I don’t often share Peoplenomics.com content on the UrbanSurvival side of thing, but sometimes when we get it right…and timely…as BTC’s crashed to under $3,000 each this morning before the “buy the dippers” came in…
We also said: “Meantime, we’re not alone in our assessment of Bitcoin. “Jamie Dimon Slams Bitcoin as a ‘Fraud’ – Bloomberg Jamie Dimon Slams Bitcoin as a ‘Fraud’. He is also reported to have said that if he was looking to hire someone, he wouldn’t hire someone who believes in Bitcoins because ‘they’re stupid.’
An assessment that we heartily agree with and, for the record, I hold that despite what the charlatans and poor prognosticators claim, it STILL makes more sense to own some tiny, fractional share of a company than to place faith and savings in made-up money.
This is not to say that this is the end of the line for the crypto-currency promoters. I know are lots of people who “foretell the future” and have been promoting BTCs since they were a under a buck.
Sometimes, though, you can skip the herd’s group-think, though by asking simple economic questions.
Like “What is the utility value of a BTC?
“Depending on which theory of utility is used, the interpretation of marginal utility can be meaningful or not. Economists have commonly described utility as if it were quantifiable, that is, as if different levels of utility could be compared along a numerical scale. This has affected the development and reception of theories of marginal utility. Quantitative concepts of utility allow familiar arithmetic operations, and further assumptions of continuity and differentiability greatly increase tractability.
Contemporary mainstream economic theory frequently defers metaphysical questions, and merely notes or assumes that preference structures conforming to certain rules can be usefully proxied by associating goods, services, or their uses with quantities, and defines “utility” as such a quantification.”
Please note that classical economics (I like “old school”) is very pragmatic. Yet the modern “revisionist” view says there is utility in being a proxy (substitute) for value.
Which is not quite true.
In order to be a storehouse of value there is the little matter of durability. Good money (of any sort) must be durable, convertible to goods of value, transportable, divisible, and some other things that slip this old addled brain.
You do understand that the lack of divisibility is what we don’t have diamond-based money, right? A 6 carat rock has plenty of bling value. But smash it with a hammer often enough, and Oilman2 will buy it for fractions of pennies on the dollar to coat his latest oil drilling bit. That industrial app will be all that’s left of bling, you see.
In an internal combustion-based world? Oil is a fine storehouse of value. Gold and silver meet some of our tests, too.
One solar flare, one “grid hard down” as my .mil friends call it…and BTCs are gone.
If there’s a soft underbelly to stocks (and there really IS) it is exactly this same notion: That a fraction ownership position represented by a share of stock is only notional and electronic because everyone is trusting the Depository Trust Corp. Ever try to get paper copies of stock shares, lately?
Back in the day, the stock market was more durable. My first investment was in a convertible subordinated debenture in a company stock symbol EMF, long since vanished. (Symbol is presently Templeton Emerging Markets Fund, but in not way related. This was in 1970…)
But back in the day, when bought as “units” I got both shares and a debenture which entitled me to future shares at a favorable price.
Speaking of “old school” we don’t see debentures as being popular, anymore:
“A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company’s capital structure, it does not become share capital. Senior debentures get paid before subordinate debentures, and there are varying rates of risk and payoff for these categories.”
And by “convertible” it means I could convert the debenture to stock, at a low price ($4-bucks a share if I recall) when the current market price was higher. I sold and converted then sold when the price was $7.35.
The disappearance of debentures, as part of the art of finance, is symptomatic of many things. First is that computer systems like massive (but essentially simple) problems.
It’s easy to change the social security number from George’s to someone else’s for xx,xxx,xxx shares of something. But think about the algorithm design for: George buys xx,xxx units of a convertible subordinated debenture, then sells off the shares and then hangs on to the debenture for a year or two, then converts to shares and… (See the problem is mark-to-market for the debentures at time of exercise…where is a computer going to get that?)
With real paper, it works. With real paper, I can own/control the shares and I’m a real fractional owner. It still works with computers, too, but it becomes a big-ass database and that means a lot more potential for troubles.
Today? Oh, sure, I have 200,000 shares of a little tech stock down in Austin (still in the “pinks” lol), but since I don’t have any paper (except for the trade slip from the online trading outfit) where is my proof that as a shareholder I would have “standing” as a fractional owner of a company?
In today’s world we have just “made up the answers of convenience.” We call it all kinds of gobbledygook like “Modern Monetary Theory” and brand those who question each asymptote as cretins, throw-backs, conspiracy theorists, and worse.
Yet as another weekend appears at “Miller time” tonight, we have to wonder how many virtual financial virgins are being sacrificed on the Alter of Free Lunch with the BitCrash?
I have warned time, and time-again it was coming. I thought the drop to below $3,000 would take longer (October November based on the slope of the curve). But we see that in today’s world of skeptics and high-speed knowledge that the angle of price increases is lower and the speed of declines is faster.
Yet, as an angle, people are still wired pretty much the same.
Our Economics Concept du Jour looks like this:
Gosh, are we having fun yet, or not?
Stepping over to the white board (and taking a huff of the marker pen), Professor Ure continues:
“We hope that unlike Katrina-Rita, we do not see a market decline of 5% in the next few months, but what that would mean is a decline to 2,400 on the S&P can not be ruled out…”
And thanks to the crazy professors brainamp.xls Elliott wave tool, tomorrow’s Peoplenomics becomes a short, almost self-writing exercise today. Because remember, kiddies, whatever happens this fall on the downside may be only an A wave. The location and magnitude of the B wave rally would be instructive in that it will point to the magnitude of our capital gains problems that will result from all the money made in the C wave downside.
Or, so we hope, lol.
No denying one thing: Why the cast of clowns was selling Bitcoins, once again, UrbanSurvival was dead-to-nuts right and our long-term view was correct.
The rest of the ignorant financial media…the ones who have been pimping Bitcoin? Not a peep. 40% drop inside two weeks and it’s like farts in church. No one talks about them. UREly amazing.
Hot off the…
“Advance estimates of U.S. retail and food services sales for August 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $474.8 billion, a decrease of 0.2 percent (±0.5 percent)* from the previous month, and 3.2 percent (±0.7 percent) above August 2016.
Total sales for the June 2017 through August 2017 period were up 3.2 percent (±0.7 percent) from the same period a year ago. The June 2017 to July 2017 percent change was revised from up 0.6 percent (±0.5 percent) to up 0.3 percent (±0.1 percent).
Retail trade sales were down 0.3 percent (±0.5 percent)* from July 2017, and up 3.3 percent (±0.7 percent) from last year. Nonstore Retailers were up 8.4 percent (±1.6 percent) from August 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 7.5 percent (±1.9 percent) from last year. ”
And if you don’t have an auto graphing plug-in for your cerebral cortex yet:
We expect the cerebral auto graphing module will be available with the iPhone 31 when it’s released for $42-million each in 2029. Line forms over that way…
Terrorism is Back
Tubed in London.
But let’s turn it into a Trump bash, shall we? Trump’s Tweet Condemning the ‘Loser Terrorist’ in the London Attack Is Causing Some Confusion.
Jeez…next we will have shocking revelations about how Trump brushes his teeth…
From BBC Global News
Doesn’t impact anyone we know, does it? British man dies in Sri Lanka crocodile attack.
Almost as life-changing as Fox’s Ancient toys unearthed.
Still too many channels, too much “news capacity” for actual deliverables.
Where my cynical pills…need another handful.
North Korea fires missile. Japan learns duck & cover.
NYT on it with North Korea’s Threat Pushes Japan to Reassess Its Might and Rights.