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Tag: gold price

Press Room: Glint in the news!

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Alternative currencies dominated much of the news this month. This week, Ethereum hit a new record high and broke the £2,000 barrier for the very first time. Alternatives are now firmly established amongst consumers as a viable store of value and means of exchange as we all look to take greater control over how we save and spend our money. Our commentary on the latest crypto milestone appeared in two articles in The Sun (here and here), Daily Express and Yahoo Finance.

Has the crackdown on crypto begun? One of the biggest stories this month was the creation of Central Bank Digital Currency (CBDC) taskforce by the Bank of England and HM Treasury. This is the strongest sign yet that the UK is looking to launch a CBDC and has potentially huge implications for our savings, purchasing power and privacy. Jason’s commentary appeared in some of the UK’s most influential newspapers including The TimesDaily Mail and Evening Standard as well as key financial websites including MSN, This is Money, MoneyWeek, Yahoo Finance, CryptoNews and UK Investor Magazine.

Earlier this month, the UK announced inflation continued to rise and is on track to meet the 2% target set by the Bank of England. The cash in our accounts already loses value by the day due to inflation outstripping the current miniscule interest rates – the potential introduction of negative interest rates would be catastrophic. Read our full commentary in the Daily Express.

Ever wondered how your savings have performed vs gold? We crunched the numbers and the value of gold holdings increased 41% over the last decade, whilst Cash ISAs have lost 2% in value over the same period. Our research and explanation behind cash’s fall in value appeared in Yahoo Finance and Fintech Zoom.

In last month’s Press Room we welcomed Emmanuel Ide to the leadership team, this key new hire appeared in Mondo VisioneFintech Insight and Fintech Inshorts over the last couple of weeks.

Press Room: Glint in the news!

  |   By  |  0 Comments

Alternative currencies dominated much of the news this month. This week, Ethereum hit a new record high and broke the £2,000 barrier for the very first time. Alternatives are now firmly established amongst consumers as a viable store of value and means of exchange as we all look to take greater control over how we save and spend our money. Our commentary on the latest crypto milestone appeared in The Sun and Yahoo Finance.

Has the crackdown on crypto begun? One of the biggest stories this month was the creation of Central Bank Digital Currency (CBDC) taskforce by the Bank of England and HM Treasury. This is the strongest sign yet that the UK is looking to launch a CBDC and has potentially huge implications for our savings, purchasing power and privacy. Jason’s commentary appeared in some of the UK’s most influential newspapers including The TimesDaily Mail and Evening Standard as well as key financial websites including MSN, This is Money, MoneyWeek, Yahoo Finance, CryptoNews and UK Investor Magazine.

Earlier this month, the UK announced inflation continued to rise and is on track to meet the 2% target set by the Bank of England. The cash in our accounts already loses value by the day due to inflation outstripping the current miniscule interest rates – the potential introduction of negative interest rates would be catastrophic. Read our full commentary in the Daily Express.

Ever wondered how your savings have performed vs gold? We crunched the numbers and the value of gold holdings increased 41% over the last decade, whilst Cash ISAs have lost 2% in value over the same period. Our research and explanation behind cash’s fall in value appeared in Yahoo Finance and Fintech Zoom.

In last month’s Press Room we welcomed Emmanuel Ide to the leadership team, this key new hire appeared in Mondo VisioneFintech Insight and Fintech Inshorts over the last couple of weeks.

Soapbox: Guard Against Fraud

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Perhaps one of the least expected by-products of the Covid-19 pandemic has been the surge in fraud, no matter where you live.

According to a PwC 2020 global fraud survey of more than 5,000 companies and individuals, 47% said they had experienced fraud in the past two years.

The bottom line of PwC’s findings is staggering – it concluded that in the previous two years $42 billion (more than £30 billion) was reported lost globally as a result of fraud.

In the UK, online fraudsters cheated consumers out of a record £479 million in 2020 according to UK Finance, the banking industry body. UK Finance found there was a 94% increase in “impersonation scams” – criminals posing as trusted organisations conning the public out of money.

Matters are scarcely any better in the US; financial fraud in the US rose by more than 104% in the first quarter of 2020 compared to the same period in 2019. The same source says that on the dark web a social security number – key for many kinds of financial transaction in the US – can be bought for little more than the price of a Starbucks’ latte. Stolen PII (Personally Identifiable Information) packages, which typically include the victim’s name, social security number, driver’s license number, passport number and email address, can be had for as little as $4 (under £3). There has never been a time when your personal data has been so valuable to you and so cheap for criminals.

Fraudsters have taken advantage of the explosion in online activity which has followed Covid; in the UK Office for National Statistics says the proportion of online sales in the UK has surged from 19% in February 2020 to 36% of the total by January this year.

Scammers have used outbreak of online activity as a cover for fake websites for vaccinations, or for false fines for breaching lockdown rules; the rise of online shopping has assisted criminals to target shoppers with fake messages about missed parcel deliveries, and to pose as software providers to target homeworkers.

Source: US Federal Trade Commission

 

UK Finance says that last year saw impersonation registering the “biggest increase of any scam type, almost doubling in 2020 compared to 2019”. Around half of last year’s total fraud loss was via payment cards, with 38% being from “authorised push payments”, i.e. victims of the fraud being manipulated into making real-time payments to fraudsters.

Know your enemy

UK Finance and the UK government have collaborated on a programme – called Take Five – to educate consumers about the nature of potential fraud and ways of mitigating risk. The risk is in a state of permanent flux, as development of the internet and artificial intelligence offer wider possibilities. According to Action Fraud, the UK’s National Fraud and Cyber Crime Reporting Centre, reports of scams relating to cryptocurrency investments went up by 57% (to more than 5,500) in 2020 and victims lost an estimated £113 million last year.

The UK’s banking industry introduced a voluntary code in May 2019 under which victims of authorised push payment scams could be reimbursed but, according to UK Finance this voluntary scheme “is not always working as intended, with a lack of consistency in consumer outcomes and a lack of clarity for signatories in how to implement it”. Caveat emptor is a sensible piece of advice, but criminals are using ever-sophisticated techniques. Banks are spending ever-bigger amounts on combatting fraud, but more can perhaps be done to educate their customers about the threats.

Security at Glint

At Glint, we take security very seriously indeed. We will continue to provide assistance and guidance to Glint clients in the light of new threats and vulnerabilities. We do our utmost to protect clients against fraudulent activity regarding their Glint accounts. If in doubt, clients can always block their Glint card via the Glint app. We always update clients about improvements in our security procedures that may affect them regarding payment services. Nevertheless, clients should immediately raise concerns regarding suspected fraudulent or malicious use of their Glint account.

To arm yourself against the criminal take these steps:

STOP: Taking a moment to stop and think before parting with your money or information could keep you safe.

CHALLENGE: Could an email or SMS be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.

PROTECT: Contact Glint immediately if you think you’ve fallen for a scam or have been the victim of fraud. Always report scams and fraud to Action Fraud in the UK and to the Federal Trade Commission (FTC) in the US.

We believe that gold is the only true form of reliable currency – and we want to make sure you hold onto your gold, so you can use it safely in your everyday life, to either help protect your savings against inflation, or to spend, anywhere in the world that accepts Mastercard®.

Soapbox: Archegos and more toxic bank lending

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A mammoth container vessel gets stuck in the Suez Canal and creates a bottleneck in global trade. Total trading losses from the grounding are calculated at $54 billion. Meanwhile, a ‘family wealth’ firm called Archegos – from the Greek, meaning ‘the one that takes the lead’ – blows up, leads to mammoth losses for banks, and jolts the stability of the global financial system. With another $10 billion down the drain.

A black swan event is something unpredictable, beyond what is normally expected. The grounding of the container vessel Ever Given in the Suez Canal was unpredictable and unexpected – but surely the implosion of Archegos was built-into the financial system, which seems to have learned nothing from the Great Financial Crash of 2007-09? Given the way that banks still operate, where massive leverages (using debt to invest) are commonplace, an Archegos event was just waiting to surface. What is worrying is that, thanks to banks having learnt little from the 2007-09 debacle, there may be more Archegos’ lurking.

Some recent notable ‘black swan events’: Source: Visual Capitalist

 

‘Family office’ sounds cozy

Archegos is (or maybe that should be ‘was’) a ‘family office’ that traditionally handles investment and wealth management for a wealthy family, generally with at least $100 million of investable assets. It started life in 2013. As of last year Archegos managed $10 billion.

That definition – ‘family office’ – is important.

After the Great Financial Crash of 2007-09 the US tried to tighten its scrutiny of the financial services industry. It passed into law the ‘Dodd-Frank Wall Street Reform and Consumer Protection Act’. This was intended to restore stability and resilience to the financial system. However, as the former Economist financial journalist David Shirreff said in his excellent short book, which called for a ‘banking revolution’ after the 2007-2009 systemic meltdown, “the Dodd-Frank Act of 2010…lost its edge in the course of implementation”.

Critically all ‘family offices’ are excluded from some of the criteria of the definition of ‘investment adviser’. The Private Investor Coalition or PIC, which was formed in 2009 and is an opaque “coalition of single family offices” proudly lists as one of its ‘accomplishments’ its successful lobbying in Washington D.C. to get family offices exempted from the US Securities and Exchange Commission (the SEC – America’s financial watchdog) registration as financial advisers.

Archegos was created by Bill Hwang, formerly of Tiger Asia Management, a multi-billion dollar hedge fund. In 2012, Hwang pleaded guilty on behalf of Tiger Asia Management to US charges of fraud. The charge was that through insider trading the firm gained $16 million of illicit profits in 2008 and 2009.

The primary holdings of Archegos were in total return swaps, an arcane financial instrument whereby the underlying stocks are held by banks – which meant that Archegos had no obligation to disclose its large holdings, which it would have had to do if it had dealt in regular stocks.

 

 

How does a man with a criminal record for insider trading get to manage a ‘family firm’? And is that ‘family firm’ definition a mere fiction, constructed so as to avoid SEC scrutiny?

There could be as many as 10,000 ‘family offices’ around the globe, with around $6 trillion of assets under management. The Investment Advisers Act of 1940 – from which ‘family offices’ are excluded – requires registration with the SEC. Had Archegos not been able to elude the SEC’s supervision, it would never have got off the ground – registration with the SEC fails if “the adviser or one of its employees has” committed a securities-related crime.

What has happened?

As recently as 2018, Bill Hwang was deemed by Goldman Sachs to be so risky that it refused to do business with him. That blacklisting didn’t last long. He soon became a valued (and valuable) client of Goldman Sachs, which was joined by the likes of Morgan Stanley, Credit Suisse, Nomura and other investment banks who formed an orderly line to lend him billions of dollars so that he could make his highly leveraged bets on the US media companies ViacomCBS and Discovery, and various Chinese companies such as the internet company Baidu.

Wall Street analysts had begun to feel uncomfortable about the speed of the stock price rise of some of these companies – ViacomCBS had surged past $100 from $14 and Discovery had climbed from $30 to $80 in a few months – and they started to downgrade them, triggering downward spirals in their price.

By Friday last week, the value of Archegos’ holdings had dropped and his banks started to make margin calls – asking Archegos to deposit additional money, or sell some of stock. Archegos started to sell and is thought to have sold shares worth $3 billion, triggering a wider sell-off and price falls, not just in the shares held by Archegos but also the banks that had extended credit to Archegos. The share price of Nomura and Credit Suisse fell by more than 10% on Monday this week.

As in 2007-09, bankers have again been seduced by greed and shown themselves unable to assess their own exposure to risk. In the words of the Financial Times: “Hwang was seen as a compelling prospective client by prime brokers, the potentially lucrative but risky division of investment banks that loans cash and securities to hedge funds and processes their trades. Concerns about his reputation and history were offset by a sense of the huge opportunities from dealing with him…The fee-hungry investment banks were ravenous for Hwang’s trading commissions and desperate to lend him money so he could magnify his bets”.

 

What will happen now?

It’s possible – but unlikely – that we could be headed for a repeat of the 2007-2009 years, when banks blew themselves up via complex derivatives based on their over-leveraging. Some are optimistically pointing to the fact that banks are much better capitalised today, so are more able to withstand this kind of shock. Yet it is thought that around 10 banks racked up more than $50 billion of credit exposure to Archegos. The biggest fear is that what happened at Archegos could be the start of a domino effect; another Japanese bank, Mizhuo, has started an internal investigation into possible losses resulting from its involvement. Two others – Nomura and Mitsubishi UFJ – have warned they face losses of (respectively) $2 billion and $270 million.

Scarcely a decade after the last financial implosion regulatory control and banks’ self-supervision has failed once more. David Shirreff wrote that “‘sophisticated finance’ has developed into a self-serving, self-congratulating culture”; a culture that clearly – from the evidence of the banks’ failure to scrutinise Archegos – remains a threat to the preservation of financial value.

And that’s why Glint was created in 2015 – to enable everyone to own gold, to use gold as money, regardless of how rich or poor. And to be free of the kind of banking culture that is too cavalier about risk. Placing money on deposit with banks is no longer as safe as it used to be. Placing money in gold with Glint does not carry those banking risks – the gold is physically allocated to you (meaning no-one else but you can touch it), and is held in a secure Swiss vault.