Dec 27, 2018

Axios AM

☕ Good Thursday morning. It was a treat to meet Axios AM reader Myra Adams of Fort Lauderdale, who came over to say hi as I tapped away on my MacBook Air in the San Francisco airport, during a late-night layover between Portland, Ore., and Miami.

  • Situational awareness ... Shutdown, Day 6: "Congressional lawmakers see no clear end in sight." (WashPost)
1 big thing: Cryptocurrency dreams go bust

Illustration: Aïda Amer/Axios

This was the year that Bitcoin and most other blockchain currencies turned out to be the new tulip — a mania that led otherwise sensible people to suspend their better judgement and become poorer by piling in, Axios future editor Steve Levine and Silicon Valley reporter Kia Kokalitcheva write:

  • That psychology has now changed decisively: Bitcoin’s price shot up to record prices artificially, only to plummet about 70% this year.
  • "[O]f 573 digital coins launched since 2017," according to The Wall Street Journal, "89% are trading at a loss compared with their offering price and worth a total of about $2.1 billion — $8.4 billion less than the $10.5 billion initially invested."
  • Similar fads pop up every few years — always accompanied by the phrase, "this time is different," until it ends in tears.

For cryptocurrencies, 2018 was the correction to 2017, which was basically a big free for all. Then, regulators and reality came calling.

  • Initial coin offerings (ICOs), it turns out, are not a magical and regulation-free fundraising mechanism: A bad white paper does not a viable digital token make.
  • "The SEC and state regulators have brought more than 90 crypto cases over the past two years," but have only managed to claw back about $36 million for duped investors, The Journal reports (subscription).
  • "One of the attractions of digital currency is its anonymity. That ... can also make it hard for investigators to trace funds."

Predictions for next year: more regulatory guidance, and more realistic applications of the tech.

  • Look for other uses of blockchain technology to flourish. One big possibility is supply chain — tracking goods from one point to another.
  • Commodity traders are also eyeing the technology in their quest for an edge.
2. 💰 Record rally gets bull blood racing
Trader Peter Tuchman slaps a high five before the closing bell at the New York Stock Exchange yesterday. (Richard Drew/AP)

For investors starved of good news all month, yesterday brought a jolly old Santa rally:

  • The Dow Jones Industrial Average had its biggest single-day point gain ever, surging "more than 1,000 points for the first time in a single session," per The Wall Street Journal (subscription).
  • "The blue-chip index climbed 1086.25 points, or 5%, to 22878.45, its largest one-day percentage gain since March 2009."
  • "All 30 stocks in the Dow industrials notched gains, as did each of the 11 sectors in the broader S&P."

What's next: Tech stocks (Facebook, Amazon, Apple, Netflix and Google-parent Alphabet — "FAANG") have been "unfairly" hammered, and are key to lifting overall sentiment on Wall Street in 2019, per TD Ameritrade Asia. (CNBC)

Be smart ... Everyone on Wall Street knows that bear markets can serve up short-lived rallies, Bloomberg points out:

  • In eight previous bear markets, "the S&P 500 has experienced rallies of greater than 2.5 percent more than 120 times."
  • "From the collapse of Lehman to the financial crisis bottom in March 2009, the S&P 500 rallied more than 4 percent on 13 different occasions."
3. Dems plan to probe deaths of migrant kids

"The deaths of two migrant children in just over two weeks raised strong new doubts ... about the ability of U.S. border authorities to care for the thousands of minors arriving as part of a surge of families trying to enter the country," AP's Nomaan Merchant reports from Houston:

  • "An 8-year-old boy identified by Guatemalan officials as Felipe Gomez Alonzo died in U.S. custody at a New Mexico hospital on Christmas Eve after suffering a cough, vomiting and fever."
  • "The cause is under investigation, as is the death Dec. 8 of another Guatemalan child, 7-year-old Jakelin Caal."

The big picture: "The U.S. government's system for detaining migrants crossing the border is severely overtaxed."

  • Homeland Security Secretary Kirstjen Nielsen said in a statement: "[T]he death of a child in government custody is deeply concerning and heartbreaking. ... I will be traveling to the border later this week to see first-hand the medical screenings and conditions at Border Patrol stations."

House Democrats plan to take up the issue after they take control Jan. 3:

  • "There is a real failure here that we all need to reckon with," said incoming Rep. Veronica Escobar, a Democrat elected last month to represent El Paso in Congress. "We need to know how many other Jakelins and Felipes there have been."
  • Rep. Henry Cuellar, a Texas Democrat who sits on a key subcommittee overseeing border funding, said he has pushed to fund more alternatives to detention such as ankle monitors, which he said could have been issued to Felipe's father.

P.S. "The Trump administration ... will keep open through early 2019 a tent city in [Tornillo,] Texas that now holds more than 2,000 migrant teenagers, and also will increase the number of beds at another temporary detention center for children in [Homestead,] Florida." (AP)

Bonus: Pics du jour
Saul Loeb/AFP/Getty Images

President Trump and First Lady Melania Trump arrive to speak to members of the U.S. military during an unannounced trip to al-Asad Air Base, about 100 miles west of Baghdad, Iraq — his first visit as president to troops in harm's way.

  • "Trump spent a little more than three hours in Iraq," Reuters' Steve Holland reports. "On his way home, he stopped for about an hour and a half at Ramstein Air Base in Germany, where he shook hands and posed for pictures with some of the hundreds of troops lined up inside a hangar. "
  • Air Force One landed at Andrews at 5:13 a.m.
White House photo by Shealah Craighead

Flashback: Read my 5,000-world pool report from President George W. Bush's surprise trip to Iraq on Thanksgiving Day, 2003, when I was covering the White House for The Washington Post.

  • Citing security, the White House imposed a news blackout that lasted as Bush flew from his ranch in Texas to Andrews Air Force Base, then to Iraq. He greeted troops and was airborne again before news broke back in the U.S.
  • Richard Keil, then of Bloomberg News, leaned across the aisle of Air Force One, shoved aside his iPod headset and grinned as he said: "The president of the United States is AWOL, and we're with him — the ultimate road trip."
Courtesy N.Y. Post
4. Life in America: School lockdowns surge

"More than 4.1 million students endured [a] lockdown [last] school year, ... according to a first-of-its-kind analysis by The Washington Post that included a review of 20,000 news stories and data from school districts in 31 of the country’s largest cities," the WashPost's Steven Rich and John Woodrow Cox write:

  • "[L]ockdowns ... have become a hallmark of American education and a byproduct of this country’s inability to curb its gun violence epidemic."
  • "[O]n a typical day last school year, at least 16 campuses locked down, with nine related to gun violence or the threat of it. The Post’s final tally of lockdowns exceeded 6,200."

Why it matters: "Lockdowns save lives during real attacks, but even when there is no gunman stalking the hallways, the procedures can inflict immense psychological damage on children convinced that they’re in danger."

  • "The sudden order to hunker down can overwhelm students, who have wept and soiled themselves, written farewell messages to family members and wills explaining what should be done with their bicycles and PlayStations."
5. Bad headlines for Trump = ratings slump for Hannity

"While Fox News Channel’s Sean Hannity will end 2018 as cable news’ most popular personality for the second year in a row, he’s been slumping in the ratings since the midterm elections and ominous stories related to Special Counsel Robert Mueller’s investigation," AP's David Bauder writes:

  • Hannity's show "averaged 2.76 million viewers since the election through Dec. 17, down 19 percent compared to the previous month," per Nielsen.
  • "Among the 25-to-54-year-old demo most coveted by advertisers, he’s down 30 percent."

"Competitors Rachel Maddow on MSNBC and Chris Cuomo on CNN are up in each measurement":

  • "Maddow has been beating Hannity outright in December, a turnaround from October. During that month, when Supreme Court Justice Brett Kavanaugh’s confirmation drama dominated the news, Hannity’s audience routinely exceeded Maddow’s by about a million people each night."
  • "Fox’s prime-time schedule as a whole, which also includes Tucker Carlson and Laura Ingraham, has been down 20 percent since the election."

The big picture: "[T]he Trump administration continues to be glory days for cable news. Fox News Channel is the top-rated network for all of basic cable for the third year in a row, topping ESPN, and will finish with the highest-rated prime-time schedule in its history. "

  • "MSNBC is third overall in basic cable, and is also on pace to finish with the biggest audience in its history."
  • "CNN will finish 11th, and is likely to finish with its third-best year ever."
6. 1 trek thing
Colin O'Brady of Portland., Ore., poses while traveling across Antarctica yesterday. (Colin O'Brady via AP)

Oregon man first to solo across Antarctica unaided ... "The final miles of a nearly two-month race across Antarctica ... ended [yesterday] with a sprint to the finish," reports the N.Y. Times' Adam Skolnick, who tracked the journey.

  • "In what could go down as one of the great feats in polar history, the American Colin O’Brady, 33, covered the final 77.54 miles of the 921-mile journey across Antarctica in one final sleepless, 32-hour burst, becoming the first person ever to traverse Antarctica from coast to coast solo, unsupported and unaided by wind."
  • "O’Brady’s transcontinental feat, which took him an actual total of 932 miles with some zigzags along the course, was remarkable enough; but to complete the final 77.54 miles in one shot — essentially tacking an ultramarathon onto the 53rd day of an already unprecedented journey — set an even higher bar for anyone who tries to surpass it."

See the N.Y. Times' tracker map.