You can't stop a gold rush

Delivered on By Justin Pyvis

Good morning! Yesterday ScoMo repeated his belief that “Omicron is a gear change and we have to push through… The major stresses on the hospital system relate to workforce issues.”

He’s not wrong: staffing issues are causing mayhem worldwide, with many people currently either infected with Omicron or a close contact of someone that is.

In NSW alone there are more than 300,000 active cases, or about one in 27 people in the state. If we assume everyone has at least one close contact it means something like 7% of the population is currently in isolation (and it’s probably higher in healthcare).

The good news is that it will eventually pass, the bad news is that it’s going to be a rough few weeks!


Reading the tea leaves

Daily % change

AUD/USD

71.7

+0.1%

AUD/CNY

4.57

+0.1%

AU Bond

1.88

+0.5%

US Bond

1.78

+0.5%

ASX200

7,447

-0.1%

S&P500

4,647

-0.6%

Brent (bbl)

80.8

-1.3%

Gold (oz)

1,800

+0.2%

Iron ore (t)

125.4

-1.6%

Bitcoin

41,364

-2.9%

Ethereum

3,035

-5.3%

Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries. The S&P500 is a snapshot 30 minutes before close.

At the time of writing the US S&P500 (-0.6%) looked set to end another day in the red in what would be its worst losing streak since September. Tech stocks (-0.9%) were leading the decline yet again on expectations of a sooner-than-expected rate hike, having at one stage been down over 2% before gradually recovering.

Locally, the ASX200 shed 0.08% with the interest rate-sensitive tech sector (-0.96%) performing poorly again. The only sectors to finish in positive territory were so-called value stocks, such as utilities (+0.83%) along with energy (+1.11%) and materials (+1.36%).

Food for thought

Chances are you've heard of Web3, whether you asked for it or not.
Chances are you've heard of Web3, whether you asked for it or not. Source

Confused about crypto, or as it recently rebranded itself, Web3? Well you’re in luck – Moxie Marlinspike, the brains behind Signal Messenger (which if you don’t already use, you probably should), recently wrote an essay on his “first impressions”.

There’s no chance we can do it justice in this space, so do check it out, but here’s our best attempt at a summary.

It’s difficult to decentralise

In Web2 everything was eventually centralised into platforms run on large clusters of servers (Google, Facebook, Amazon, etc), whereas in Web3 the platforms are supposedly replaced with blockchains made up of a distributed network of peers. The problem is that in practice, “virtually all clients that wish to access it [blockchain] do so by simply trusting the outputs from these two companies [Alchemy or Infura] without any further verification”.

People want things to work and they don’t want to run their own servers (blockchain can’t live on your mobile device) and so competitive pressures mean some level of centralisation is inevitable… making Web3 look a lot like Web2.

The worst of both worlds

Moxie notes that Web3’s tendency towards centralisation has similarities to email. While anyone can run their own email server, “it doesn’t functionally matter for privacy, censorship resistance, or control – because GMail is going to be on the other end of every email that I send or receive anyway”.

The centralisation of Web3 around a couple of platforms creates the “worst of both worlds: centralised control, but still distributed enough to become mired in time”.

You can’t stop a goldrush

It would be easy to build a Web2 app selling images on the internet but the reason NFTs have taken off on Web3 is “because this is a gold rush… People have made money through cryptocurrency speculation, those people are interested in spending that cryptocurrency in ways that support their investment while offering additional returns”.

If that money continues to be funnelled back into crypto, “it could continue to accelerate forever (regardless of whether or not it’s just web2x2)”. However, if people start to withdraw then “this will be a blip”.

Moxie leans towards the former, although worries about Web3 simply becoming Web2x2, which he describes as “web2 but with even less privacy”.

Read the whole thing here.


Bits and bytes

🎾 “Novax” Djokovic won his court case against the Australian government and will be free to play in the Australian Open unless the Immigration Minister (who is no doubt awaiting last night’s polling results before making a call) uses his discretionary power to deport him. In giving his ruling the judge lashed the government for its handling of the case, adding that he was “somewhat agitated… what more could this man have done?”

💉 The Victorian government mandated COVID-19 booster shots for workers in aged care, disability, emergency services, correctional, quarantine accommodation and food distribution. It also banned indoor dancing.

🛂 WA Premier Mark McGowan said “life is about to get very difficult for” the unvaccinated, as his government prepares to expand vaccine passports to “a wide range of licensed events and venues, restaurants, as well as riskier environments like indoor fitness centres”.

✈️ Virgin Australia cut 25% of its flight capacity for the rest of January and February due to reduced demand and staff being required to isolate due to COVID-19 protocols.

⛳ Australia’s Cameron Smith won the opening US PGA Tour event of the year after scoring a record 34 under. The previous record was set by Ernie Els at 31 under in 2003.

💩 “Norweigan’s enlisted will now have to return their used underwear – as well as bras and socks – after their service is done due to supply shortages.”

🍟 The latest chip shortage: “Potatoes… [are] becoming unevenly available in some countries and fast-food chains because of… supply chain disruptions wrought by the coronavirus pandemic and extreme weather.”

👃 UK supermarket Morrisons is scrapping ‘use by’ dates on its milk, replacing them with a ‘best before’ and encouraging people to use “the sniff test”.

🌟 Scientists observed a red supergiant star exploding into a supernova for the first time ever. The star was some 120 million light-years away from Earth and about 10 times more massive than our own Sun.

⚰️ Comedian Bob Saget died suddenly aged 65 while staying at the Ritz-Carlton in Orlando. No cause of death has been reported and authorities said they found “no signs” of drug use or foul play.

🔌 A Tesla owner claims to be making up to $US800 a month by using his car to power a cryptocurrency mining rig (he has access to the company’s free lifetime Supercharging program so does not pay to recharge).

🔫 Kazakhstan’s President Kassym-Jomart Tokayev said the violence last week was due to an attempted coup d’etat, triggered by rising fuel prices. Troops from Russia and other countries are currently in Kazakhstan to “restore order”.