to this. Welcome,
[00:27:13] Unknown:
everyone. I must apologize for dragging you all here such in uncommon hour. But from what I've been told, this matter needs to be dealt with urgently. So urgently, in fact, probably should have been addressed weeks ago, but that is spilt milk under the bridge. So why doesn't somebody tell me what they think is going on here?
[00:27:32] Unknown:
Mister Told, as I mentioned earlier,
[00:27:35] Unknown:
if you compare the figure at the top of page 13 Jared, this isn't valid for all that. Just speak to me in plain English. Okay. In fact, I'd like to speak to the guy who put this together. Mister Sullivan, is it? Does he speak English? Sir? I'd like to speak for the analyst who seems to stumble across this mess. Certainly. That would be Peter Sullivan right here. Oh, mister Sullivan. You're here. Good morning. Maybe you could tell me what you think is going on here. And please speak as you might to a young child or a golden retriever.
It wasn't brains that got me here. I can show you that.
[00:28:13] Unknown:
Well, sir, as you may or may not know, I work here for mister Rogers as an associate in the risk assessment and management office at MBS.
[00:28:25] Unknown:
Please. Just relax. Stand up. Tell us a clear voice. What is the nature of the problem?
[00:28:33] Unknown:
Okay. Well, as you probably know, over the last 36 to 40 months, the firm has begun packaging new MBS products that combine several different tranches of rating classification in 1 tradable security. This has been enormously profitable as I imagine you noticed. I have. Well, the firm is currently doing a considerable amount of this business every day. Now the problem, which is, I guess, why we are here tonight, is that it takes us, the firm, about a month to layer these products correctly, thereby posing a challenge from a risk management standpoint. I'm assuming that challenge is? Well, we have to hold these assets on our books longer than we might ideally like to. Yes.
But the key factor here is these are essentially just mortgages. So that has allowed us to push the leverage considerably beyond what you might be willing or allowed to do in any other circumstance, thereby pushing the risk profile without raising any red flags.
[00:29:40] Unknown:
Now thank you, mister Ellis. Sit down. What I'm guessing your report here says and give me some rope here. What I'm guessing it says is that considering that, shall we say, the bumpy road we've been on the last week or so, But the figures your brilliant coworkers up the line ahead of you have come up with don't make much sense anymore considering what's taking place today.
[00:30:04] Unknown:
Actually, not what's taking place today, but what's already taken place over the last 2 weeks.
[00:30:09] Unknown:
So you are saying this has already happened?
[00:30:12] Unknown:
Sort of.
[00:30:17] Unknown:
And, mister Sullivan, what does your model say that that means for us here?
[00:30:23] Unknown:
Well, that's where it becomes a projection. But,
[00:30:30] Unknown:
You're speaking with me, mister Sullivan.
[00:30:33] Unknown:
Well, sir, if those assets decrease by just 25% and remain on our books, that loss would be greater than the current market capitalization of this entire company.
[00:30:51] Unknown:
So what you're telling me is that music is about to stop, and we're gonna be left holding the biggest bag of odorous excrement ever assembled in the history of capitalism?
[00:31:15] Unknown:
Sir, I'm not sure that I would put it that way, but let me clarify using your analogy. What this model shows is the music, so to speak, just slowing. If the music were to stop as you put it, then this model wouldn't be even close to that scenario. It would be considerably worse.
[00:31:41] Unknown:
Let me tell you something, mister Sullivan. Do you care to know why I'm in this chair with you all? I mean, why I earn the big bucks.
[00:31:54] Unknown:
Yes.
[00:31:55] Unknown:
I'm here for one reason and one reason alone. I'm here to guess what the music might do a week, a month, a year from now. That's it. Nothing more. And standing here tonight, I'm afraid that I don't hear a thing.
[00:32:31] Unknown:
CNBC Futures and Commodities. I've got West Texas Intermediate Oil is up a third of a point. Back up above $80 to $81.85. Brent Norcey, likewise, up a third to $85.40 a barrel. Natural gas is down, doing what it always does against oil. 4 doll or no. 4.61 percent to the downside. All your shiny metal rocks are in the green today. Gold is up almost a full point to $2,367. Silver is up almost 4 full percentage points. Platinum is up a half. Copper is up 1 and a third. Palladium is up 2 and 2 thirds. Ag is all in the red today. The biggest loser is chocolate. 6.12% to the downside.
Biggest winner is coffee, and there's only 2 winners in my screen. 1.5% to the upside. Live cattle is unchanged. Lean hogs are down 2 a quarter percent. Feeder cattle are down a 5th of a point. The Dow is the only legacy equities index that's in the green today. It's up a quarter of a point. S and P is down a 3rd. Nasdaq is down 2 quarter no. I'm sorry. 3 quarters. And the S and P mini is down a 3rd. The mempool let's see what the mempool is doing this morning. Yay. We only have a 190 blocks carrying 260,000 unconfirmed transactions waiting to clear at transaction rates of 29 satoshis per vbyte for high priority and 19 for low priority. And anything under 4 and a half are being purged from mempools around the world. Hash rate flashing 556.2 hexahashes per second.
So, not not terrible. Now from navigating the social graph, that was Bitcoin and episode 909. It was a good old palindrome show, where I read you the piece called navigating the social graph from Papalia. I got Owen 2 boosting a 1,000. Satoshi says really interesting stuff. Thanks for sharing. Pipiella himself gave me a 1,000 sats, said, hey, David. Thank you for this episode. I appreciate the fact that you resonate with proof of work keys and endorsements. I'm using Obsidian Publish. It's really super easy and it allows me to write my stuff and publish it to my website with one click whenever it's ready. And I went and checked out and sure enough Obsidian does have a way to publish directly to the web. If you're set up with your own website and all and you've got the proper credentials and all that kind of stuff, it just it'll it goes right in and it's not even a community plugin if you're not using Obsidian for taking notes and, you know, collecting your thoughts and and trying to cobble them together into some semblance of sense and truth, you're mess you're missing out. Go go check out Obsidian dotmd. If you've ever had a hankering to write, do research, or anything of the of that nature, Obsidian dotmd is fully free, and it's one of the most powerful or note taking protocols or or, applications that I've ever seen. Pies with 420 says, thank you, sir. No. Thank you. God's death with 237 says, thank you, sir. No. Thank you. And that's gonna do it for the weather report.
Welcome to part 2 of the news that you can use. Michael Sailor is added again. His MicroStrategy company has purchased 11,900 more Bitcoin for $786,000,000. The news from CoinDesk broke at exactly 5:32 AM Pacific Daylight Time, and the 6 AM red candle came right after it. It's it's almost amazing. Start go back in your hourly candles on the Bitcoin price and start looking at every weekday at 6 AM. It won't be every single one that does it. But it like like clockwork for me when I this is the way it seems. I start my morning, I get up, I come in and I see, you know, it's like Monday and the first thing I see is a giant red candle, and it's the 6 AM Pacific Daylight Time candle. And it goes that way until the weekend, and then the whole flavor of trading changes. So but yeah.
So whoever doesn't like Michael Sailor, it was out in force today, and you can see it reflected in the Bitcoin price, which is currently $64,945.37. Alright. So let's get into this Nasdaq listed software firm, MicroStrategy, has acquired another 11,931 Bitcoin for $786,000,000 according to a Thursday morning press release. Thank you, Mike, for telling everybody so that they can crash the price one more time. Led by executive chairman, Michael Saylor, the company has, at the end of April, held 214,400 bitcoin. This latest acquisition brings the company's total holdings to 226,331 tokens worth just under 15 $1,000,000,000 at Bitcoin's current price of roughly 66,000.
The company's Bitcoins were purchased at an average price of, get this, $36,798 each or roughly 8.33000000000. So he's coming out, coming in at about 42% on the profit side if he were to sell everything today. And, of course, he wouldn't get that because he crashed the market, so he wouldn't get anywhere close to that. But on paper right now, he's made about 42, 43% profit over the past 4, yeah, 4 years. Not bad, Mike. Not not bad at all, my friend. Okay. Now the EU council has withdrawn the vote on the chat control, but but but negotiations will continue. EU member states that not or sorry.
EU member states could not reach an agreement on chat control today. The council presidency removed the vote from the agenda because it lacked a sufficient majority. Yeah. They'll just try this shit again. And if you don't know what the chat control is, it's just it's just more in the European Union in in be all European Union member states would have to have serious controls on access and surveillance of all the individual entities in the United Kingdom and all across Europe and all the European member states as to who can access or if they're accessing the Internet, they wanna know exactly what they're doing. They wanna know what websites are going to. They wanna know what their chat says. They wanna know what DM say. They wanna know everything. This is a huge this is a billboard on an interstate in the united states in the center of Dallas for Nostr is exactly what chat control is.
This is why we have Nostr. This is why we have Bitcoin. These two things are coming together and smashing into each other in a lovely dance of freedom. Let's move on. We don't need that crap anymore. Brains has launched their mini miner BMM 100. Bitcoin mining tech provider, brains, has launched it, and he they launched it, for home miners at BTC Prague 2024 which just ended. The brains mini miner is a compact, sleek and discreet device that may easily blend into your living room decor. But don't be fooled by its modest appearance. It still boasts cutting edge technology. Simply plug it in and let the sat stacking begin announced brains. The mini miner comes with Stratum V2 allowing you to enjoy increased security with end to end encryption and reduced data loads as soon as you activate it.
The display can be customized to track your own mining data, monitor the bitcoin price, or serve as the most interesting desk clock ever, the company said. Alright. So here's the specifications of this thing. Hash rate, 1 terahash per second. It consumes 40 watts out of the box or 55 if you choose to overclock it. It's got one hash board, and that hash board has 4 ASIC chips. It's active cooling, so it's got a fan. Probably gonna make a little bit of noise. Oh, no. They say the noise is only 40 dB. Hey. That's actually pretty quiet, honestly.
Air outlet temperature is normally going to be between 40 50 degrees Celsius. Let's see. What else? It's a it's a very compact size, and I don't exactly have the imperial measurement conversion on hand, but the height is 68 millimeters. The width is a mere 134. The depth is 214. And the whole thing only weighs 1.25 kilograms. Not bad. I mean, I can get the sense of size from that, but in case you're wondering, think of being able to hold it in your hand. That I mean, you know, it's probably gonna oh, you know, it's a good it's it's a good brick size, but you can definitely have this thing in your hand. Very very small, One terahash per second. And it's using Stratum v2. What did I tell you about the commodification of ASIC chips?
I was talking directly about bitaxe the other day. And now we have Brains that has launched their version of something akin to a bit x. It's not a gigantic mining machine. It's not a, you know, somebody didn't drop a container full of, you know, s nineteens or s twenty ones on your doorstep. No. No. No. No. It's not designed for that. This is how we spread out the love because at one point the centralized mining companies in Bitcoin they are a target today. But if there's a lot of people that don't understand that they are a target today, but that day is coming soon where they will, without a doubt, understand full well what it means that bitcoin mining centralization is indeed a target.
This is how we move away from that. The BitAxe, the brains mini miner 100, These things are I mean, these things are we've got to get these out in the world. And it's not like brains called me and said, hey, will you expand expound on our virtues of being a kick ass company and sell our shit for us? No. I mean, I I I just want people to, like, think about getting brains the brains thing as well as bit acts and you know support them both. The machine by the way if you're looking at what it costs $200. $199 but you know that actually means $200. Okay. Let's move on to the last thing today, lnd versions prior.
This is the lightning network, the lnd side. Alright? The versions that are prior to v 0.17.0 are vulnerable to an LND onion bomb DoS attack. So, here's the attack. It is trivial for an attacker to craft an onion packet that contains an encoded length of uint32max for the victim's forwarding instructions. If the victim's node has less than 4 gigabytes of memory available, it will o o m crash instantly upon receiving the attacker's packet, states Morehouse. He further explains that nodes or the LND nodes with more than 4 gigabytes of RAM are not safe from the attack. The attacker can send many malicious packets simultaneously If the victim possesses enough malicious packets before the garbage collector kicks in, an OOM will still occur.
And since lnd decodes onion packets in parallel, it is not difficult for an attacker to beat the garbage collector. In my experiments, I was able to consistently crash nodes with up to 128 gigabytes of ram in just a few seconds. So if you are out there, you're running a lightning node, and you're like, oh, shit. I missed the I I I was zoning out, brother. What what version? Anything prior to 0.17.0 is affected by this attack. So if you go back to your house and you find that you are running 0.16.9 you're you need to upgrade to at least 0.17.0 as fast as humanly possible.
That's gonna do it for the morning roundup, and that's gonna do it for the show. I will see you on the other side. This has been Bitcoin and and I'm your host, David Bennett. I hope you enjoyed today's episode and hope to see you again real soon. Have a great day.
Good morning. This is David Bennett, and this is Bitcoin and, a podcast where I try to find the edge effect between the worlds of Bitcoin, gaming, permaculture, podcasting, and education to gain a better understanding of all. Edge effect is a concept from ecology describing a greater diversity of life where the edges of 2 systems overlap. While species from either system can be found at the edge, it is important to note there are species in the overlap that exist in neither system, and that is what I seek to uncover. Uncover. So join me in discovering the variety of things being created as Bitcoin rubs up against other systems. It is 9:21 AM Pacific Daylight Time. It is the 20th day of June 2024, and this is episode.
What? 910 of Bitcoin. And, well, the Circle p is open for business. And today, as it has been all this week, is the Leathermint. You can find sovereignty in style at the leathermint.com. Get your leather belts. Get your leather, passport holders. Get a wallet. They have some really good wallets. They have wallets with chips embedded in them so that you can, you know, tap to pay. You can use them as, like, you know, keys. You can do all kinds of stuff with these this thing. And the leather, top quality leather. The stitching, top quality stitching. If you don't have top quality stitching, what you don't have is a good wallet. I'm sorry. It's just not gonna happen for you. It's It's gonna fall apart and it doesn't matter how good the leather is. If it's in a whole bunch of different pieces, it's not gonna do you any good. It's just not. So go to the leathermint.com.
That is the leathermint.com and tell them that Bitcoin and sent you, you'll get a 10% off on any purchase that you make if you use Bitcoin and all one word as a coupon code. You can find them at the Leathermint on dead bird, formerly known as Twitter. And on Nostr, which is the new hotness at Leathermint. That's at Leathermint telling Bitcoin and Accenture, you get 10% off. They send me some sats. How can we not have a win win situation going on here? Okay, ladies and gentlemen. Last night actually, it was more like early early this morning for me. I got a hold of a 0 hedge article that just you know, if you ever wondered what actually makes dead people scared and why should dead people be scared? They're dead. They don't have anything to do with this place no more.
Nope. No. They don't have nothing to do with this place no more. Yet I found something that will actually scare the dead. Now okay. Scare I don't we live in scary times. Okay? We eat scary times for breakfast. So this isn't something that's supposed to just, you know, make you go, oh, but this is something that we're gonna have to watch. Okay? This really brings home the situation economically, macroeconomically, that the United States Federal Reserve has put into play across the globe. If you thought the Federal Reserve just set monetary policy for the United States, you couldn't be more wrong.
It sets monetary policy for the world and has done for decades decades decades. That time is probably coming to an end because we've got the BRICS countries coming up. They have way more people represented in the BRICS countries than the g 7 economies. They're not exactly not making, oh, wow. There's a whole bunch of stuff going on outside. It's not like they're, you know, it's not like their GDP in comparison to the g 7 is anything to sneeze at either. This is a very serious situation. Right? We you wanna talk about a flippening? You're you're probably looking at a flippening. But I want to talk about this 0 Hedge article in-depth.
Okay? So, we're gonna read it. It's 0 Hedge. The music just stopped. Japan banking giant, Noren Chukin, to liquidate $63,000,000,000 in treasuries and European bonds to plug massive unrealized losses last October when the wounds from the March 2023 bank failures, which surpassed the global financial crisis and total assets, and which sparked the latest Fed intervention setting the market's nadir over the past 16 months, we're still fresh, we made a non consensus prediction. We said that since the Fed has once again backstopped the United States financial system, the next bank failure will be in Japan.
This prediction only got warmer 2 months later. Inexplicably, Japan's Norin Chuck In Bank, best known as Japan's CLO Whale, was quietly added to the list of counterparties for the Fed's standing repo facility, aka the Fed's foreign bank bailout slush fund. But if that was the first and still distant sign that something was very, very wrong at one of Japan's largest banks, Norinchukin is Japan's 5th largest bank with $840,000,000,000 in assets. Today, the proverbial Kerry stepped on a neutron bomb inside the Japanese coal mine because according to Nicky, Norin Chuck and Bank will sell more than 10,000,000,000,000 yen or $63,000,000,000 of its holdings of US and European government bonds during the year ending March 2025 as it aims to stem its losses from bets on low yield foreign bonds, a main cause of its deteriorating finance balance sheet and lowers the risks associated with holding foreign government bonds, end quote.
You see, what's happened in Japan is not that different from what is happening in the United States, where the FDIC keeps reminding us quarter after quarter that US banks are still sitting on over 1 half of $1,000,000,000,000, that's trillion with a t, in unrealized losses as a result of the huge jump in interest rates which has blown up the bank's long duration fixed income holdings, sending them trading far below par and forcing banks and the Fed to come up with creative ways of shoving these massive losses under the rug, pausing to describe a chart of unrealized gains and losses on investment securities.
All FDIC insured institutions are now so far underwater that it almost approaches an order of magnitude in the numbers being displayed on this chart. It's just a bar chart that goes back to 2,008. And some of the bars go, you know, go into the negative territory, the unrealized losses, and then they go back up into the unrealized gains. And then they kind of hammer around and blah blah blah and they go on and then oh shit. You get to 2,022. And not only is everything negative. Like, for instance, some of these numbers are, you know, 75,000,000,000. Some of them get up to about a 100, you know, 100,000,000,000, a 115,000,000,000.
We're talking bars that are reaching down into minus $675,000,000,000,000 or no, $1,000,000,000 Again, we're getting into the almost an order of magnitude differential between the numbers that we're describing today versus all of the numbers that have ever come before. And when we start talking about shifts in magnitude on the order of magnitudes, you can read that as exponent. Like an exponent. You know, like, 10 to the first 101st versus 10 to the second. 10 to the first is 10. 10 to the second is a 100. I mean, it's it's multiplying at these exponential rates. Never seen this before.
And that's what this chart is showing. And not only is it a huge shift in magnitude, ladies and gentlemen, it is to the downside. Continuing, While Japanese rates have barely budged, the move is already cascading into the form of huge losses for domestic banks, which have been hammered twice as hard due to their holdings of offshore debt, which until 2021 was viewed as risk free, only to blow up in everyone's face 2 years ago when the bull market since the early 19 eighties ended with a bang. Ladies and gentlemen, that is a 42 year bull market in a single security, the United States Treasury Bond.
Scary. Enter Norinchukin. According to the Nikki, the company's net loss for the year ending March 2025, which was previously forecast to top, you know, 500,000,000,000 yen, will rise to 1.5 trillion yen level with the bond sales. Quote, We plan to sell low yield foreign bonds in the amount of 10,000,000,000,000 yen or more, Norinchukin Bank CEO Kazuto Ukko told Nike, an amount just above $60,000,000,000 The bank, which previously was best known for being one of the world's most aggressive CLO investors, buys securities out of pension funds deposited by agriculture, forestry, and fishery concerns.
There's 2 things here that I'm going to pause for that we really need to dissect. Alright. First of all, the CLO. What is a CLO? Collateralized loan obligation. How do you wanna read that? Collateralized debt obligation. It's a CDO. That's all this shit is. It's just that they just don't wanna call it a CDO because of the bad press the CDOs got in the 2,008 bank failures and mortgage losses across the world, starting in the United States. Because we were packaging terrible loans together with horrible ratings into the same packages with some loans that have really good ratings.
And somehow asked Fitch and Moody's and the rest of the rating companies to give it a AAA rating so nobody would actually look into the bonds to find out what the underlying asset actually meant and they just sold them hand over fist. Right? So there there you go. There this is the CDO. The second part and we're talking about this Norin Chukin Bank. That's what this whole thing is about, this Japanese bank that's fixing to pull the plug on its holdings of US treasuries. And there's a lot of them. Alright? We'll get into the percentages here in a little bit. But the bank was buying those securities out of the pension funds that were deposited by agriculture, forestry, and fisheries concerns.
The way that I'm reading this, and of course, I may be wrong. I don't think I am, is that this bank specialized in taking the money that was deposited into people's, you know, essentially their pension funds. And these people worked in the agriculture industry, the forestry industry, and the fishery concern, which, you know, you can read that all as Japanese agriculture. And that's the money that they used to buy toxic debt off of the United States thinking that it was always going to be risk free because for 40 freaking 2 years, it was until a couple years ago.
That should scare the piss out of anybody listening to me. If if we have a problem with food now, think of Japan and the utter destruction of the pension funds that are going to probably happen to the agricultural workforce in Japan because of this crap. Let's continue. Facing a problem that is very familiar to all US banks, Ooku, the CEO of said bank, said that the bank acknowledged the need to drastically change its portfolio management to reduce unrealized losses on its bonds, which totaled roughly 2,200,000,000,000 yen at the end of March.
Oku explained Bank's intention to shift its investments saying, we will reduce sovereign interest rate risk and diversify into assets that take on corporate and individual credit risk Let's let's just let's read that again. Quote, and this is the CEO of Yeah. Right? We will reduce sovereign interest rate risk. Read that as holding foreign bonds from foreign central banks we will reduce that interest rate risk and diversify into assets that take on corporate and individual credit risk. How does corporate and individual credit risk not be toxified by interest rate risk on sovereign debt?
Think about that. Do you think corporations operate completely insulated against the risk of interest rates in United States treasuries because the United States treasury is the world's money. I'm sorry. That's the way this works. It's not really about the currency in circulation. It's about this debt instrument we know and love as the United States Treasury bond. How on earth are you going to shift from taking risk on by holding those bonds into getting into corporate risk? Do you not understand that the corporate credit risk is not only is it vehemently tied, but it has always been tied for decades to the credit risk or the interest rate risk on these foreign bonds because they hold them too. And if they don't hold them directly, they hold a lot of their assets in places that do have exposure to this toxic United States Treasury bond debt.
So that statement right there from a CEO of the 5th largest bank in Japan is utter nonsense. It's complete bullshit because even when he says individual credit risk, now we're going down into retail. He wants to take that shit on. Do you think individuals at one point or another don't have some kind of exposure to the Treasury bond interest rate risk. Everybody's hurting because of this crap. Everybody's hurting. There is no shift. This is what I'm trying to say. There is no shifting your risk profile anymore. It's over. It's done. Let's continue. Now if, as it is now affectionately known by bankruptcy lawyers, was a United States Bank circa 1 year ago, it would not have to sell anything. It could just pledge all of its sharply depreciated bonds at the Fed's BTFP facility and get par value for them. Unfortunately, Nochu, and that's the same bank, it's a it's a moniker. Nochu is this Noranchaku. Right? Nochu is not US, but in fact, it is Japanese.
And it is not 2023, ladies and gentlemen, but rather it is now 2024 when the high rate disaster of 2023 was supposed to be over. Supposed to be. But instead, it's only getting worse. Regular readers will hardly need it, but for novices, Nikki gives the following quick primer. Quote, interest rates in the United States and Europe have risen and bond prices are down this reduced the value of high priced low yielding foreign bonds that nor and chuck had purchased in the past, causing its paper losses to swell. So, faced with no other option, NOCHU is doing the only thing that it can an orderly liquidation of tens of billions of securities now when they are still liquid and carry a higher price in hopes of avoiding a disorderly liquidation and much worse in a few months when the bond market freezes up.
That if you didn't hear that, the they're they're saying the bond market is going to freeze up, and I think that they're right. At one point or another, nobody's gonna want this crap. Nobody can be cajoled into buying any more of this stuff. Nobody can be threatened anymore. The Saudis are totally getting into bed with the BRICS. They're not going to worry about United States Treasury bonds. They're they're they cannot be cajoled, threatened, or otherwise forced to buy this toxic debt. Since nobody is going to want to buy the toxic debt, that's where you get the bond market freezing up. It becomes illiquid overnight.
And, yes, the Japanese rates canary is quite quite massive. At the end of March, Norenchuckin had approximately 23 of foreign bonds, about $150,000,000,000 worth, accounting to 42% of its total 56,000,000,000,000 yen of assets under management. The foreign bonds is almost half of this bank's assets under management. Almost half. And it's toxic. We already know that. And that market is going to freeze up. They are going to liquefy. Just saying. To get some sense of the scale. According to the Bank of Japan, outstanding foreign bonds held by depository financial institutions amounted to 117,000,000,000,000 yen as of the end of March.
Norinchukin, which is a major institutional investor in Japan, holds as much as 20% of the total on its own. And those asking, yes, once Nochoo begins selling, all the others will have to join the club. Let's pause for a let's pause for the word of the day. Cascading failures. It's not really a word. It's more of a phrase, but cascading failures. I'll say it one more time. Cascading failures. And so Norinchukin plans to sell over 10,000,000,000,000 yen in foreign bonds in addition to its normal trading activities as if anything is normal anymore. Now the rest of the story is just filler.
In an attempt to divert attention from the 10,000,000,000,000 yen elephant in the room, the Nikky then wastes time discussing the bank's other alternatives. To it. The company is now consider considering investment alternatives, including equities, corporate bonds, corporate loans, and private equity, as well as securitized products such as corporate loan backed securities and you guessed it, mortgage backed securities. By diversifying its portfolio, it aims to prevent unrealized losses from expanding to the point where they become a concern for management. It will also try to replace some low yielding foreign government debt with other such bonds offering higher interest rates.
What are you talking about? What diversification? Once the selling begins, the bank will be lucky if it can get even a fraction of the proceeds that it hopes for Because all the other banks won't just be standing there twiddling their thumbs as they wait to see how massively no chew reprises the bond market. And, it's not just banks. If and when the selling begins by a bank that holds 20% of all the foreign bonds in Japan, the liquidation cascade will quickly spread to Mrs. Watatonabe. According to the United States Treasury Department, Japanese investors held $1,180,000,000,000 of United States government bonds as of March, the largest slice among foreign holders.
Let's pause. If let's just reread this. If and when the selling begins by a bank that holds 20% of all foreign bonds in Japan. You read that right or you heard it right. This one bank, this norenchaku, holds 20%. 1 a full 1 5th of all the foreign bonds in that country is held by this bank, and they're going to cut and run. Needless to say, the Nikki does so anyway, quote, massive sales by nor in chukin could have a sizable effect on the US bond market. Yeah. You think? And since. We now know what is happening. It is only a matter of time before everyone else front runs nor in chucking. What happens next will be even uglier.
Since the bank will no longer be able to mask its fixed income losses under the guise of accounting slight of hand, the bank's financial results for the period ending March 2025 will deteriorate significantly as a result of the huge divestment of foreign bonds and turn paper losses into real losses, end quote. As of May, Norinchukin put its financial loss at more than 500,000,000,000 yen, but this is now expected to reach the 1.5 trillion yen level. Just a little more context back in the immediate aftermath of the global financial crisis in the year ending March 2009 Norin Chukkan posted a final loss of about 570,000,000,000 yen due to the impairment of securitized products.
The forecast loss for this fiscal year is expected to top the previous record by roughly 1,000,000,000,000 yen Nevertheless, Oku said that putting the losses on the books in the year ending next March will quote improve the bank's finances and portfolio, thus enabling to move into the black in the period ending March 2026. Spoiler alert. No. It won't. And that's why the bank is now scrambling to share the pain with even greater fools, for example investors according to the NIKE, Noren Chuk and Bank is considering raising 1,200,000,000,000 yen to shore up its finances.
It has already started discussions with Japan Agriculture Cooperatives which is, as we know, one of its main investors and others. Of course, the question of who in their right mind would lend the bank good money to plug an even bigger hole that is about to open up is anyone's guess. But that won't stop the bank from doing what it has to do. Now that it has picked the liquidation route and once the selling flood begins it won't end as these flashing red headlines from Bloomberg just concern confirmed. Title 1, Norin Chukin to sell US European sovereign bonds gradually. Norin Chukin also weighs local overseas bonds, project finance.
And finally, Norinchukin eyes assets including CLOs, stocks after bond loss. There's a name for this. It's called a fire sale. But drumroll, a gradual one. Because that's how fire sales supposedly go in Japan. Luckily, the one thing nobody has to guess is what happens next. As the wonderful movie Margin Call laid out so very well, once you realize that the music has stopped, you have 3 choices. Be first, be smarter, or cheat. In the case of Japan's Norinchukin, it has decided the time has come to liquidate before anyone else. We wonder how everyone else will take this particular news Okay.
That's that's the thing. That's the thing. Hey. You know what? Let's listen to the 9 minutes of the movie Margin Call and listen carefully. Sometimes you're watching a movie and you you just don't get it because you're just you're you're using both senses. And sometimes if you just sit and listen instead of watching something as you're listening to it, It sinks in a little bit better. And if you listen to this and compare it to what I just read, should scare the living piss out of you. It sure does it sure does me. I I guess I really can't sugarcoat it. That what we just looked at is almost the hammer falling.
This is the hammer. It's Japan. The hammer is Japan. And it which actually makes a fair amount of sense. We've been friends with Japan forever. We've bailed them out time and time and time and time again. But what have we been bailing them out with? Toxic debt. And those chickens have come home to roost. And it seems fitting that Japan to be the first one to say we're done. Of course, they aren't the first. The Saudis, I think, are actually the first. But for some reason, they don't feel as much like a hammer as one of our closest allies.
Japan is the hammer. Let's listen to this. Welcome,
[00:27:13] Unknown:
everyone. I must apologize for dragging you all here such in uncommon hour. But from what I've been told, this matter needs to be dealt with urgently. So urgently, in fact, probably should have been addressed weeks ago, but that is spilt milk under the bridge. So why doesn't somebody tell me what they think is going on here?
[00:27:32] Unknown:
Mister Told, as I mentioned earlier,
[00:27:35] Unknown:
if you compare the figure at the top of page 13 Jared, this isn't valid for all that. Just speak to me in plain English. Okay. In fact, I'd like to speak to the guy who put this together. Mister Sullivan, is it? Does he speak English? Sir? I'd like to speak for the analyst who seems to stumble across this mess. Certainly. That would be Peter Sullivan right here. Oh, mister Sullivan. You're here. Good morning. Maybe you could tell me what you think is going on here. And please speak as you might to a young child or a golden retriever.
It wasn't brains that got me here. I can show you that.
[00:28:13] Unknown:
Well, sir, as you may or may not know, I work here for mister Rogers as an associate in the risk assessment and management office at MBS.
[00:28:25] Unknown:
Please. Just relax. Stand up. Tell us a clear voice. What is the nature of the problem?
[00:28:33] Unknown:
Okay. Well, as you probably know, over the last 36 to 40 months, the firm has begun packaging new MBS products that combine several different tranches of rating classification in 1 tradable security. This has been enormously profitable as I imagine you noticed. I have. Well, the firm is currently doing a considerable amount of this business every day. Now the problem, which is, I guess, why we are here tonight, is that it takes us, the firm, about a month to layer these products correctly, thereby posing a challenge from a risk management standpoint. I'm assuming that challenge is? Well, we have to hold these assets on our books longer than we might ideally like to. Yes.
But the key factor here is these are essentially just mortgages. So that has allowed us to push the leverage considerably beyond what you might be willing or allowed to do in any other circumstance, thereby pushing the risk profile without raising any red flags.
[00:29:40] Unknown:
Now thank you, mister Ellis. Sit down. What I'm guessing your report here says and give me some rope here. What I'm guessing it says is that considering that, shall we say, the bumpy road we've been on the last week or so, But the figures your brilliant coworkers up the line ahead of you have come up with don't make much sense anymore considering what's taking place today.
[00:30:04] Unknown:
Actually, not what's taking place today, but what's already taken place over the last 2 weeks.
[00:30:09] Unknown:
So you are saying this has already happened?
[00:30:12] Unknown:
Sort of.
[00:30:17] Unknown:
And, mister Sullivan, what does your model say that that means for us here?
[00:30:23] Unknown:
Well, that's where it becomes a projection. But,
[00:30:30] Unknown:
You're speaking with me, mister Sullivan.
[00:30:33] Unknown:
Well, sir, if those assets decrease by just 25% and remain on our books, that loss would be greater than the current market capitalization of this entire company.
[00:30:51] Unknown:
So what you're telling me is that music is about to stop, and we're gonna be left holding the biggest bag of odorous excrement ever assembled in the history of capitalism?
[00:31:15] Unknown:
Sir, I'm not sure that I would put it that way, but let me clarify using your analogy. What this model shows is the music, so to speak, just slowing. If the music were to stop as you put it, then this model wouldn't be even close to that scenario. It would be considerably worse.
[00:31:41] Unknown:
Let me tell you something, mister Sullivan. Do you care to know why I'm in this chair with you all? I mean, why I earn the big bucks.
[00:31:54] Unknown:
Yes.
[00:31:55] Unknown:
I'm here for one reason and one reason alone. I'm here to guess what the music might do a week, a month, a year from now. That's it. Nothing more. And standing here tonight, I'm afraid that I don't hear a thing.
[00:32:31] Unknown:
CNBC Futures and Commodities. I've got West Texas Intermediate Oil is up a third of a point. Back up above $80 to $81.85. Brent Norcey, likewise, up a third to $85.40 a barrel. Natural gas is down, doing what it always does against oil. 4 doll or no. 4.61 percent to the downside. All your shiny metal rocks are in the green today. Gold is up almost a full point to $2,367. Silver is up almost 4 full percentage points. Platinum is up a half. Copper is up 1 and a third. Palladium is up 2 and 2 thirds. Ag is all in the red today. The biggest loser is chocolate. 6.12% to the downside.
Biggest winner is coffee, and there's only 2 winners in my screen. 1.5% to the upside. Live cattle is unchanged. Lean hogs are down 2 a quarter percent. Feeder cattle are down a 5th of a point. The Dow is the only legacy equities index that's in the green today. It's up a quarter of a point. S and P is down a 3rd. Nasdaq is down 2 quarter no. I'm sorry. 3 quarters. And the S and P mini is down a 3rd. The mempool let's see what the mempool is doing this morning. Yay. We only have a 190 blocks carrying 260,000 unconfirmed transactions waiting to clear at transaction rates of 29 satoshis per vbyte for high priority and 19 for low priority. And anything under 4 and a half are being purged from mempools around the world. Hash rate flashing 556.2 hexahashes per second.
So, not not terrible. Now from navigating the social graph, that was Bitcoin and episode 909. It was a good old palindrome show, where I read you the piece called navigating the social graph from Papalia. I got Owen 2 boosting a 1,000. Satoshi says really interesting stuff. Thanks for sharing. Pipiella himself gave me a 1,000 sats, said, hey, David. Thank you for this episode. I appreciate the fact that you resonate with proof of work keys and endorsements. I'm using Obsidian Publish. It's really super easy and it allows me to write my stuff and publish it to my website with one click whenever it's ready. And I went and checked out and sure enough Obsidian does have a way to publish directly to the web. If you're set up with your own website and all and you've got the proper credentials and all that kind of stuff, it just it'll it goes right in and it's not even a community plugin if you're not using Obsidian for taking notes and, you know, collecting your thoughts and and trying to cobble them together into some semblance of sense and truth, you're mess you're missing out. Go go check out Obsidian dotmd. If you've ever had a hankering to write, do research, or anything of the of that nature, Obsidian dotmd is fully free, and it's one of the most powerful or note taking protocols or or, applications that I've ever seen. Pies with 420 says, thank you, sir. No. Thank you. God's death with 237 says, thank you, sir. No. Thank you. And that's gonna do it for the weather report.
Welcome to part 2 of the news that you can use. Michael Sailor is added again. His MicroStrategy company has purchased 11,900 more Bitcoin for $786,000,000. The news from CoinDesk broke at exactly 5:32 AM Pacific Daylight Time, and the 6 AM red candle came right after it. It's it's almost amazing. Start go back in your hourly candles on the Bitcoin price and start looking at every weekday at 6 AM. It won't be every single one that does it. But it like like clockwork for me when I this is the way it seems. I start my morning, I get up, I come in and I see, you know, it's like Monday and the first thing I see is a giant red candle, and it's the 6 AM Pacific Daylight Time candle. And it goes that way until the weekend, and then the whole flavor of trading changes. So but yeah.
So whoever doesn't like Michael Sailor, it was out in force today, and you can see it reflected in the Bitcoin price, which is currently $64,945.37. Alright. So let's get into this Nasdaq listed software firm, MicroStrategy, has acquired another 11,931 Bitcoin for $786,000,000 according to a Thursday morning press release. Thank you, Mike, for telling everybody so that they can crash the price one more time. Led by executive chairman, Michael Saylor, the company has, at the end of April, held 214,400 bitcoin. This latest acquisition brings the company's total holdings to 226,331 tokens worth just under 15 $1,000,000,000 at Bitcoin's current price of roughly 66,000.
The company's Bitcoins were purchased at an average price of, get this, $36,798 each or roughly 8.33000000000. So he's coming out, coming in at about 42% on the profit side if he were to sell everything today. And, of course, he wouldn't get that because he crashed the market, so he wouldn't get anywhere close to that. But on paper right now, he's made about 42, 43% profit over the past 4, yeah, 4 years. Not bad, Mike. Not not bad at all, my friend. Okay. Now the EU council has withdrawn the vote on the chat control, but but but negotiations will continue. EU member states that not or sorry.
EU member states could not reach an agreement on chat control today. The council presidency removed the vote from the agenda because it lacked a sufficient majority. Yeah. They'll just try this shit again. And if you don't know what the chat control is, it's just it's just more in the European Union in in be all European Union member states would have to have serious controls on access and surveillance of all the individual entities in the United Kingdom and all across Europe and all the European member states as to who can access or if they're accessing the Internet, they wanna know exactly what they're doing. They wanna know what websites are going to. They wanna know what their chat says. They wanna know what DM say. They wanna know everything. This is a huge this is a billboard on an interstate in the united states in the center of Dallas for Nostr is exactly what chat control is.
This is why we have Nostr. This is why we have Bitcoin. These two things are coming together and smashing into each other in a lovely dance of freedom. Let's move on. We don't need that crap anymore. Brains has launched their mini miner BMM 100. Bitcoin mining tech provider, brains, has launched it, and he they launched it, for home miners at BTC Prague 2024 which just ended. The brains mini miner is a compact, sleek and discreet device that may easily blend into your living room decor. But don't be fooled by its modest appearance. It still boasts cutting edge technology. Simply plug it in and let the sat stacking begin announced brains. The mini miner comes with Stratum V2 allowing you to enjoy increased security with end to end encryption and reduced data loads as soon as you activate it.
The display can be customized to track your own mining data, monitor the bitcoin price, or serve as the most interesting desk clock ever, the company said. Alright. So here's the specifications of this thing. Hash rate, 1 terahash per second. It consumes 40 watts out of the box or 55 if you choose to overclock it. It's got one hash board, and that hash board has 4 ASIC chips. It's active cooling, so it's got a fan. Probably gonna make a little bit of noise. Oh, no. They say the noise is only 40 dB. Hey. That's actually pretty quiet, honestly.
Air outlet temperature is normally going to be between 40 50 degrees Celsius. Let's see. What else? It's a it's a very compact size, and I don't exactly have the imperial measurement conversion on hand, but the height is 68 millimeters. The width is a mere 134. The depth is 214. And the whole thing only weighs 1.25 kilograms. Not bad. I mean, I can get the sense of size from that, but in case you're wondering, think of being able to hold it in your hand. That I mean, you know, it's probably gonna oh, you know, it's a good it's it's a good brick size, but you can definitely have this thing in your hand. Very very small, One terahash per second. And it's using Stratum v2. What did I tell you about the commodification of ASIC chips?
I was talking directly about bitaxe the other day. And now we have Brains that has launched their version of something akin to a bit x. It's not a gigantic mining machine. It's not a, you know, somebody didn't drop a container full of, you know, s nineteens or s twenty ones on your doorstep. No. No. No. No. It's not designed for that. This is how we spread out the love because at one point the centralized mining companies in Bitcoin they are a target today. But if there's a lot of people that don't understand that they are a target today, but that day is coming soon where they will, without a doubt, understand full well what it means that bitcoin mining centralization is indeed a target.
This is how we move away from that. The BitAxe, the brains mini miner 100, These things are I mean, these things are we've got to get these out in the world. And it's not like brains called me and said, hey, will you expand expound on our virtues of being a kick ass company and sell our shit for us? No. I mean, I I I just want people to, like, think about getting brains the brains thing as well as bit acts and you know support them both. The machine by the way if you're looking at what it costs $200. $199 but you know that actually means $200. Okay. Let's move on to the last thing today, lnd versions prior.
This is the lightning network, the lnd side. Alright? The versions that are prior to v 0.17.0 are vulnerable to an LND onion bomb DoS attack. So, here's the attack. It is trivial for an attacker to craft an onion packet that contains an encoded length of uint32max for the victim's forwarding instructions. If the victim's node has less than 4 gigabytes of memory available, it will o o m crash instantly upon receiving the attacker's packet, states Morehouse. He further explains that nodes or the LND nodes with more than 4 gigabytes of RAM are not safe from the attack. The attacker can send many malicious packets simultaneously If the victim possesses enough malicious packets before the garbage collector kicks in, an OOM will still occur.
And since lnd decodes onion packets in parallel, it is not difficult for an attacker to beat the garbage collector. In my experiments, I was able to consistently crash nodes with up to 128 gigabytes of ram in just a few seconds. So if you are out there, you're running a lightning node, and you're like, oh, shit. I missed the I I I was zoning out, brother. What what version? Anything prior to 0.17.0 is affected by this attack. So if you go back to your house and you find that you are running 0.16.9 you're you need to upgrade to at least 0.17.0 as fast as humanly possible.
That's gonna do it for the morning roundup, and that's gonna do it for the show. I will see you on the other side. This has been Bitcoin and and I'm your host, David Bennett. I hope you enjoyed today's episode and hope to see you again real soon. Have a great day.
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