(New York)

Allianz, the global financial firm, says that Bitcoin is worthless and that the bubble is about to burst. While the firm may be better known in its native Europe, Allianz is a major player speaking out against the cryptocurrency. “In our view, its intrinsic value must be zero … A bitcoin is a claim on nobody – in contrast to, for instance, sovereign bonds, equities or paper money – and it does not generate any income stream”, says Allianz, Europe’s largest insurer.

FINSUM: We thought the bitcoin bubble had already burst! Allianz really seems to think it will go to zero. We do not, as we believe it will slowly develop into a digital value store as the regulatory regime surrounding it gets harmonized.

(New York)

Market volatility is back in a big way. This has made investors nervous and has re-ignited interest in traditional safe havens such as bonds and gold. However, Goldman Sachs has just note put out a note saying those asset classes have evaporated as safe havens. “No safe havens -- and no assets or equity sectors -- have had a positive beta to the VIX recently, and few have had a positive beta to 10-year yields, leading to diversification desperation”, say Goldman Sachs strategists. Rates, which look to be heading higher, have been a major culprit in the decline of safe havens, as have changing strategies, such as at the Bank of Japan.

FINSUM: This is one of the main reasons the market might end up falling further than it otherwise would have. Since there is no easy place to put cash, the overall panic level may be higher in a situation of serious volatility.

(Washington)

It would be easy to dismiss the current uproar over the Stormy Daniels case against Donald Trump as another in a long series of minor scandals surrounding the White House. However, this one might be very different. The reason why is that the legal case surrounding the situation may force Trump to testify under oath, which could prove a very dicey situation. Daniels, whose real name is Stephanie Clifford, is now offering to pay back the $130,000 she received in exchange for releasing her from her obligation of silence.

FINSUM: It will be very interesting to see where this case leads, as there could be wide-ranging implications.

(Washington)

President Trump has just sent a strong message to overseas investors: that US tech is not for sale. The president rejected Broadcom’s hostile takeover of Qualcomm. Although Broadcom is based in Singapore, the prospect of China, which loomed over the deal, was enough to get the White House to block the hostile takeover. American Qualcomm is in a heated race with overseas rivals, including Huawei, to build next-generation wireless technologies, and the US is warned about its strategic interests.

FINSUM: The US is right to worry about this, and we think blocking the deal was a great move. China runs its companies like China Inc., which puts the US at a bit of a structural disadvantage (because our firms don’t share as much info). Therefore, Washington needs to be very careful.

(New York)

When you think of gold’s role in a portfolio, most would immediately say it is for hedging against inflation. However, new research shows that gold is only a good hedge for inflation over very long periods, such as decades or centuries. In normal time horizons, say one to five years, it is a very weak hedge, and equities have performed much better. Now this is not to say gold cannot be a good asset class in its own right, just that its traditional role should be rethought.

FINSUM: If gold is really a poor inflation hedge, then investors and their advisors need to think very carefully about how they conceptualize it within their portfolios.