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What’s a Crypto Worth?

I’ll be straight with you. When it comes to Bitcoin, I got nothing. For months, I’ve watched Bitcoin explode higher. And philosophically, there’s a lot I like about cryptocurrencies. I like the idea of a viable currency that exists outside of government control and outside of the banking system. I like the fact that there is no central bank like the Federal Reserve to debase the currency, inflating away its value over time. And I like that Bitcoin and other cryptos – at least in theory – are anonymous. But, back in 1998, I also liked the internet. That didn’t […]

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Pay Attention To What’s Beneath The Surface

The great problem with economists – most people for that matter – is that they don’t look under the hood. It wasn’t the tip of the iceberg that ripped a hole in the Titanic’s hull, sinking the unsinkable. It was the mountain of ice beneath the water. It wasn’t housing prices alone that raised the property market to the ground in 2007/08. It was the foundation of bad loans given to anyone with a pulse. It’s not the one cockroach you see scurrying along the baseboards in your kitchen that you should worry about… Neil deGrasse Tyson, the popular astrophysicist, […]

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What’s Really Driving Apple?

Narratives are a fundamental part of our human existence. They’re the key to how we process information. Just as the mind instinctively searches for visual patterns in nature, it also seeks to derive patterns and meaning from information flow. We create stories to help us understand. We see this in financial markets all the time, though it’s not always a good thing. You’ve heard the talking heads on CNBC. They hop on camera and try to attribute every little market gyration to one news story or another. This type of narrative creation doesn’t make much sense. Most of the day-to-day […]

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What’s Next? Will Quantitative Easing Demolish Stock Indicators?

In late 2008, we knew we had a problem. For years we had used the Economic Cycle Research Institute (ECRI) for predicting recessions before they occurred. This leading indicator had a much better track record than the more traditional ones. But after QE started in November of that year, this indicator started to falter. The institute had predicted a recession in early 2011, but as QE dragged on, it just didn’t happen. ECRI wasn’t the only one. The Consumer Metrics Institute’s (CMI) Daily Growth Index also started to fail from early 2010 forward. I remember introducing Rick Davis, CMI’s founder, […]

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