• President Donald Trump is reportedly considering Allianz chief economic advisor and ex-Pimco CEO Mohamed El-Erian for Fed board governor.
• The news has been reported by Dow Jones/WSJ and CNBC, each citing a single anonymous source.
• El-Erian has plenty of financial sector experience and monetary policy knowledge but could be criticized for being a creature of Wall Street.

President Donald Trump's economic team is reportedly considering Allianz economist and former CEO of bond fund giant Pimco Mohamed El-Erian for one of four open seats on the Federal Reserve's powerful Washington-based board of governors.

The news was first reported by Dow Jones Newswires, which is part of The Wall Street Journal. They cited a source familiar with the matter. CNBC has also reported El-Erian as a possibility, also citing an anonymous source. 

While El-Erian would bring plenty of financial sector experience and monetary policy knowledge to the Fed, he would likely face criticism about the revolving door between financial sector executives and the central bank.

Trump announced earlier this month he was not reappointing Janet Yellen to a second term as Fed chair, but would instead replace her with central bank governor Jerome Powell. Powell himself hails from the financial sector, having spent much of his career at the private equity firm Carlyle Group.

The Fed board's governors are not only in charge of setting interest rates as permanent members of the Federal Open Market Committee, but also play a major role in financial regulation, particularly the oversight of large Wall Street banks.

SEE ALSO: Trump is getting a historic chance to reshape the world's most powerful central bank

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• Reality Shares and Nasdaq announced the launch of an index to track companies in the booming blockchain industry. 
• Blockchain, the technology underlying cryptocurrencies such as bitcoin and ethereum, has become a popular buzzword on Wall Street as the prices of digital coins and tokens continue to climb. 
• The Reality Shares Nasdaq Blockchain Economy Index includes a wide-range of companies across sectors. 
  

Exchange operator Nasdaq and Reality Shares, an investment marketplace, unveiled a new index on Monday designed to capture the growth of blockchain technology.

The smart-beta index called the Reality Shares Nasdaq Blockchain Economy Index, is planned to provide the basis for an exchange-traded fund by Reality Shares, according to a press release about the new index. The ETF has already been filed with the Securities and Exchange Commission by Reality Shares.  

Blockchain is best known for being the technology underlying cryptocurrencies like bitcoin, but it could have applications outside of cryptocurrencies.

Jonathan Johnson, the head of Medici Ventures, a VC subsidiary of Overstock, a company in the index, told Business Insider blockchain could potentially have the same kind of impact as the internet. 

"We see blockchain doing for the transfer of value what the internet did for the transfer of info and we want to be at the front of that wave of innovation and change," Johnson said. 

As a decentralized ledger, blockchain can facilitate exchanges of assets without the need of a middle-man. As such, it has gripped the attention of Wall Street with companies such as Goldman Sachs, JPMorgan, and Morgan Stanley all participating in at least one blockchain consortium. 

But the new index includes a wide-range of companies, according to Reality Shares. Following are five companies featured on the index's site. 

HIVE Blockchain Technologies

Ticker: HIVE

Market cap: $320 million

Year-to-date stock performance: 3,204%

Index description: 

"HIVE Blockchain Technologies is building a bridge from the blockchain sector to traditional capital markets. The company has strategically partnered with Genesis Mining Ltd., the world’s leading cryptocurrency mining hashrate provider, to build the next generation of blockchain infrastructure."

Accenture

Ticker: ACN

Market cap: $111.8 billion

Year-to-date stock performance: 24.8%

Index description: 

"Accenture is working closely with leaders from across a broad range of industries, governments, consortia, the academic community, and its key technology alliances to move blockchain technology forward so that, ultimately, it can help improve the way the world lives and works."

Hitachi

Ticker: HIT

Market cap: $38 billion

Year-to-date stock performance: 33.5%

Index description: 

"Sap sees blockchain as a promising way to simplify complex multi-party processes and create trust among participants. The company is using its expertise in 25 industries and across all lines of business to actively explore blockchain technology and to help clients capitalize on its potential."

• Tiger Global Management has increased its holdings of tech giants including Netflix, Amazon, Alphabet and more. 
• The positions are from a public document known as a 13F, which funds must file every quarter. 

Billionaire Chase Coleman's Tiger Global Management has increased its bets on some of Wall Street’s hottest tech stocks, according to documents filed Tuesday.

Among the fund’s $134.6 billion worth of holdings disclosed for third quarter of 2017 was a 711% increase in shares of Netflix — which now makes up $553.8 million of the fund’s portfolio.

According to the 13F, Tiger also made the following tech sector moves during last quarter, according to analysis by Bloomberg:

• Increased its Amazon holdings by 24% to 1.54 million shares, worth $1.48 billion
• Increased its Facebook holdings by 240% to 1.81 million shares, worth $308.8 million
• Increased its Alibaba holdings by 4.4% to 4.54 million shares, worth $783.5 million
• Sold off all its shares of Alphabet A and C shares, worth a combined $66.4 million.

The quarterly filing, called a 13F, lists the long stock positions of investment firms. The positions are current as of 45 days prior, so it is possible that Tiger Global has since changed its positions. 

Tiger Global Management invests in private and public markets and manages about $20 billion firmwide. The firm managed $5.9 billion in hedge fund assets as of mid-year 2016, according to the Hedge Fund Intelligence Billion Dollar Club ranking. 

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Warren Buffett's Berkshire Hathaway raised its stake in Apple by 3% to 134 million shares in the third quarter, a regulatory filing released Tuesday showed. 

The conglomerate owned about 2.6%, or about 134 million shares of Apple as of September 30, the 13F filing for the quarter ended September 30 showed. 

Buffett said in August that he had never sold Apple shares, and did not pay attention the calendar when deciding to buy. Berkshire Hathaway first invested in Apple in 2016 — buying 10 million shares.

Berkshire also raised its stake in the agricultural-biotech company Monsanto by 10%, and also increased its holding of Synchrony Financial. The firm slashed its stake in IBM. 

Major investment firms including hedge funds are required to disclose their long positions in stocks every quarter. Because of a time lag, these positions may have changed or been closed by the time the filings are made.

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Stocks slipped as weakness in commodities led shares of raw-material producers lower.

The S&P 500 loss 0.2%, while the Dow Jones Industrial Average slid 0.1% and the more tech-heavy Nasdaq Composite index declined 0.3%.

First up, the scoreboard:

• Dow: 23,412.42, -27.28, (-0.12%)
• S&P 500: 2,579.03, -5.77, (-0.22%)
• Nasdaq: 6,737.59, -20.00, (-0.29%)
• US 10-year yield: 2.38%, -0.02
• WTI crude oil: $55.61, -1.15, -2.03%

1. 'Irrational exuberance' could spell disaster for markets. Bank of America Merrill Lynch is sounding the alarm on what they perceive to be investor overconfidence, as valuations sit near record highs and cash levels dwindle.

2. Deutsche Bank says something 'very unusual' is happening in markets. They're referring to the near-record streak of trading days without a 3-5% pullback for the S&P 500.

3. General Electric got hit for a 2nd straight day after announcing its turnaround plan. The company revealed a restructuring plan on Monday that it hopes will breathe life into their stock, which is down more than 30% this year.

4. Roku has tripled since going public — and traders betting against the stock are getting crushed. Short sellers have lost more than $100 million since the company's IPO in late September.

5. Two of Snap's biggest investors just loaded up on more shares. Fidelity Investments and technology-focused hedge fund Coatue Management boosted their stakes in the social media company.

ADDITIONALLY:

Tech stocks once again look unstoppable

Senate Republicans will try to repeal a core piece of Obamacare in their massive tax bill

The retail apocalypse is killing jobs, and it's left 'the economy vulnerable to an adverse shock'

A Chicago trading firm is setting up shop in Singapore to dominate the bitcoin market in Asia

Sessions declines to say if the White House asked the US Department of Justice to look into the AT&T-Time Warner merger

Gary Cohn had an awkward moment when CEOs appeared to shoot down one of the biggest arguments for the GOP tax plan

GoPro is falling after rolling out its 360 camera without its best features

CREDIT SUISSE: A takeover won't save Buffalo Wild Wings

SEE ALSO: 'Irrational exuberance' could spell disaster for markets

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NOW WATCH: $6 TRILLION INVESTMENT CHIEF: The next recession is years away

• A White House adviser told Axios that Elon Musk did not get a "verbal" green light to begin an ambitious mass-transit tunneling project between New York and Washington DC.
• Musk said on Twitter in July that he got "verbal government approval" for the project that would develop a Hyperloop route between the two major East Coast hubs.
• Such an undertaking would require cooperation from multiple local and regional entities, including the official backing of the federal government. A number of local government officials who Business Insider spoke to in July said they had no knowledge of it.
• Musk has been in talks with state and federal officials who say they are excited about the prospect of a next-generation mass-transit system.

This may not surprise you. The "verbal government approval" Boring Company CEO Elon Musk said he received to begin an ambitious tunnel project between New York and Washington DC was probably a misunderstanding.

Musk made that announcement on Twitter in July, suggesting he got the nod for the tunneling project that would eventually produce a Hyperloop connection between the two major East Coast hubs. A White House adviser reportedly said the "approval" wasn't exactly a green light, according to an Axios report published Monday.

"I think what you heard was verbal government excitement," Reed Cordish told attendees at an Internet Association event on Monday in San Francisco.

The Boring Company declined to comment, but conversations between Musk and government officials about the New York-to-Washington-DC project may have just been a semantic misfire. An official green light for the major infrastructure work required to build a mass-transit system would need to work its way through the federal bureaucracy and would require cooperation from multiple local and regional entities.

Musk has been in talks with state and federal officials who say they are excited about the prospect of a next-generation mass-transit system.

A proposed Hyperloop running between the nation's capital and New York would no doubt be a boon for commuters, potentially shuttling people between New York and Washington DC in 29 minutes, Musk said. It would make stops in Philadelphia and Baltimore.

Musk, who is also the chief executive of Tesla and SpaceX, launched the Boring Company in April this year. It's already well underway on other tunneling projects in California. Last month, he revealed a two-mile stretch of fresh tunnel underneath Los Angeles.

SEE ALSO: We may have just witnessed the end of the Airbus A380 superjumbo

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• The retail apocalypse has led to a flurry of retail store closures and bankruptcies. 
• Retail trade employment has dropped by 65,000 in the last 12 months, and stores which compete with online retailers are experiencing sizeable declines in employment. 
• That's impacting some corners of the subprime loan market, and could leave the economy vulnerable. 

The retail apocalypse is real. Hundreds of stores across the US have closed, as the rise of ecommerce and a surplus of mall space have combined to bring multiple retailers to their knees.

And in a big research report out November 13, UBS economist Seth Carpenter and his team undertook a deep dive on the impact of these retail struggles on the broader economy. The takeaway: retail job losses are accelerating, consumer delinquencies are spiking in certain corners of the market, and while this doesn't likely pose a risk to the financial system, it could "leave the economy vulnerable to an adverse shock."

Job losses are accelerating

"In the 12- months ending in October, the US economy added roughly 162k jobs per month, a pace almost 40k below the average pace for most of the expansion," UBS notes. "Almost all of this slowing in employment growth over the past year is from retail employment."

For example, retail trade employment added 25,000 jobs per month on average for much of the expansion, but by early 2017, the category reversed and has shed 65,000 jobs in the past 12 months. And the rise of ecommerce is at least partly to blame, according to UBS. 

"The stores suffering the most direct competition from online sales — electronics stores, sporting goods stores, clothing retailers, and department stores — are all experiencing sizable declines in employment with those declines accelerating over the last year," UBS said. 

Consumer delinquencies are spiking

Meanwhile, consumer delinquencies are picking up. According to new research from the New York Federal Reserve, the delinquency rate for subprime loans originated by auto finance companies is spiking, for example. And there has been a spike in mobile home delinquencies too, according to UBS. 

"We look to consumer delinquencies only because we believe they provide a window into the health of the consumer sector and as evidence that the frictions of labor market reallocation are real," UBS said. "That the delinquent groups align well with the income brackets for retail workers indicates to us that the decline in retail is not a positive outcome for these workers."

To be sure, this uptick in consumer delinquencies likely doesn't pose a risk to the financial system as a whole. But UBS says the "worsening repayment behavior by households is strong evidence that the economic security for a subset of US consumers has deteriorated."

"Vulnerable to an adverse shock"

The question then is: how big of a risk is this for the broader economy? 

UBS notes that disruption happens. Manufacturing, for example, shed 5 million jobs between 2000 and 2015, but many of those individuals found work in other sectors, including retail. UBS expects the economy to withstand the disruption brought about by the rise of ecommerce and the struggles of traditional brick-and-mortar. And in the long run, a shift from stores to lower cost, labor-light online sales could be positive for the economy.  

"That said, transitions are hard and rapid transitions can lead to temporary economic dislocations," UBS said.

SEE ALSO: These haunting photos of the retail apocalypse reveal a new normal in America

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• DRW, the Chicago-based trading firm, is expanding its bitcoin trading operations into Asia. 
• The firm told Business Insider it sees a huge opportunity in Asia for over-the-counter trading. 
• The Asian-outpost will be based in Singapore, but will serve all of Asia and enable the firm to operate as global, around-the-clock, business. 

DRW, a Chicago-based firm, is looking to set up a bitcoin trading desk in Singapore to dominate the cryptocurrency market in Asia. 

The firm has been in the bitcoin game since 2014 via its division Cumberland Mining, which already operates over-the-counter bitcoin trading desks in Chicago and London. 

Bobby Cho, the head of over-the-counter trading for Cumberland, told Business Insider the firm is preparing to start up operations in Singapore well-before year-end. 

"Asia is a big opportunity for us," Cho said. "We dominate the market in the US and we are trying to bring that liquidity to Asia where there is tons of activity."

DRW already regularly facilitates bitcoin trades in the $1 to $5 million range with trades in the $20 to $50 range being viewed as the "gold standard" ceiling. 

"We are long bitcoin with our average transaction well north of $100,000," Cho said. 

In China, where retail exchanges have shut down en masse because of a crackdown by the government, the OTC business has exploded. OTC trading firms like Cumberland connect buyers and sellers off retail exchanges. 

A study conducted by China's National Committee of Experts on Internet Financial Security found OTC trading has "boomed" since the crackdown began. Here's the report:

"With the liquidation of domestic ICO and Bitcoin transactions in early September, over-the-counter trading has boomed again. From the transaction data of the two platforms of LocalBitcoin and Paxful, the share of BTC-CNY over-the-counter trading in its total amount of over-the-counter Bitcoin transactions rose from about 5% to about 20%."

Cho told Business Insider the firm's strategy isn't necessarily to dominate China. 

"China has always been a grey box with a lot of things," Cho said. "So I don't look at the opportunity as specifically trying to capture China."

Rather, it's about dominating the entire Asian market, according to Cho, and becoming a truly global, round-the-clock business. 

"We want to provide institutional-grade liquidity to world, regardless of where you are located," he said.

Sebastian Quinn-Watson, a partner at Blockchain Global, a cryptocurrency exchange operator, told Business Insider he is very bullish on the crypto-market in Asia. Here's Quinn-Watson:

The mining companies are exploding in size in China.  It is a frenzied market for M&A activity with many of the larger players acquiring smaller players.  There are also a number of very large Japanese mining operations hunting for deals in China as well.  

As for China, he says, it is all systems go in the OTC markets. 

"The ban on exchanges has triggered an explosion in innovation in decentralized exchanges and applications for OTC exchanges," Quinn-Watson said. "Proving the technology and entrepreneurs behind it are allowing the market to live despite the sharp regulatory changes."

SEE ALSO: A small band of trading specialists are taking calls about $50 million bitcoin deals

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Cryptocurrency exchanges are rife with "pump and dump" scams that would be illegal in most markets and leave unsuspecting investors at risk of large losses, a Business Insider investigation has found.

Crypto traders are using the secure messaging app Telegram to orchestrate the scams. Their strategy is to suddenly inflate the price of a cryptocurrency by coordinating a few buyers to act at specific times. 

Then, after the price rises, they attract other, unwitting investors to buy into the price momentum. The "pumpers" quickly sell the coin to make a profit. The coins often crash just minutes after the initial surge, leaving the second wave of investors with losses. See how the strategy works here.

In Wall Street news, Goldman Sachs' new online lending business just hit a $2 billion milestone. Nasdaq's under attack over a product that could expose big traders — but one rival says it has been doing this for years. And one of the largest hedge funds in the world is ready to add bitcoin to its "investment universe."

Something "very unusual" is happening in markets, according to Deutsche Bank. Investors should be beware of the "irrational exuberance" that could spell disaster for the market, according to Bank of America Merrill Lynch. And tech stocks once again look unstoppable.

In deal news: 

• Roku has tripled since going public — and traders betting against the stock are getting crushed
• CREDIT SUISSE: A takeover won't save Buffalo Wild Wings
• Reddit is reportedly considering an IPO
• Amazon agrees to sell its cloud business in China for $300 million
• Walmart just struck another deal that confirms the death of America's middle class as we know it
• A drugmaker that's taking an unconventional approach to cancer drugs just got a $1.5 billion endorsement

Lastly, the Porsche Panamera is Business Insider's 2017 Car of the Year.

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• Bank of America Merrill Lynch's fund-manager survey shows that a record number of participants are taking on higher-than-normal levels of risk.
• A large number of investors acknowledge that markets are overvalued, while cash levels are still falling, which signals overconfidence.

In markets, it's common knowledge that when things are going well, overconfidence can come back and bite you.

And that, in turn, poses one of the great existential dilemmas of investing: Do you take a more measured approach, knowing that your hubris could eventually be your undoing? Or do you push aside those lingering doubts and forge ahead in blind pursuit of further returns?

According to Bank of America Merrill Lynch's latest monthly fund-manager survey, which includes 206 panelists who manage $610 billion, investors are opting for the latter.

The firm finds that a record number of survey responders are taking higher-than-normal risk. That comes at a time when US stock market valuations are sitting close to their highest in history, creating a precarious situation in which investors are feeling emboldened at a time when they should be exhibiting caution.

In addition to their unprecedented risk threshold, 48% of survey participants also said they saw equity valuations at a record high. And BAML notes that all of this is happening as surveyed cash levels dwindle to 4.4% of overall holdings, their lowest since October 2013. The firm also said in July its private client cash was at a record low as a percentage of total assets.

"Net percentage saying equities are overvalued is at a record high, yet cash levels are falling," BAML's chief investment strategist, Michael Hartnett, wrote in a note. "This is a sign of 'irrational exuberance.'"

Harnett also says expectations around a "Goldilocks" economy — one characterized by high growth and low inflation — are at an all-time high. He sees this trend continuing as the GOP tries to implement its tax plan, which a handful strategists across Wall Street see underpinning further gains in stocks through 2018.

With all of that in mind, it's important to note that BAML has been sounding the alarm about unstable market conditions for months. Back in July, Hartnett warned that central-bank tightening could pop what he described as a bubble in risk assets. He even went as far as to coin the term "Icarus trade" to describe the "melt up" in stocks and commodities since 2016.

The findings in the latest fund-manager survey have done little to dissuade Hartnett from thinking investors are flying too close to the sun. And while many alarm signals are going off, the market has proved adept at avoiding catastrophe as US equities stretch into the ninth year of their historic bull run. At a certain point, something's got to give.

SEE ALSO: Tech stocks once again look unstoppable

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• Emirates ordered 40 Boeing 787-10 Dreamliners at the 2017 Dubai Air Show.
• The airline was expected to order more Airbus A380s.Emirates is concerned that Airbus may cancel the A380 program.
• "Most operators of the A380 I've talked to are not thrilled with the performance of the A380 given the cost," Delta CEO Ed Bastian said in an interview.

Of the 318 A380 superjumbos that Airbus has sold in the 15 years since it began building the massive aircraft, one airline — Emirates — has bought nearly half.

The airline, based in Dubai, United Arab Emirates, operates 100 A380s — a double-decker aircraft that can carry as many as 800 passengers on long flights — while no other airline owns more than 19.

So when Emirates opened the 2017 Dubai Air Show this week with a blockbuster $15.1 billion order for 40 Boeing 787-10 Dreamliners — a sleeker, more efficient aircraft made by Airbus's rival — it was a massive surprise. In fact, as Bloomberg News reporters at the show noted, Airbus was expected to announce a deal of that very size for the A380.

Even though Emirates' president, Sir Tim Clark, told CNBC on Monday that the company hadn't ruled out buying more A380s in the future, the reason he gave for going with the Boeing aircraft was particularly troubling. Emirates won't order any more A380s, he said, until Airbus can firmly commit to not canceling the superjumbo.

Clark's concern may become a self-fulfilling prophecy for Airbus.

For most other planes, Airbus could firm up its order books and stabilize the program by fishing for sales elsewhere.

But it can't do that with the A380. At this point, Emirates isn't just the plane's most important customer — it is effectively the plane's only customer. And that means what happened in Dubai this week could mark the end of the giant aircraft.

Airbus was not immediately available for comment.

It was going to revolutionize air travel

When Airbus unveiled the A380 in the mid-2000s, it was supposed to revolutionize air travel.

It was to usher in a new era of luxury and comfort, with the economics to make airlines happy. We were dazzled by visions of flying casinos and stylish in-flight lounges. And the sheer magnitude of the aircraft is awe-inspiring.

Even though the casino never materialized, the A380 has certainly delivered on the luxury and comfort it promised.

But for airlines, the airplane hasn't quite delivered the financial returns operators sought — especially when compared with cheaper, more fuel-efficient twin-engine jets like the Boeing 787 and 777, and even the Airbus A350.

"The A380, I'll be honest with you, has not been a wildly successful aircraft given that [Emirates] is the main operator of the plane," Delta CEO Ed Bastian told Business Insider in an interview. "Most operators of the A380 I've talked to are not thrilled with the performance of the A380 given the cost."

Even those who like the A380 recognize the economic challenges associated with operating the plane.

"If we were to fly two 787s tail-to-tail, the per-seat cost would be less than the A380," the CEO of Qantas, Alan Joyce, told Business Insider in an interview. (Qantas' 787 Dreamliner has 236 seats, while its A380 has 486.)

Qantas ordered 20 of the double-deckers but decided to take delivery of only 12. Joyce says the Dreamliner offers the airline more flexibility and lower financial risk, especially on routes with inconsistent or seasonal demand.

Is the end really here?

The plane billed as the second coming of the Boeing 747 is really no more than a niche product. The 747 itself is on life support, with production rates slowed to one plane every two months.

These days, the bulk of long-haul flying is done by twin-engine wide-bodies. The big four-engine jets are relegated to special high-density routes.

"The A380 still has a role on airports that have slot restrictions" — where you can't add a second flight — "or where the scheduling windows work" for a single flight, like out of Los Angeles, Joyce said.

That means the only thing that can save the superjumbo is airport congestion.

It's the same argument Clark has made in support of the plane.

"Airport congestion around the world is getting worse," Clark told Business Insider in 2016. "And up-gauging aircraft is a solution for this."

Clark and Emirates may still order another tranche of A380s. The airline likes to keep its average fleet age at about six years, and some of its older superjumbos are approaching the 10-year mark. And updating the A380 could be pricey. For instance, Singapore Airlines is spending $850 million for new interiors in its 19 A380s. It may be more economically prudent to order new planes.

Whether that will be enough to save the A380 remains to be seen.

SEE ALSO: Check out Emirates' new Mercedes-Benz first class luxury suites

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• GoPro announced it won't offer its best features in its new 360-degree Fusion camera until early 2018.
• The company's shares slid after the news.
• To watch GoPro's stock price move, click here.

GoPro's stock is sliding, down 2.39% at $8.18, after the camera company announced that it would roll out its new 360-degree Fusion camera without some of its best features.

Its Overcapture software allows users to pan and zoom on footage captured in the 360 video so that "you always get your shot," the company said on its website. However, this feature, unavailable in other editing software at the moment, will not be released until early 2018, the company stated. 

This leaves early buyers locked out of the new features. Oppenheimer analyst Andrew Uerkwitz earlier lauded the company as "highly innovative" for its hardware and software.

Google recently announced its new "Clips" camera, which is a play off of GoPro's small action cameras. Despite the competition, Wall Street analysts maintain that GoPro still has a lot going for it.

Last month, JPMorgan analyst Paul Coster said that Google's camera "validates part of GoPro's market" but also "appears to be going in a different direction," adding that the camera is not wearable, or meant for outdoor action, which is the mainstay of GoPro's niche appeal.

GoPro shares are down 6.62% for the year.

To read why competition with Google might be a good thing for GoPro, click here.

SEE ALSO: JPMORGAN: Google taking on GoPro is actually a good thing for the camera company

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• Buffalo Wild Wings popped more than 24% on reports of a takeover offer from Roark Capital Group.
• But the company's future isn't clear-cut, even if the takeover goes through.
• The price of chicken wings is at historic highs and is the root of deeper problems at the company.
• Watch Buffalo Wild Wings' stock price move in real time.

Buffalo Wild Wings has been struggling lately, with the stock falling 5.43% in the last year. But on Monday, reports that the company had received a $150 per share takeover offer from Roark Capital Group sent shares soaring by more than 24%.

For investors, a takeover could mean the start of a turnaround for the company, but Jason West, an analyst at Credit Suisse, thinks the company's future is largely out of its own hands.

"Key risks include failure of the acquisition, competitive discounting, and wing price trends," West wrote in a note to clients.

Even with the potential for a $2.3 billion takeover offer from Roark Capital, the restaurant still has to sell a lot of wings with attractive margins to turn a profit. The company called the price of chicken wings "historically high" in its third-quarter earnings results, and announced that it would be ending its popular half-price wings promotion due to the rising costs.

If Roark Capital completes a takeover of BWW, it could be in the perfect place to pick the new CEO, and usher in a new plan to turn around the company, West said. Roark could be in the position to recover about $1 per share in earnings power, but only if "wing costs return to historical norms over time." But it's hard to predict when chicken wing prices will drop, and current prices could be a new normal, West said.

The decline at Buffalo Wild Wings isn't totally dependent on the price of chicken wings. The entire casual dining sector has been hurting, which West said is just another reason the company could continue to slip despite a takeover.

West remained neutral on the company and has a price target of $120, which is about 17% lower than the company's current price of $148.55.

Read more about the reported takeover offer.

SEE ALSO: Buffalo Wild Wings soars on reported takeover offer

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• Man Group, a UK-based investment management firm, said it would include bitcoin in its "investment universe" if bitcoin futures successfully launch. 
• CME, the world's largest exchange group, said it would launch a bitcoin futures product by year-end. 
• Such a product could open the door to more traditional Wall Street firms entering the bitcoin market. 

One of the largest hedge funds in the world might hop on the bitcoin trade. 

Luke Ellis, the CEO of Man Group, the UK-based investor with $95 billion in funds under management, said the firm would include bitcoin in its "investment universe" if bitcoin futures successfully launch, according to a tweet by Reuters. 

CME announced at the end of October that it would launch a bitcoin futures product by year-end. On Monday, CME chairman and CEO Terry Duffy said such a product would likely be ready by the second-week of December. 

The launch of bitcoin futures by an established exchange is likely to to open the door to wider participation in bitcoin trading by other Wall Street firms since such firms are already plugged into their systems for other products. It will also likely dampen volatility for the coin, which is known for its wild price swings. 

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• A new Credit Suisse report finds there are 2.3 million new millionaires in the world, putting the total at 36 million.
• Collectively, they make up less than 1% of the population but hold as much wealth as 46% of the world.
• Forecasts indicate the world could soon see many more millionaires, and perhaps even the first trillionaire.

Since 2016, the world has seen a new crop of 2.3 million people reach a net worth with six zeroes.

According to Credit Suisse's new Global Wealth Report 2017, there are now 36 million millionaires in the world — a 170% jump in total numbers from the year 2000. Together, these millionaires hold as much wealth as 46% of the population.

Wealth inequality has been growing for decades. The world's eight richest people have as much wealth as half of the world's population, and in the US, the proportion of people identifying as "have-nots" versus "haves" has more than doubled since 1988.

Credit Suisse's report did show that people are generally getting wealthier overall. In 2017, global average wealth hit a new high of $56,540, compared to $52,074 in 2007.

The world's ultra-wealthy are getting richer too, and to far greater degrees. In 2000, the top 1% held 45.5% of the world's wealth. Today, they hold 50.1% — more than half of the rest of the world.

According to Credit Suisse's past reports, becoming a millionaire might be more common over the coming decades.

In 2013, the bank published a report speculating that 20% of the world's population could be millionaires within two generations. In other words, sometime before 2073 (as of the report's writing) there could be a billion millionaires walking the Earth.

The rapid influx of new wealth could even create the first trillionaire within a couple decades, according to a recent Oxfam report. There were 793 billionaires worldwide in 2009. Added up, their net worths totaled $2.4 trillion. By 2016, the richest 793 people maintained net worths of $5 trillion — an annual growth of 11%.

"If these returns continue," the report stated, "it is quite possible that we could see the world's first trillionaire within 25 years."

SEE ALSO: 32-year-old investor with ties to Elon Musk wants to upend America with a crazy utopian plan for the future

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• Wall Street has been worried about the subprime auto loan market for some time. 
• According to new research from the New York Federal Reserve, the delinquency rate for subprime loans originated by auto finance companies is spiking. 
• "Although the impact on the larger financial sector may be muted, there are over 23 million consumers who hold subprime auto loans," the report said. 

The New York Federal Reserve is flagging some concern over a $200 billion auto loan market.

In a post out Tuesday, researchers led by Andrew Haughwout highlighted the nearly doubling of the rate of delinquencies in subprime auto loans originated by auto finance companies since 2011.

"Since 2011, the overall delinquency rate of loans originated by auto finance companies has significantly deteriorated," the report said. 

The 90+ days delinquent rate for subprime auto loans originated by auto finance companies is up more than two percentage points since 2014, and now stands at close to 10%, according to the report. That's higher than the highest rate following the dotcom crash, and close to the highs in 2009 after the financial crisis. 

In contrast, the delinquency rate on bank auto loans has been steadily improving. 

"The overall delinquency rate for auto loans—published in our Quarterly Report—shows only a very slow increase masking the sharp rise in subprime delinquency, which is diluted by the increase in prime loans with better performance," he said.

The Fed isn't the first to express alarm over the subprime auto loan market. In early 2017, it was the topic du jour on Wall Street, with a cluster of firms expressing concern about the direction the market was headed in. 

At the time, Fitch highlighted the impact auto finance companies were having on the market. It said that "deteriorating credit performance will be more acute in the subprime segment, driven to some extent by the expansion of less-tenured independent auto finance companies that have demonstrated higher-risk appetites and less underwriting discipline."

While these auto finance companies pose less of a risk than banks might, the impact on consumers is still significant. The Fed in its latest report said:

"Although the impact on the larger financial sector may be muted, there are over 23 million consumers who hold subprime auto loans. These consumers may find their credit reports further damaged after a default or encounter further financial difficulties after experiencing a car repossession."

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• Reddit is considering an initial public offering at some point in the future, its CEO said Thursday.
• The timeline for a public offering is still uncertain.

Reddit, the "front page of the internet" that has been ravaged by scandals in its 12-year history, is considering an initial public offering, CEO Steve Huffman reportedly said at an Internet Association summit in San Francisco on Monday. 

"The time frame is pretty far out,” he said, according to Variety, adding that going public is "the only responsible choice" for the company going forward.

Reddit was sold to magazine empire Condé Nast for “between $10 and $20 million” in 2006, a year after its founding. Advance Publications, Condé's parent company, eventually spun the social network off in 2012, but remains its largest stakeholder. 

Today, Reddit is valued at $1.8 billion and is the eighth most popular site on the internet. Huffman also said Monday that advertising revenues have increased five fold over the past few years, Axios reported. 

But its path to popularity was mired with controversies including hacked celebrity photos and allegations of child pornography. This year, Reddit has cleaned up its act by banning hateful user-created communities, known as “subreddits,” that glorified abuse, violence, and far-right ideologies. 

That’s a stark 180-degree pivot from Reddit’s historical approach to such user-generated content. In 2014, then-CEO Yishan Wong defended Reddit's hands-off approach, writing that "every man is responsible for his own soul ... We uphold the ideal of free speech on reddit as much as possible not because we are legally bound to, but because we believe that you — the user — has the right to choose between right and wrong." 

Business Insider has reached out to Reddit for more information about a possible IPO and will update this post if comment is received.

SEE ALSO: Reddit is banning Nazi communities as it cracks down on 'violent' content

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• Apple's stellar earnings for the fourth quarter has investors happy with the performance of the company.
• After reviewing Apple's 10K, an RBC Capital Markets analyst sees multiple upsides in the numbers for the company.
• To view Apple's stock price in real time, click here.

Apple's standout fourth quarter earnings report has boosted investor sentiment about stronger earnings growth in the next quarter.

Amit Daryanani, an analyst with RBC Capital Markets, looked at Apple's 10-K and saw multiple tailwinds that could drive double-digit EPS growth in the next two years:

• The average selling price for the iPhone X, which can range from $999 to 1,149, should give the Silicon Valley company's profits a boost.
• Gross margins should benefit from Apple's service business, which Daryanani sees as growing at a faster-than-expected rate, and a better mix of its other higher-margin businesses.
• Lastly, Daryanani cites potential tax reform as a tailwind for the company. The tech giant derives about 62% of its revenues overseas, and has reportedly used tax havens to avoid paying taxes to the US. Lawmakers' plans to reduce the corporate tax rate and encourage repatriation of those foreign profits could fall in Apple's favor.

Apple has floated around a $900 billion market cap since its earnings report. Wall Street has been bullish, keeping a careful eye on its success in its penetration into emerging markets and its enterprise, or business, markets.

"We believe AAPL’s current stock price creates an attractive entry point for investors to benefit from its ability to generate revenue and EPS growth in FY18," Daryanani wrote in a note.

Apple's stock is at $173.07 per share and is up 49.11% for the year.

Find out how close Apple is to becoming the first $1 trillion company.

SEE ALSO: Apple is less than $20 a share away from being the first $1 trillion company

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The post MadHive’s Mission to Restore Transparency and Fairness to Advertising appeared first on Bitcoin Magazine.

Bitcoin cash is up again, after record price highs last week, but are the bulls running out of steam?

• Nasdaq is launching a new data product called Intellicator, that aims to read sentiment toward different segments of the options market.
• That's prompted criticism from rivals. Startup exchange IEX published a blog Monday calling out Nasdaq for "selling out investors" in order to make money.
• Nasdaq, which is best known as a US equities exchange operator, has made data a focal point of its business.

"Enough is enough."

IEX, the startup stock exchange, isn't a fan of Nasdaq's latest foray into data. The exchange operator's newest product — called Intellicator — has raised opposition from a number of market participants, including IEX and SIFMA, a large organization representing big trading firms. The objections are all basically around the idea that the product might give away information about large firms' trading strategies. 

But IEX, which was made famous in Michael Lewis' "Flash Boys," says Intellicator is just the tip of the iceberg. 

In a blog post published Monday, IEX's Eric Stockland called out Nasdaq for over a decade of selling data products, which they say "sell out" investors in favor of traders. 

"Market Velocity and Market Forces"

"For 11 years — up until two weeks ago — Nasdaq sold data feeds called “Market Velocity” and “Market Forces” as part of a “Market Analytics Data Package," Stockland said. 

Those data feeds incorporated information that most brokerage firms would have expected to be private, according to IEX. The two products were recently discontinued by Nasdaq.  

They incorporated  "displayable orders and non-display orders, providing unique data that doesn’t show up in a traditional quote feed," according to an archive of now deleted marketing materials by Nasdaq. 

Non-display orders include things such as immediate-or-cancel orders, according to IEX. Such an order allows a trader to essentially "ping" the Nasdaq stock exchange to see if they can execute a trade. If they can, then the order will go through immediately. If there's not enough stock readily available to be bought or sold, then the order will be canceled. 

"Non-displayed orders are meant to be hidden from view," according to IEX. "Nasdaq violated those basic principles for a quick buck."

A filing to the SEC indicates that Nasdaq customers expressed concerns about "Market Velocity and Market Forces." Here's the relevant passage from the filing (emphasis added):

"Recently, customers have inquired about possible modifications to the product. Specifically, customers expressed concern that data contained in the product may reveal too much information about the trading strategies of participants on the Exchange. 

The exchange said it did not find such concerns "well-founded."

IEX also called out Nasdaq Pathfinders, a product that aims to help subscribers "[monitor] the buying and selling of market participants (‘pathfinders’) to identify those that are aggressively taking a position over an extended period of time.”

"To minimize market impact, investors do everything they can to disguise their intentions — including breaking up large orders into smaller ones so they aren’t obviously coming from a large investor," IEX said. "Pathfinders directly undermines those efforts."

Data has quickly become an important area of profit for exchanges and a point of contention on Wall Street. 

Big traders have long accused Nasdaq and its rival the New York Stock Exchange for unfairly spiking the cost of their proprietary market data, which market-makers claim is essential to competing in the trading business.

Revenues brought in from data have increased for Nasdaq from $337 million in 2012 to $427 million in 2016, according to the exchange. Nasdaq is putting more capital behind data products, according to its updated strategy. 

Investors have responded positively to the move. Nasdaq's stock is up more than 13% since the beginning of the year.

Nasdaq says they have the law on their side

Nasdaq declined to comment on the specifics of the blog. 

But Oliver Albers, head of sales and account management for Nasdaq's Global Information Services, however, told Business Insider that the SEC has encouraged exchanges to create products that make markets more transparent.

"Nasdaq has a history of innovation in the data products space and takes great care to consult with our customers to ensure our products cannot be used in a way that would be harmful to the market," Albers said. 

He said the firm has the Securities and Exchange Commission on their side. Here's Albers in a statement to Business Insider:

“For many years, the industry has alleged that exchanges have market power over data, but when the SEC’s Chief Administrative Law Judge looked at that issue, she ruled that market data pricing is subject to competitive forces.

To be sure, there are a number of market participants who welcome these products. Milind Sharma, CEO of QuantZ Capital, a hedge fund, told Business Insider these type of products give the market color.

"Greater transparency and more granular information about market microstructure ought to be an unadulterated good for making markets efficient," he said.

Sharma, the head of smaller investment shop, said he would benefit from a product like Intellicator because it provides his firm with a view of the market that is typically only available to larger firms. 

SEE ALSO: Wall Street trading giant Virtu cut staff by half and laid in to a $1.4 billion acquisition — now it can't wait for market chaos

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• GE's turnaround plan was announced on Monday.
• For Deane Dray, an analyst at RBC Capital Markets, the plan isn't enough, and won't happen fast enough.
• Dray downgraded the stock from a buy to a neutral on the news and lowered the price target by 20%.
• Watch GE stock trade in real time here.

GE's new CEO John Flannery announced a rash of changes on Monday with the hopes of turning around the struggling company. After cutting the company's dividend and lowering forward-looking guidance, shares of GE fell about 7.49% on Monday.

On Tuesday, the company continued to fall as analysts processed the potential impacts of all the changes.

"We are downgrading GE from Outperform to Sector Perform based on our expectation that the company's turnaround will now be more protracted than previously anticipated," Deane Dray, analyst at RBC Capital Markets, said in a note to clients. "While the market was not expecting any quick fixes, we believe that CEO John Flannery’s highly anticipated plan fell short of expectations."

On Monday, GE announced the highly-anticipated details of Flannery's plan to turnaround the company. GE announced a 50% cut in its dividend to $0.12 per share, a reduction in its total headcount, a lower than expected 2018 guidance and the sale of several underperforming units.

Dray said the company's plan doesn't live up to the sweeping reset RBC had been hoping for. The company's dividend cut pointed to cashflow problems, particularly in the underperforming GE Capital business. GE's power business was also said to be struggling more than Dray had expected.

Dray lowered his price target from $25 to $20 based on lower expected earnings per share in both 2018 and 2019. Dray lowered his 2018 expected EPS by 14% to $1.03.

The company has fallen 19.51% in the last month, and Dray said more declines are ahead for GE. Dray also said that if the comeback takes long enough, GE's plans could be further stalled by a future economic slowdown. 

"Even with the shares having significantly underperformed this year, it is hard to see anything better than a Sector Perform return potential, and risk-reward looks balanced," Dray said.

The silver lining, for Dray, was that the plan for the company's turnaround was finally public. Even if it's not exactly what was expected, the company is no longer in limbo.

Read more about GE's turnaround plan here.

SEE ALSO: GE is falling after announcing disappointing guidance

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A state-owned electric utility in China is rebuffing rumors that bitcoin mining has been deemed illegal by the government.

• Bayer signed a partnership with cancer drugmaker Loxo Oncology in a deal that could be worth up to $1.5 billion. 
• Loxo is developing treatments that act on cancerous genetic mutations, so that the type of cancer someone has wouldn't matter so much as the genetic information gleaned from sequencing the tumor's DNA.
• The company is planning to file for FDA approval by the end of 2017 or early 2018.

A company that's building drugs that act on cancerous genetic mutations rather than the type of cancer a person has just got a $1.5 billion endorsement from pharmaceutical giant Bayer.

As part of a deal to commercialize and develop two of Loxo Oncology's cancer drugs, Loxo will get $400 million upfront, with the potential to make $1.15 billion if the drug gets approved and hits a certain amount of sales. 

The idea with these genetically defined cancer treatments is that the type of cancer someone has doesn't matter so much as the genetic information gleaned from sequencing the tumor.

Targeting a genetic mutation instead of cancer type

Scientists have seen genetic patterns across cancer types for years, but the topic started attracting more attention in 2013 after the discovery that endometrial cancer was genetically similar to forms of ovarian and breast cancer.

But building a treatment that's specific to a genetic mutation is a new approach to treating cancer. Most companies develop treatments for specific types of cancer, like lung cancer or melanoma, and seek approval just for that one kind of tumor at first, before setting up more trials to see how the drug does in other types of cancer.

In May, the FDA approved a drug based on genetics rather than tissue type for the first time, paving the way for others including Loxo.

Loxo's first drug, larotrectinib, works in cancer patients with a mutation called a "TRK gene fusion." Loxo chief business officer Jake Van Naarde told Business Insider in 2016 that the company estimates that there's anywhere from 1,500 to 5,000 new cases of late-stage cancers that have the TRK fusion a year. The company has seen promising results so far in its human trials.

Bayer said in a release Tuesday that Loxo's planning to file the drug for approval by the end of 2017 or early 2018. 

SEE ALSO: Healthcare companies are taking Amazon very seriously

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The price of Bitcoin saw large gains last week in anticipation of a major code update, known as SegWit2x, which was due to happen around November 16. The upgrade would have increased the size of blocks on the blockchain powering Bitcoin from 1 MB to 2 MB. This would have increased the speed and size of transactions that can be processed on the Bitcoin blockchain, making it more efficient.

However, on Wednesday the update was postponed until further notice due to a lack of consensus in the Bitcoin developer community. As a result, over the weekend the price of Bitcoin tumbled as low as $5,600 from an earlier record high of $7,800, recovering somewhat to $6,496 at the time of writing.

Over the same period, two rival cryptocurrencies based on underlying networks with more processing power saw massive gains:

• Bitcoin Cash, the cryptocurrency that split off from Bitcoin in August, hit $800 late on Friday, and went on to almost double in price in the next 24 hours to an all-time high of $1,856, according to CoinMarketCap data. This resulted in Bitcoin Cash overtaking Ether to become the cryptocurrency with the second-highest market capitalization after Bitcoin, according to CoinDesk. Analysts at The Wall Street Journal and Bloomberg attributed Bitcoin Cash's surge to its larger block size of 8 MB, which means it can process transactions quicker and cheaper than Bitcoin, making it a more efficient means of transaction.
• Dash, a less well-known cryptocurrency, also saw major price gains over the weekend, rising from $331 on Friday to an all-time high of $542 on Sunday, before receding to $438 at the time of writing. That's likely the result of a Dash developer announcing an upgrade to increase Dash's block size to 2 MB last week, meaning the network on which the cryptocurrency is built now also has a higher block size than Bitcoin's blockchain, which has stayed capped at 1 MB.

These developments could mean Bitcoin's developers may rethink the SegWit2x suspension. That the two cryptocurrencies that rest on networks with higher processing power saw their price increase astronomically over the weekend, while Bitcoin, which rests on a network with lower processing power, saw its price slump, suggests a correlation between block size and investor enthusiasm.

Block size matters because some people are investing in Bitcoin as a means of transaction, which can only be valuable if it can process transactions efficiently, which a small block size would prevent. As such, this latest crash may prompt those who voted to suspend SegWit2 to rethink their decision, especially if investor sentiment keeps souring and funds keep migrating away from the cryptocurrency.

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• Goldman Sachs launched Marcus, an online lending business for customers seeking loans of $30,000 or less, in October 2016.
• The business hit a $2 billion milestone last night, according to CFO Marty Chavez.

Goldman Sachs' Marcus business just hit a $2 billion milestone. 

The US bank launched online lending business Marcus last October, and passed the $1 billion mark this summer. In a September presentation, the bank said it expected to have lent out $2 billion by year end.

But in a presentation on Tuesday, chief financial officer Marty Chavez said the bank hit that milestone last night, suggesting the platform may be picking up momentum in terms of issuing loans. According to the presentation, Marcus had $1.96 billion in originations as of November 9, which would imply $40 million in new loans in four days. 

Chavez also delivered more information on the makeup of the Marcus loan book in the presentation, delivered at a Bank of America Merrill Lynch event. The loan portfolio has an average APR of 12%, which compares with charges of 16% plus on credit card balances. The loans have an average tenor of four years, with an average loan amount of $15,000, according to a slide from the presentation deck. 

The bank has previously said that it sees a $1 billion revenue opportunity in the Marcus loan and deposit platform. Chavez said Tuesday that Goldman Sachs can see a $13 billion lending opportunity with Marcus over three years, assuming a 6% market share in what Goldman calculates is a $200-$250 billion addressable market. 

Harit Talwar, head of digital finance at Goldman Sachs, said at the event that Marcus' growth was slower than the growth in demand for the product, and that the bank was declining a lot of business. 

More to follow

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• IMF Deputy Managing Director warns against the dangers of fragmentation in markets.
• Speaking at UBS' annual European Conference, David Lipton said that Brexit will serve to focus "our minds on the future of the financial system architecture."
• Emphasised IMF's belief in eurozone moving towards fiscal, banking, and capital markets unions.

LONDON — David Lipton, the deputy managing director of the International Monetary Fund, has warned of the potentially "costly" consequences of the fragmentation of banking and capital markets in Europe in the aftermath of Brexit.

In a speech at Swiss bank UBS' annual European Conference, Lipton — who previously worked in both the Clinton and Obama administrations, and is now effectively Christine Lagarde's number two — said that Brexit will serve to focus "our minds on the future of the financial system architecture," on the continent, but made clear that fragmenting functions is in no one's best interests.

"While it remains difficult to predict all the consequences, the prospect of Brexit surely concentrates our minds on the future of the financial system architecture," he told the conference.

"And on the question of how to avoid fragmentation of banking and capital markets, which would prove costly.

"With the untangling of the markets and institutions whose Euro-based lifeblood flows through London, it will be essential to address the where’s and how’s of the financial integration and oversight capacity that the EU-27 will require."

During his speech, Lipton was keen to stress the IMF's belief that Eurozone nations should continue to look towards the creation of "banking, capital market, and fiscal unions," although he acknowledged that it "appears to be a distant horizon."

"So, is it just 'pie in the sky' to talk about banking, capital market, and fiscal unions? Today it appears to be a distant horizon — but an important one for Europe to reach," he said.

Since the vote for Brexit, concerns have been raised about London's future as a financial centre, particularly when it comes to the potential end of the City's role at the heart of euro-denominated derivative clearing. 

Eurozone officials have long sought to bring the clearing activities currently housed in the UK onto continental Europe, failing in a legal battle in 2015. However, the Brexit vote last summer has brought renewed impetus to these claims, with the argument that euro-based derivatives should be cleared in the European Union, not outside, as would be the case if the business remains in London post-Brexit.

"Fragmentation of such global markets by jurisdiction or currency would reduce the benefits of central clearing. EU27 firms account for only a quarter of global activity in cleared euro interest rate swaps, and about 14% of total interest rate swaps in all currencies cleared by LCH," Bank of England Governor Mark Carney warned in a speech at London's Mansion House in June.

Brexit will likely speed the process of the European Union's plan for a capital markets union — a scheme designed to allow businesses easier access to cross-border funding.

"Progress on the EU action plan for capital market union is slower than desired. But Brexit likely will change that," he said.

"As you know, about one-third of the EU’s market-based financing involves London-based banks, including US institutions."

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• Roku has tripled since going public in late September, spiking on Monday after reporting sales that beat Wall Street estimates.
• Traders betting against Roku have lost more than $100 million since the company's initial public offering.

When it comes to television these days, it never pays to bet against the cord-cutters.

Traders in newly-public Roku are finding that out the hard way.

They've piled into wagers against the company as the stock — which started trading on September 27 — has tripled in price. That surge to $42 a share from the initial public offering price of $14 has resulted in $108 million in mark-to-market losses for short sellers, according to data compiled by financial-analytics firm S3 Partners.

That includes a $48.5 million loss on Monday alone as Roku shares climbed as much as 28%, riding the momentum of a better-than-expected earnings report, S3 data show. With sales that beat Wall Street estimates, Roku is giving investors confidence it is making progress on its plan to evolve from a commodity hardware company into an advertising business.

While short interest — a measure of bets that a stock will fall — has multiplied since Roku's IPO, it has stayed surprisingly unchanged throughout most of November. To S3, this means that traders haven't been taking profits on short positions, which in turn suggests that the recent move higher is due to outright bullish sentiment. That's a good sign for a company like Roku, which is navigating a crowded field of digital competitors.

And if you're looking at Roku's elevated price and thinking now's a good time to get short, you might be sorely disappointed. S3 points out that the number of shares available for lending is starting to dwindle, which is driving up costs.

"If shorts begin to eat into this tight inventory and increase their positions we can expect stock borrow rates to increase quickly," Ihor Dusaniwsky, managing director of predictive analytics at S3, wrote in a client note.

Trader attention will now shift to full-year 2017 results. Roku says it's now on track to bring in $500 million in sales this year, which would be a 20% increase from 2016. If they're unable to achieve that, it would lead to relief for struggling short sellers.

For reference, here's a breakdown of Roku short positions:

SEE ALSO: Tech stocks once again look unstoppable

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• Tech stocks have been an invaluable part of broader stock market strength in 2017, returning more than double the benchmark S&P 500.
• Skeptics said for months that the air would have to come out of tech stocks, which they said had gotten overextended.
• Tech companies have responded by reporting some of the best earnings growth out of any sector in the S&P 500.

The tide was supposed to turn for scorching-hot tech stocks.

To hear skeptics tell it, the group, which was so crucial as major equity indexes ripped past record highs for much of 2017, was getting overextended. And that was supposed to result in a sharp move lower not just in tech but for the whole market.

As recently as October, hedge funds and other large speculators were the most bearish in 16 months on tech. Back in August, investors sold more than $1 billion of tech stocks in one week, the biggest offloading since January 2016. Uncertainty was high even back in mid-July, when the traders were paying their biggest premium since 2008 for hedges against tech losses.

But tech has kept doing what it does best: expanding corporate earnings at a blistering pace. And that has alleviated concerns of a slowdown. After all, earnings growth has been proved time and time again to be the fuel that keeps the 8-1/2-year bull market running.

Tech companies in the S&P 500 expanded profits by 22% in the third quarter, the second-most in the index, trailing only energy, according to Goldman Sachs data. The firm found that the stellar performance was driven by above-forecast 17% sales growth and margin expansion.

And as was the case earlier in the year, tech wielded outsize influence over the rest of the stock market. Earnings surprises in the sector contributed to almost 90% of the benchmark's overall profit beat, relative to consensus estimates, according to Goldman data.

As of Monday's close, tech stocks in the S&P 500 had surged 37% in 2017, more than double the benchmark. That includes an 8.8% gain since the start of October.

Going forward, internationally exposed mega-cap tech companies are expected to benefit from President Donald Trump's proposed corporate tax cut, since they pay among the highest effective rates. Further, because so many large tech firms do so much business overseas, they're also among those best positioned to benefit from the repatriation tax holiday proposed by the GOP.

Here's a look at how market-wide earnings growth — driven by tech — is expected to fare in the coming quarters:

SEE ALSO: General Electric just slashed its dividend — and that could save its stock from free fall

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• Restricting EU migration after Brexit could severely impact certain UK industries reliant on EEA-born workers, including construction and food manufacturing, according to new research from PwC.
• London is most at risk of the consequences of reduced migration, since 14% of its workforce was EEA-born in 2016.
• The UK workforce has sharply increased its reliance on EEA-born workers since 2004, rising from 2% to 7% in 2016.

LONDON — Restricting the migration of EU workers to the UK after Brexit could curtail growth and productivity, according to new research.

PwC's latest UK Economic Outlook report said limiting future EU migration could significantly impact certain industries, including food manufacturing, construction, hotels, restaurants and warehousing. While a skills gap could be filled by enhanced training of UK nationals and automation, the report said, this will take time.

"Limiting migration from the EEA could disproportionately impact some sectors and regions. By identifying the industries and areas that could be worst affected, the government can make informed decisions on post-Brexit migration policy and target their support accordingly," said John Hawksworth, chief economist at PwC.

Hawskworth warned limiting the migration of skilled workers from the EEA to the UK could have "particularly negative implications for longer term productivity and the UK's international competitiveness."

About 7% of the UK's workforce is made up of European Economic Area (EEA) migrants, a sharp rise from 2% in 2004. As the region with the highest percentage of EEA-born workers, rising from 7% in 2004 to 14% in 2016, London is most vulnerable to a drop in migration, the report said.

According to the analysis, almost a third (31%) of the UK's food manufacturing workforce was EEA-born in 2016, compared to 18% of the accommodation workforce and 17% of the warehousing workforce. About 30% of London's construction workforce was also EEA-born — but a fifth of UK-born construction workers in the capital due to retire in the next five years, and there are currently 60,000 vacancies in the industry in London.

The report also found that around 30% of EEA workers were identified as high skilled in 2016, and worked as critical workers in sectors such as medicine, academia and financial services.

"While enhanced training of UK nationals and automation might be a solution in certain sectors if we look 10-20 years ahead, realistically they're unlikely to make up fully for any large reduction in EU migrant workers over the next 5-10 years," said Julia Onslow-Cole, global head of immigration at PwC.

However, the report found that halving net migration from the EU would likely only reduce average UK GDP per capita by around £60 per person (by 2017 values) in 2030.

"Our illustrative estimate of the long term impact of reduced net migration from the EU27 on UK GDP per capita after Brexit is negative, but relatively small compared to many other uncertainties about average UK income levels in 2030," said Hawksworth.

PwC said its research was an "illustrative scenario," and "not a prediction of what will actually happen to EU migration after Brexit."

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• Inflation remains at 3% in October, unchanged from September's reading.
• Figure had been expected to rise to 3.1% in the month, according to forecasters polled prior to the release.
• October's reading marks only the second time since 2012 that inflation has hit 3%.

LONDON — Inflation remained stable in October, staying at a five-year high first reached in the previous month.

The UK's Consumer Prices Index (CPI) inflation rate — the key measure of inflation — was 3% in October, unchanged from September's reading, according to the Office for National Statistics.

October's reading marks only the second time since April 2012 that prices have increased by 3% or more. It is however, lower than most forecasters expected. The consensus among economists was that inflation would rise to 3.1% during the month.

CPI measures the weighted average of prices of a basket of goods and services, such as food, transportation, and medical care.

CPIH, a measure which includes costs associated with maintaining a home — and which the ONS cites as a more useful indicator of living costs than CPI — was 2.8% in the month, once again unchanged from September.

"Inflation remains at a five-year high with rising food prices offset by a fall in the cost of fuel," Mike Prestwood, the ONS' head of inflation said in a statement.

"The rise in the cost of raw materials and goods leaving factories both slowed, with crude oil and petroleum prices both increasing less than at this time last year."

The chart below illustrates the sharp rise in inflation following last year's Brexit vote. OOH represents owner occupiers' housing costs, which measures the cost of owning, maintaining, and living in one's own home:

And here is the ONS' breakdown of how inflation was composed in the month:

The sharp fall in the value of the pound following the UK's vote to leave the EU last year has raised the cost of imports and pushed up the rate of inflation. Most major forecasters believe that inflation's peak is likely to be somewhere around the mark reached in the latest data.

"Looking ahead, October's inflation rate should be the peak," Pantheon Macroeconomics' Samuel Tombs said earlier in the week.

Inflation's impact on the British economy is being exacerbated by the fact that real wages are actually growing more slowly than prices are rising, meaning that the average Brit is actually seeing the amount of money they have to spend decrease.

The ONS' latest wage growth numbers will be released on Wednesday, helping to create a fuller picture of just how intense the squeeze on Britain's consumers is right now.

Earlier on Tuesday, a survey from market research firm Kantar Worldpanel found that grocery prices are rising at their fastest rate in four years as the growing cost of imports since the Brexit vote forces retailers to increase prices. Kantar's data showed grocery inflation at 3.4% in the 12 weeks up to November 5.

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• FTSE 100 firm LandSec posted boosted profits but warned of Brexit "headwinds."
• "Negotiations with the EU are moving more slowly than businesses would have hoped. Coupled with political uncertainty, this is leading to caution," said chief executive Robert Noel.
• The group's performance was boosted by landmark deals including the sale of the Walkie-Talkie skyscraper.

LONDON — Profits at property giant LandSec rose 5.2% in the half-year to September but the firm warned that "the headwinds of Brexit are beginning to show in the economy."

The group, which is the UK's largest listed property company, said profits rose from £203 million ($266) in the six months to 30 September 2017, up year-on-year from £193 million. It also hiked dividends to 18.7 pence per share, up 10.1%.

But chief executive Robert Noel warned Britain's looming departure from the EU was having a negative impact.

"The headwinds of Brexit are beginning to show in the economy," he said.

"Negotiations with the EU are moving more slowly than businesses would have hoped. Coupled with political uncertainty, this is leading to caution."

Noel said retailers were under pressure from increased costs and pressure on disposable income as a result of stagnant wages and growing inflation.

"As we signalled in May, retailers are being challenged by increased costs coupled with pressure on disposable income," he said.

"Our portfolio is relatively well insulated from these dynamics but we are not immune."

LandSec manages more than 26,000,000 square feet of UK commercial property. Its performance to September was boosted by landmark deals including the sale of 20 Fenchurch Street, known as the Walkie-Talkie skyscraper, and its 25-year pre-let of Deutsche Bank's new offices.

Shares were down 0.48% at 8.53 a.m. GMT (3.57 a.m. ET):

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Unlike money in the bank, cryptocurrency can't be unilaterally seized by governments, clawing back a modicum of power for the individual.

• Revenue at Farfetch hit £151 million in 2016.
• Gross merchandise value rose 81% to £547 million last year.
• Losses up 18% to £34 million.

LONDON — Online luxury fashion retailer Farfetch sold over half a billion pounds worth of good across its platform last year, new accounts show.

Gross merchandise value, which measures the value of all goods sold, rose by 81% to £547.9 million in 2016, according to accounts filed with Companies House. Revenue rose by 74% to £151.3 million, while losses rose by 18% to £34 million.

London-headquartered Farfetch is an e-commerce platform for luxury boutiques from around the world. The global elite can virtually shop at over 500 shops in locations such as London, New York, and Paris.

Founder and CEO Jose Neves said in an emailed statement: "Farfetch is a fast-growing company, at an exciting stage in its journey, with over 21 million visits to our websites every month and relationships with over 500 partner boutiques and 200 brands.

"Our trajectory of rapid growth and substantial investment continued in 2016, and we are pleased to have seen 81% growth in gross merchandise value, as well as strong growth, of 74%, in revenues."

£12 million of Farfetch's revenue came from the UK, £40 million came from Europe, and the remaining £98 million came from the rest of the world. Farfetch said in accounts that it now gets 21 million visits per month to its website.

Neves said: "Our programme of investment is designed to support the company’s ambitious growth plans, and over the year we focused our investments on technology, as well as customer acquisition and hiring to support our growth. We have very strong foundations in place and will continue to invest and grow our business as we build the definitive technology platform for the luxury industry."

UK employee numbers rose from 189 in 2015 to 233 last year. Globally, the company employs over 1,900 people. The highest-paid UK director, who is not named, made £272,044 last year.

Farfetch acquired Style.com from Vogue publisher Conde Naste in June of this year and accounts show that Farfetch made a share payment worth $12.5 million to acquire the shopping website.

Founded in 2008, Farfetch was valued at $1.5 billion (£1.1 billion) in a funding round last year, making it one of Britain's few "unicorns" — private tech-based companies worth over $1 billion. Farfetch raised $397 million (£313 million) from online Chinese mall JD.com in June but a new valuation was not disclosed at the time.

The company is tipped for a $5 billion float in the US imminently. CEO and founder Jose Neves said in August that an IPO is the "next logical stage for the company.

Farfetch did not immediately respond to Business Insider's request for comment.

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• Grocery prices increased 3.4% in the last quarter as Brexit driven inflation continues to bite.
• "Prices are rising fastest in markets such as butter, fish and cola," market research firm Kantar Worldpanel said.
• Lidl and Aldi continue to grow rapidly, with Lidl Britain’s fastest growing supermarket for the fifth consecutive quarter.

LONDON — Grocery prices are rising at their fastest rate in four years as the growing cost of imports since the Brexit vote forces retailers to increase prices, according to the latest survey from Kantar Worldpanel.

The sharp fall in the value of the pound following the UK's vote to leave the EU last year has raised the cost of imports and pushed up the rate of inflation, which is now being passed on to UK consumers.

Rising supermarket prices are perhaps the most visible sign of the wider growth in inflation since last June, and that is reflected in Kantar's data, which showed grocery inflation at 3.4% in the 12 weeks up to November 5.

"Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016," the market research firm said.

"Prices are rising fastest in markets such as butter, fish and cola and are falling in only a few markets, including crisps and fresh poultry."

"With the average shop currently costing £18.26, consumers are now paying an extra 62 pence each time and over the course of a year it could add £143.70 to a typical family’s grocery bill," Fraser McKevitt, Kantar's head of retail and consumer insight said in a statement.

Tuesday's data from Kantar comes just before the Office for National Statistics releases its official data on the state of inflation in the UK in October. The ONS' numbers are expected to show that consumer price inflation — which measures a weighted average of prices of a basket of goods and services, such as food, transportation, and medical care — hit 3.1% in the month, a level not seen in over five years.

Alongside its data on the rising price of supermarket shopping, Kantar's survey showed that German discount supermarkets Aldi and Lidl continue their relentless assault on Britain's traditional big supermarkets, growing their total sales rapidly over the last quarter.

"Lidl is Britain’s fastest growing supermarket for the fifth consecutive period, with sales up 15.1%," Kantar said.

"New store openings – and the opportunity they bring to attract new shoppers – have contributed to the impressive
performance."

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[…]

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• Traders "pump and dump" small cryptocurrencies to artificially inflate the price in the hope of making a quick profit at the expense of other investors.
• Business Insider observed five apparent "pump and dumps" of coins in just a week, coordinated using messaging app Telegram. See how they work here.
• The activity would be illegal in most markets but regulators have yet to get to grips with cryptocurrency sector, which has exploded in size to $200 billion in 2017.
• Those who monitor the secondary market say "this sort of activity is rife" and "a real problem."

LONDON — Cryptocurrency exchanges are rife with "pump and dump" scams that would be illegal in most markets and leave unsuspecting investors at risk of large losses, a Business Insider investigation has found.

Crypto traders are using the secure messaging app Telegram to orchestrate the scams. Their strategy is to suddenly inflate the price of a cryptocurrency by coordinating a few buyers to act at specific times.

Then, after the price rises, they attract other, unwitting investors to buy into the price momentum. The "pumpers" quickly sell the coin to make a profit. The coins often crash just minutes after the initial surge, leaving the second wave of investors with losses.

The same scam was most famously carried out in the stock market by the "Wolf of Wall Street" Jordan Belfort, the convicted securities fraudster whose exploits were turned into a film starring Leonardo DiCaprio.

Business Insider observed "pump and dumps" for the cryptocurrencies UBQ, VCash, Chill Coin, Magi Coin, and Indorse over the last two weeks alone. All the scams took place on either Las Vegas-based exchange Bittrex or Russian exchange Yobit.

Ben Yates, a senior associate at law firm RPC who has looked closely at the space, told Business Insider: "It's clear from even casual monitoring of the exchanges that this sort of activity is rife, particularly with altcoins with smaller circulation."

Cryptocurrency exchanges and markets are unregulated in most parts of the world and so these activities are not illegal. However, they highlight the risks associated with this new corner of finance, which has attracted huge amounts of capital in 2017 but is regarded as the "wild west" by critics.

"Pump and dump" schemes are illegal in government-regulated public stock markets, like the London and New York stock exchanges. Several securities lawyers BI spoke to argued that cryptocurrency exchanges should be regulated in the same way. The US Securities and Exchange Commission has said digital currencies are likely to fall under existing securities laws, but it has so far taken little enforcement action.

A $200 billion market

Cryptocurrencies have exploded in popularity in 2017 thanks to the success of "initial coin offerings" (ICOs), where startups issue new digital coins in exchange for real money used to fund their ideas. These coins can be traded on online exchanges, offering greater liquidity to investors in private companies.

Over $3 billion has been raised through ICOs since the start of the year and there are now more than 1,200 cryptocurrencies in circulation, according to CoinMarketCap.com. Celebrities such as Paris Hilton, boxer Floyd Mayweather, rapper The Game, and DJ Khaled have all endorsed ICOs, helping raise the profile of digital currencies.

While retail investors have rushed into the new market, many people have warned about the potential dangers of the emerging space.

Belfort himself, who served 22 months in prison for securities fraud and money laundering in 2000, said recently that ICOs are "a huge gigantic scam that’s going to blow up in so many people’s faces. It’s far worse than anything I was ever doing."

The European Securities and Markets Watchdog (ESMA) said on Monday that ICOs are "extremely risky and highly speculative investments" and "many of the coins or tokens... have no intrinsic value other than... to use them to access or use a service/product." Investors risk "the total loss of your investment", ESMA warned.

Despite similar warnings from other regulators, the total cryptocurrency market has ballooned to almost $200 billion this year. However, well-known coins such as bitcoin, ethereum, and bitcoin cash account for 80% of the market by value, meaning there are a huge number of low-value coins in circulation. Most have thin trading volumes, making them ripe for "pump and dump" manipulation, like penny stocks.

'Market manipulation 101'

"Pump and dump" scams involve people artificially boosting the price of an asset before offloading it to unsuspecting investors at the higher price.

Scammers first organise coordinated buying of a particular coin on a set exchange at a set time. The wave of demand pushes up the price.

The "pumpers" then use social media, online discussion forums, and message boards to attract new buyers. They generally argue that the price spike is evidence of a sustained rally. The "pumpers" then offload their coins to the new buyers who come into the market at a higher price. In most cases, this coordinated "dump" depresses the price of the coins back to their pre-pump levels.

It's unclear how frequently those involved in the "pump and dump" schemes profit from them, as there is no way to guarantee that any given pump will attract enough new buyers into the market.

Mati Greenspan, a senior market analyst at trading platform eToro who covers the cryptocurrency markets, told Business Insider: "Pump and dump schemes are a real problem. Besides the fact that it is illegal and unethical, the results can be incredibly unpredictable."

Regardless, such market manipulation would be illegal in most regulated markets whether or not the participants profited.

Ben Kingsley, a partner at law firm Slaughter & May who specialises in financial regulation, told Business Insider: "If you’re organising people to say ‘this is fantastic, I’m amazed everyone’s not piling into it’ as a way to stimulate demand with a view to then selling into a rising market, that’s market manipulation 101."

RPC's Yates said: "The sorts of coordinated pump and dump activities we are seeing on cryptocurrency markets would fall foul of numerous prohibitions were they carried out on stock markets – they are practically textbook examples of market manipulation and false trading, for example."

'PumpKing Community'

Those involved in the manipulation often make little effort to hide their activities. The "pumping" of coins is regularly referred to in Telegram groups where they are organised.

One group, "PumpKing Community," contained links to "Instructions for pump on Bittrex," as well as links to Facebook groups and Telegrams channels where "pumpers" could go to attract new investors to the market.

Channels like these attract participants to the scam with promises of wealth and quick profits. The PumpKing guide read: "Our PUMP will consist of 4 main stages, and we strongly recommend that you divide your deposit into 3 parts in order to get the maximum profit."

"PumpKing Community" is run by a Telegram user called Ton Montana, an apparent reference to the drug lord character of the film Scarface.

Telegram is heavily encrypted and users can hide behind aliases, meaning it is difficult to track those involved. Ton Montana did not respond to a Telegram message sent by Business Insider.

It is unclear how many people are involved in "pump and dump" scams but groups coordinating them have thousands of members. "PumpKing Community" has over 14,000 members.

Michael Jackson, a venture capitalist at Mangrove Capital who has studied the ICO market, told Business Insider: "I think it’s pretty common — not least because it’s a pretty natural thing to do. Many of the pump and dump guys probably don’t think there’s anything wrong and it is just natural PR."

He added: "Of course, in many regulated environments, such activities end the perpetrator in jail pretty quick."

An open secret

Knowledge of the "pump and dump" problem appears to be an open secret among many cryptocurrency traders. Several have written blog posts warning traders and new cryptocurrency investors to be wary.

Indian-based crypto trader Abdul Qadir Faridi wrote in a blog post in July that people "profit from these pump & dump activity but by indirectly stealing some new group members money or money of the people buying it for higher price after seeing the surge in price."

Brian Schuster wrote in a blog post: "Many users who bought at the peak (called bag holders) will often be left holding a cryptocurrency with declining value. These buyers are the true targets of these pump and dumps, the users who will pay 10x to the insiders for a cryptocurrency that is actually worthless. And once the price rises and falls, [it] will almost never return in value."

'Regulators will slowly move towards a solution'

"Pump and dumps" persist because cryptocurrency markets and exchanges are largely unregulated. Financial watchdogs around the world are only just getting to grips with initial coin offerings, with US and UK regulators cautioning investors on the risks of the market. China has banned both ICOs and exchanges.

Slaughter & May's Kingsley said he believes regulators "ought to" take the same approach to policing these scams in the token trading world as they do in relation to securities because "it creates the same harm."

"It causes unwitting investors to suffer a loss, and it undermines the integrity of those markets," he said.

"There is definitely some legitimate value-adding activity going on in the cryptocurrency and public coin offering space — not all of it is chancers and con artists. But the problem is when you have activity that either definitely is or might be of that nature, it undermines confidence."

The chairman of the US Securities and Exchange Commission (SEC) said earlier this month he is "yet to see an ICO that doesn't have a sufficient number of hallmarks of a security," suggesting the watchdog is minded to regulate the space like the stock market.

It is unclear whether exchanges Yobit and Bittrex are aware of "pump and dumps" occurring on their platforms. Yobit did not respond to a request for comment from Business Insider.

Asked for comment via its online form, Bittrex said: "Due to an unprecedented amount of growth in a relatively short amount of time we're experiencing a longer than usual wait time responding to and resolving your requests."

The message gave no specific comment on the points put to the company by BI. Bittrex said in its message that the company is "actively training new personnel and streamlining our support system to better handle the demand."

Bittrex advertises on its website that it was "one of the first companies to apply for New York's Bitlicense," a bitcoin trading license conceived by the New York Department of Financial Services (NYDFS). The NYDFS declined to comment on whether it was aware of pump and dump scams in the cryptocurrency market or whether it was investigating activity on Bittrex.

The SEC declined to comment. The SEC has previously warned that most coins issued through ICOs would likely qualify as securities, and thus be subject to the same regulations, and has warned investors to be wary of celebrity endorsements.

Mangrove Capital's Jackson told Business Insider: "Regulators will slowly move towards a solution, recognising the value in ICO for the long-term balanced against the need for a proportionate regulatory framework with significant penalties for avoidance or transgression."

He believes the market will move to self-regulate, with exchanges making sure participants "act in certain ways and with good procedures" in the same way as stock exchanges and the Lloyd's of London insurance market do.

The companies behind the coins BI witnessed being "pumped" — UBQ, Chill Coin, Magi Coin, and Indorse — could not be reached for comment. VCash did not respond in time for publication.

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• Traders "pump and dump" small cryptocurrencies to artificially inflate the price in the hope of making a quick profit at the expense of other investors.
• Business Insider observed five apparent "pump and dumps" of coins in just a week, coordinated using messaging app Telegram. See how they work here.
• The activity would be illegal in most markets but regulators have yet to get to grips with cryptocurrency sector, which has exploded in size to $200 billion in 2017.
• Those who monitor the secondary market say "this sort of activity is rife" and "a real problem."

LONDON — Cryptocurrency exchanges are rife with "pump and dump" scams that would be illegal in most markets and leave unsuspecting investors at risk of large losses, a Business Insider investigation has found.

Crypto traders are using the secure messaging app Telegram to orchestrate the scams. Their strategy is to suddenly inflate the price of a cryptocurrency by coordinating a few buyers to act at specific times.

Then, after the price rises, they attract other, unwitting investors to buy into the price momentum. The "pumpers" quickly sell the coin to make a profit. The coins often crash just minutes after the initial surge, leaving the second wave of investors with losses.

The same scam was most famously carried out in the stock market by the "Wolf of Wall Street" Jordan Belfort, the convicted securities fraudster whose exploits were turned into a film starring Leonardo DiCaprio.

Business Insider observed "pump and dumps" for the cryptocurrencies UBQ, VCash, Chill Coin, Magi Coin, and Indorse over the last two weeks alone. All the scams took place on either Las Vegas-based exchange Bittrex or Russian exchange Yobit.

Ben Yates, a senior associate at law firm RPC who has looked closely at the space, told Business Insider: "It's clear from even casual monitoring of the exchanges that this sort of activity is rife, particularly with altcoins with smaller circulation."

Cryptocurrency exchanges and markets are unregulated in most parts of the world and so these activities are not illegal. However, they highlight the risks associated with this new corner of finance, which has attracted huge amounts of capital in 2017 but is regarded as the "wild west" by critics.

"Pump and dump" schemes are illegal in government-regulated public stock markets, like the London and New York stock exchanges. Several securities lawyers BI spoke to argued that cryptocurrency exchanges should be regulated in the same way. The US Securities and Exchange Commission has said digital currencies are likely to fall under existing securities laws, but it has so far taken little enforcement action.

A $200 billion market

Cryptocurrencies have exploded in popularity in 2017 thanks to the success of "initial coin offerings" (ICOs), where startups issue new digital coins in exchange for real money used to fund their ideas. These coins can be traded on online exchanges, offering greater liquidity to investors in private companies.

Over $3 billion has been raised through ICOs since the start of the year and there are now more than 1,200 cryptocurrencies in circulation, according to CoinMarketCap.com. Celebrities such as Paris Hilton, boxer Floyd Mayweather, rapper The Game, and DJ Khaled have all endorsed ICOs, helping raise the profile of digital currencies.

While retail investors have rushed into the new market, many people have warned about the potential dangers of the emerging space.

Belfort himself, who served 22 months in prison for securities fraud and money laundering in 2000, said recently that ICOs are "a huge gigantic scam that’s going to blow up in so many people’s faces. It’s far worse than anything I was ever doing."

The European Securities and Markets Watchdog (ESMA) said on Monday that ICOs are "extremely risky and highly speculative investments" and "many of the coins or tokens... have no intrinsic value other than... to use them to access or use a service/product." Investors risk "the total loss of your investment", ESMA warned.

Despite similar warnings from other regulators, the total cryptocurrency market has ballooned to almost $200 billion this year. However, well-known coins such as bitcoin, ethereum, and bitcoin cash account for 80% of the market by value, meaning there are a huge number of low-value coins in circulation. Most have thin trading volumes, making them ripe for "pump and dump" manipulation, like penny stocks.

'Market manipulation 101'

"Pump and dump" scams involve people artificially boosting the price of an asset before offloading it to unsuspecting investors at the higher price.

Scammers first organise coordinated buying of a particular coin on a set exchange at a set time. The wave of demand pushes up the price.

The "pumpers" then use social media, online discussion forums, and message boards to attract new buyers. They generally argue that the price spike is evidence of a sustained rally. The "pumpers" then offload their coins to the new buyers who come into the market at a higher price. In most cases, this coordinated "dump" depresses the price of the coins back to their pre-pump levels.

It's unclear how frequently those involved in the "pump and dump" schemes profit from them, as there is no way to guarantee that any given pump will attract enough new buyers into the market.

Mati Greenspan, a senior market analyst at trading platform eToro who covers the cryptocurrency markets, told Business Insider: "Pump and dump schemes are a real problem. Besides the fact that it is illegal and unethical, the results can be incredibly unpredictable."

Regardless, such market manipulation would be illegal in most regulated markets whether or not the participants profited.

Ben Kingsley, a partner at law firm Slaughter & May who specialises in financial regulation, told Business Insider: "If you’re organising people to say ‘this is fantastic, I’m amazed everyone’s not piling into it’ as a way to stimulate demand with a view to then selling into a rising market, that’s market manipulation 101."

RPC's Yates said: "The sorts of coordinated pump and dump activities we are seeing on cryptocurrency markets would fall foul of numerous prohibitions were they carried out on stock markets – they are practically textbook examples of market manipulation and false trading, for example."

'PumpKing Community'

Those involved in the manipulation often make little effort to hide their activities. The "pumping" of coins is regularly referred to in Telegram groups where they are organised.

One group, "PumpKing Community," contained links to "Instructions for pump on Bittrex," as well as links to Facebook groups and Telegrams channels where "pumpers" could go to attract new investors to the market.

Channels like these attract participants to the scam with promises of wealth and quick profits. The PumpKing guide read: "Our PUMP will consist of 4 main stages, and we strongly recommend that you divide your deposit into 3 parts in order to get the maximum profit."

"PumpKing Community" is run by a Telegram user called Ton Montana, an apparent reference to the drug lord character of the film Scarface.

Telegram is heavily encrypted and users can hide behind aliases, meaning it is difficult to track those involved. Ton Montana did not respond to a Telegram message sent by Business Insider.

It is unclear how many people are involved in "pump and dump" scams but groups coordinating them have thousands of members. "PumpKing Community" has over 14,000 members.

Michael Jackson, a venture capitalist at Mangrove Capital who has studied the ICO market, told Business Insider: "I think it’s pretty common — not least because it’s a pretty natural thing to do. Many of the pump and dump guys probably don’t think there’s anything wrong and it is just natural PR."

He added: "Of course, in many regulated environments, such activities end the perpetrator in jail pretty quick."

An open secret

Knowledge of the "pump and dump" problem appears to be an open secret among many cryptocurrency traders. Several have written blog posts warning traders and new cryptocurrency investors to be wary.

Indian-based crypto trader Abdul Qadir Faridi wrote in a blog post in July that people "profit from these pump & dump activity but by indirectly stealing some new group members money or money of the people buying it for higher price after seeing the surge in price."

Brian Schuster wrote in a blog post: "Many users who bought at the peak (called bag holders) will often be left holding a cryptocurrency with declining value. These buyers are the true targets of these pump and dumps, the users who will pay 10x to the insiders for a cryptocurrency that is actually worthless. And once the price rises and falls, [it] will almost never return in value."

'Regulators will slowly move towards a solution'

"Pump and dumps" persist because cryptocurrency markets and exchanges are largely unregulated. Financial watchdogs around the world are only just getting to grips with initial coin offerings, with US and UK regulators cautioning investors on the risks of the market. China has banned both ICOs and exchanges.

Slaughter & May's Kingsley said he believes regulators "ought to" take the same approach to policing these scams in the token trading world as they do in relation to securities because "it creates the same harm."

"It causes unwitting investors to suffer a loss, and it undermines the integrity of those markets," he said.

"There is definitely some legitimate value-adding activity going on in the cryptocurrency and public coin offering space — not all of it is chancers and con artists. But the problem is when you have activity that either definitely is or might be of that nature, it undermines confidence."

The chairman of the US Securities and Exchange Commission (SEC) said earlier this month he is "yet to see an ICO that doesn't have a sufficient number of hallmarks of a security," suggesting the watchdog is minded to regulate the space like the stock market.

It is unclear whether exchanges Yobit and Bittrex are aware of "pump and dumps" occurring on their platforms. Yobit did not respond to a request for comment from Business Insider.

Asked for comment via its online form, Bittrex said: "Due to an unprecedented amount of growth in a relatively short amount of time we're experiencing a longer than usual wait time responding to and resolving your requests."

The message gave no specific comment on the points put to the company by BI. Bittrex said in its message that the company is "actively training new personnel and streamlining our support system to better handle the demand."

Bittrex advertises on its website that it was "one of the first companies to apply for New York's Bitlicense," a bitcoin trading license conceived by the New York Department of Financial Services (NYDFS). The NYDFS declined to comment on whether it was aware of pump and dump scams in the cryptocurrency market or whether it was investigating activity on Bittrex.

The SEC declined to comment. The SEC has previously warned that most coins issued through ICOs would likely qualify as securities, and thus be subject to the same regulations, and has warned investors to be wary of celebrity endorsements.

Mangrove Capital's Jackson told Business Insider: "Regulators will slowly move towards a solution, recognising the value in ICO for the long-term balanced against the need for a proportionate regulatory framework with significant penalties for avoidance or transgression."

He believes the market will move to self-regulate, with exchanges making sure participants "act in certain ways and with good procedures" in the same way as stock exchanges and the Lloyd's of London insurance market do.

The companies behind the coins BI witnessed being "pumped" — UBQ, Chill Coin, Magi Coin, and Indorse — could not be reached for comment. VCash did not respond in time for publication.

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Good morning! Here's what you need to know in markets on Tuesday.

1. Growth in Chinese industrial output, retail sales and fixed asset investment in October missed to the downside. According to China’s National Bureau of Statistics (NBS), industrial output grew by 6.2% from a year earlier, undershooting forecasts for an increase of 6.3%. It was also a sharp deceleration on the 6.6% increase reported in the 12 months to September.

2. David Davis has announced that Parliament will be given the right to vote down a final Brexit deal. The Brexit Secretary told MPs on Monday afternoon that any final deal reached with the EU at the end of Article 50 negotiations will be put to Parliament in the form of primary legislation. This means MPs will debate the final deal and then vote on whether to either accept or reject it.

3. Qualcomm has officially rebuffed Broadcom's acquisition offer, which would mark the biggest-ever deal in the tech industry. The company says it's worth more than Broadcom's $70-a-share offer. This is just a minor hiccup for Broadcom, which is expecting to now escalate a proxy battle by appealing directly to Qualcomm shareholders.

4. Global central banks would need to cut interest rates to unprecedented sub-zero rates to have any positive impact on growth and effectively shield their respective economies, according to research from the investment banking arm of Swiss giant UBS. "If the recession were to come today, we'd be in trouble, because there's basically no policy space," Arend Kapteyn, UBS' global head of economic research said at a briefing discussing the report on Monday.

5. Bitcoin, the red-hot digital currency, had a wild weekend and that appears to have translated into record-breaking trading volumes across the cryptocurrency market. Bitcoin crashed more than 25% from Wednesday's all-time high to a low of $5,617 Sunday. Bitcoin cash, the rival clone of bitcoin, witnessed an impressive rally that propelled the coin to a record-high of $2,500 early Sunday morning. The 24-hour trading volumes for cryptocurrencies reached a record high above $26 billion on Sunday, according to data site CoinMarketCap.com, the highest ever.

6. Apple will release three new iPhone models in 2018, the KGI Securities analyst Ming-Chi Kuo predicted in a note distributed to clients on Monday and seen by Business Insider. Kuo and his research team are well-known for accurately predicting details about upcoming Apple products, thanks to his connections in the Asian manufacturing industry.

7. Brexit pushed up IKEA's UK costs by 13% last year, the furniture giant has said. IKEA UK's annual results, released on Tuesday, show a big jump in costs due to the declining value of the pound after Britain's vote to leave the European Union in June 2016. CEO Gillian Drakeford said in a statement: "The Brexit vote has been on everyone’s lips and the devaluation of the pound has been a challenge for many businesses.

8. Amazon's Chinese partner, Beijing Sinnet Technology Co., said it would purchase Amazon's Chinese web services business for up to 2 billion yuan ($301 million), ending the U.S. firm's cloud-computing business in the country. Sinnet, which began operating the Amazon services in August 2016, said in a filing late on Monday the pending purchase would help the unit "comply with local laws and regulations and further improve service quality and security."

9. The EU approved economic sanctions, including an arms embargo, on Venezuela. The decision follows the US's plans to impose new sanctions on Venezuelan officials. 

10. North Korea complained to the UN after the US conducted joint military drills with South Korea. After the drills, the North Korean ambassador to the UN said the US "was running amok" and has created "the worst situation ever."

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• IKEA UK's revenue up 5.8% to £1.8 billion in 2017.
• Costs up 13% due to Brexit-driven collapse in the pound.
• UK CEO says IKEA will "continue to invest" in the UK.

LONDON — Brexit pushed up IKEA's UK costs by 13% last year, the furniture giant has said.

IKEA UK's annual results, released on Tuesday, show a big jump in costs due to the declining value of the pound after Britain's vote to leave the European Union in June 2016. The pound fell to a 31-year-low against the dollar the day after the referendum and a later dropped to a 7-year low against the euro.

CEO Gillian Drakeford said in a statement: "The Brexit vote has been on everyone’s lips and the devaluation of the Pound has been a challenge for many businesses.

"As we import a lot of our products from overseas, this increased our costs by 13.7%. To keep our range accessible and affordable for the many, we absorbed most of these costs, increasing prices by just 3.6%."

Drakeford said IKEA will "continue to invest" in the UK and has a "bold and positive" vision to "increase our share of the UK home furnishing market by 2027, to 15%."

"It won’t be easy, but we’re determined to bring our offer closer to more people," Drakeford said.

Drakeford told Business Insider about her plans to adapt IKEA to changing consumer habits in an interview last month.

IKEA UK's annual results show sales up 5.8% to £1.81 billion in the year to August 31, 2017. The best performing products were comfy chairs and sofas, where sales were up 11%, and kitchen utensils, which saw a 10% rise in sales. Online sales rose by 10%. IKEA UK declined to disclose its profits figures.

Drakeford said in a statement: "Despite a level of economic uncertainty, our brand is even more relevant and we
continue our efforts to bring affordable well-designed home furnishing solutions to the UK."

The results represent the sixth consecutive year of growth for IKEA in the UK. The Swedish retailer, which celebrated its 30th anniversary in the UK this year, had 57.2 million visits to its 20 stores across the UK last year and 175.8 million visits to its website.

Companies House filings on Monday show IKEA UK's auditors recently resigned. IKEA UK said in a statement to Business Insider: "We can confirm that IKEA Limited (IKEA UK) has appointed Ernst and Young as our new auditing partner, the same partner used by INGKA Group."

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• The next global financial crisis could force central banks to cut to unprecedented negative rates.
• UBS Investment Bank argues that economies including the UK, Denmark, and New Zealand could see rates as low as -5%.
• Bank says that rate cuts in next global downturn would be much more than "a few manageable bips."
• "If the recession were to come today, we'd be in trouble,"  Arend Kapteyn, global head of economic research said at a briefing.

LONDON — Global central banks would need to cut interest rates to unprecedented sub-zero rates to have any positive impact on growth and effectively shield their respective economies, according to research from the investment banking arm of Swiss giant UBS.

Writing in its Global Economic Outlook for 2018-2019, a 223-page epic report, the bank argues that global rates remain so low 10 years on from the crisis, that the next major global correction could leave central banks scrambling for ways to stimulate the economy.

Pointing to a chart from the outlook, the banks economists note that global central banks, if they needed to respond as robustly as they did during the 2007-08 crisis, would be forced to drop interest rates as low as -5%. That is quite simply something that has never happened before.

"One of the concerns right now is that we're in a very mature business cycle recovery, with a lot of people asking 'When is the next recession coming?'," Arend Kapteyn, UBS' global head of economic research said at a briefing on Monday.

"If the recession were to come today, we'd be in trouble, because there's basically no policy space," he continued.

And here is that chart (green triangles show where rates would need to go if the next crisis happens imminently):

"There's no space on the policy rates side, there is no space in terms of compressing long end yields, there is no space in terms being able to run public debt levels a lot above where we are now. That's a matter of concern.

"Although there's been an incredibly slow recovery, it's a taken a long time to get where we are, we have not yet recouped the policy space."

Here's what UBS has to say in the more complex language of the report (emphasis ours):

"It is worth asking whether from a policymaking perspective, governments and central banks would be able to respond, given how little normalization appears to have taken place since the last crisis."

"The third feature of the chart, the green triangles, shows where policy rates would need to go if the response to the next recession were similar to that in the last recession. Yes, you can argue that the last recession was particularly severe, and indeed we showed in the previous section that both output losses and the monetary policy responses were larger than in previous crisis episodes. But for illustrative purposes let's show where rates would need to go if policymakers wanted to react with the same fortitude to the next recession."

"All of DM and about half of EM would have to go seriously negative — not a few manageable bips but between -4% and -5%. Even a world slump half as deep as the GFC would push many countries hard against an effective lower bound."

During the last crisis, global central banks cut interest rates aggressively to protect consumers and lenders from the worst impacts of that crisis. Then, however, they were cutting from a much higher base.

The US Federal Reserve's base interest rate in late 2007, just as the crisis was beginning to crystallise, was 5.25%, compared to just 1.25% now. Similarly, the Bank of England cut from 5.75% to just 0.5%, where the rate currently sits.

In the 10 years or so since the crisis, rates have remained subdued as central banks try to eke out as much growth as possible from their recovering economies. Rates are starting to move a little higher — the Fed, for example, has increased its base rate four times in the last couple of years — but are still well below where the were pre-crisis.

Therefore, if central banks wanted to cut rates with that same aggression, they would be forced to not only go negative — as is already the case in the eurozone, Denmark, Sweden, and Switzerland — but to drop to even greater record lows.

"As long as the volatile components of GDP (investment) are lacklustre and the labour market is showing no sign of wage pressure or overheating, there is little need for the central bank to step on the brakes — one traditional way to see growth stall," UBS' team said.

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A deputy director from the Central Bank of Iran is reviewing the country's cryptocurrency policy amid a wider fintech push.

• Bitcoin, the red-hot digital currency known for its volatile price swings, was on a wild ride this weekend.
• Bitcoin crashed more than 25% from its all-time high of $7,721 set Wednesday to a low of $5,617 per coin on Sunday, according to data from cryptocurrency watcher CoinDesk. 
• Bitcoin cash, on the other hand, propelled to a record-high of $2,500 early Sunday morning.
• Trading volumes on Sunday peaked at over $26 billion, according to cryptocurrency data site CoinMarketCap.com.
• That's higher than the 5-day average trading volume for some US equity exchanges.

Bitcoin, the red-hot digital currency, had a wild weekend and that appears to have translated into record-breaking trading volumes across the cryptocurrency market.

Bitcoin crashed more than 25% from Wednesday's all-time high to a low of $5,617 Sunday. Bitcoin cash, the rival clone of bitcoin, witnessed an impressive rally that propelled the coin to a record-high of $2,500 early Sunday morning.

The 24-hour trading volumes for cryptocurrencies reached a record above $26 billion on Sunday, according to data site CoinMarketCap.com, the highest ever.

To put that in perspective, that is higher than the 5-day average trading volumes for two US stock exchanges. Both IEX, the upstart exchange based in New York, and the Chicago Stock Exchange averaged less than $10 billion in trading each day for the last five days, according to data by Cboe Global Markets.

IEX saw $7.8 billion worth of shares exchange on its venue, whereas CHX facilitated $3.1 billion in stock volumes.

New York Stock Exchange and Nasdaq, on the other hand, saw more than $50 billion worth of shares exchange daily on average over the last 5 trading days.

Still, the record cryptocurrency volumes over the weekend indicate the growing interest in the red-hot market, which until very recently has rarely witnessed daily trading volumes over $10 billion.

In a recent note to clients, Bank of America Merril Lynch said higher cryptocurrency volumes could present a $1.6 billion opportunity for Wall Street.

The figure is based on the assumption that cryptocurrency volumes end up at about 10% of current fiat currency trading volumes. Here's the bank:

"The FX market is highly liquid. For example, spot FX volumes were $1.65tr as of the most recent BIT Triennial survey in April 2016. If these volumes were to materialize, with the same relationship between spot market and futures, and the same revenue per contract, the revenue pool would be about $1.6bn."

Already, exchange giants Cboe and CME are looking to capitalize on the nascent space. They are preparing to launch bitcoin futures products in the near term.

Higher volumes, according to Bank of America, could help legitimize cryptocurrencies across Wall Street, which still remains widely skeptical of their credibility.

Many top Wall Streeters have derided bitcoin, for instance, as a vehicle used mainly by criminals.

In an interview with Bloomberg News, Larry Fink, the head of the largest investor in the world, BlackRock said the explosive growth of bitcoin points to "how much money laundering is being done in the world."

And JPMorgan CEO Jamie Dimon once said bitcoin was only useful for murderers and drug dealers.

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The post Anybits Launches, Provides Instant Altcoin Trades appeared first on CryptoCoinsNews.

• The old £10 note will cease to be legal tender at the end of March 1 2018.
• From then on, notes must be swapped at the Bank of England.
• New polymer £10 notes already account for 55% of all those in circulation.

LONDON — Britain's old £10 note will cease to be legal tender from the beginning of March next year, the Bank of England said in a statement on Tuesday.

The old note — which features famous evolutionary biologist Charles Darwin, and first came into circulation in 2000 — can no longer be used in shops or other financial transactions from the end of March 1 next year. After that, only the new polymer £10 will be legal for use.

It was already known that the Bank of England planned to withdraw the Darwin £10 during the spring of 2018, but no formal date had been provided until now.

The old note is being gradually withdrawn from circulation, and the new £10, which only entered circulation in September, already accounts for 55% of £10 notes currently in use.

While Brits will no longer be able to spend the old note after March 1, it will still be possible to exchange the notes at the Bank of England by swapping them in person at the bank's City of London headquarters.

The new £10 is made from a high tech polymer and features an image of the famous author Jane Austen, alongside a quote from her most famous work, Pride and Prejudice. 

According to the bank, the new note is the most technologically advanced it has ever made, including a series of new features, both visible and invisible that make it much more difficult to counterfeit the notes, which are printed on an advanced polymer made by the firm CCL Secure.

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