Topic: Financial Markets

Crisis, Economic Education, Financial Markets

How Did the Life Insurance Industry Survive the Pandemic?

– March 6, 2021

“It is of course a good thing that life insurers did not exacerbate the financial stresses brought on by the pandemic or its mitigation policies, which did indeed turn out to be the worst since the New Deal as I suggested in April 2020. ‘Tis a shame that nobody followed my suggestion, made that same month, to use life insurance data to provide an independent assessment of the pandemic’s progress.” ~ Robert E. Wright

Central Banking, Financial Markets

In Finance, Slow is Good

– March 3, 2021

“What the central bank RTGS/LSM two-step teaches us is that we need a good balance between fast and slow. Sure, real-time settlement is a nice feature. But let’s also have delayed settlement. If brokerages have a choice to use some combination of two-day and real-time settlement, we may arrive at a socially optimal stock settlement rate.” ~ J.P. Koning

Cryptocurrency, Economic Education, Financial Markets

Mastercard’s Crypto Ruse

– March 3, 2021

“With more corporate powerhouses supporting cryptocurrencies by the month, it appears that crypto is here to stay. Whether those cryptos are the ones currently popular or this announcement by Mastercard acts to initiate a path dependent development process is presently unknown and unknowable. Other recent initiatives by the massive processing firm suggest a focus that may thwart, rather than promote, the expansion of genuine, public cryptocurrency use.” ~ Peter C. Earle

Central Banking, Cryptocurrency, Financial Markets

Escape Hatches: Migration, Bitcoin, and the Ability to Get Out

– February 27, 2021

“Keep more mobile assets; have larger buffers, financial and physical; instead of a large house in a nice suburb, perhaps aim for a smaller home coupled with a condo or house in a different jurisdiction? Don’t put all your financial eggs in one portfolio – keep some gold and some bitcoin; keep healthy; update your survivability skills. Ensure that your escape hatches remain open.” ~ Joakim Book

Economic Trends, Financial Markets, Fiscal Policy

Are the Conditions Right for Another Commodity Super-Cycle?

– February 26, 2021

“With unemployment rates still elevated and much of the global economy in some form of lockdown, it is hard to imagine the conditions for an economic boom, especially one that will see wage increases, but the size and scale of the global monetary and fiscal response to the pandemic is unprecedented. It creates the conditions for a continued appreciation of a wide range of essential commodity prices as the pandemic ends and demand rebounds.” ~ Colin Lloyd

Books, Economic History, Financial Markets

When Financial Markets Bubble, There’s Something for Everyone

– February 24, 2021

“Whenever something seems bubbly, accusations of tulips and South Sea bubbles are never far away – even though the proportion of people who could actually explain those iconic episodes of our financial past is frighteningly close to zero. Levenson’s account of the South Sea Bubble will not, I daresay, be the last time historians find reason to look at this grand event of our financial past.” ~ Joakim Book

Cryptocurrency, Financial Markets, Regulation

Accountants Have Learned To Live With Crypto

– February 19, 2021

“Accounting professionals need to learn to live and work with crypto, and standard setters need to be proactive in the creation of crypto-specific standards. Applying standards developed for the 20th century economy to 21st crypto assets is already causing issues, and should be rectified to avoid wider market disruptions.” ~ Sean Stein Smith

Financial Markets, Video

A Suddenly Soaring Stock Price Might Be Bad for Business (Video)

– February 18, 2021

“I went on Cheddar TV to discuss the risk to companies from the wild speculative buying inspired by investor chatrooms. Eventually the fundamentals have to catch up else the highs are unsustainable.” ~ Edward Stringham

Central Banking, Financial Markets, Inflation

Do These Money Supply Charts Portend Hyperinflation?

– February 13, 2021

“Financial markets indicators suggest that high inflation is not likely. Even with a very large balance sheet, the Fed has proven that it can control inflation by paying high rates of interest on bank reserves. Whether Fed officials choose to do so is the open question.” ~ Thomas L. Hogan

Economic History, Financial Markets, Government

Presidential Impeachment and US Equity Markets

– February 10, 2021

“The gradual pace of what is fundamentally a political (as opposed to legal) action tends to result in dampened, rather than heightened, volatility. And nearly as soon as any latent uncertainties are ironed out, broader economic trends resume driving the direction of financial markets. A more profound degree of political upheaval, with a more sudden onset, is required to throttle the stock markets.” ~ Peter C. Earle

Central Banking, Financial Markets, Monetary Policy

Will the Fed’s “Feelgood” Medicine Cause an Economic Collapse?

– February 9, 2021

“The promise of cheap money leading to perpetual asset price sunshine may seem like a reality today. Tomorrow the consequences will be like Dr. Feelgood’s needles. To avoid the worst, markets—not politicians or bureaucrats, must be free to uncover the real cost of borrowing money.” ~ Barry Brownstein

Economic Education, Financial Markets, Monetary Policy

Monetary Policy is Pushing Americans, Kicking and Screaming, Up the Risk Curve

– February 6, 2021

“Gamestop is only a symptom. The size and frequency of monetary policy interventions is pushing investors further and further up the risk curve.” ~ Peter C. Earle