21–30 of 138 posts
Earlier quoted context omitted.
When an asset class increases in value for a long enough period of time there is no shortage of explanations for why it's different this time. Real estate, commodities, tech companies, it makes no difference, It's always the same.
Real estate is an outlier in your examples due to there being limited supply and people need shelter.
Earlier quoted context omitted.
When an asset class increases in value for a long enough period of time there is no shortage of explanations for why it's different this time. Real estate, commodities, tech companies, it makes no difference, It's always the same.
Real estate is an outlier in your examples due to there being limited supply and people need shelter.
> A cryptocurrency lender backed by Peter Thiel and Coinbase Global Inc. suspended withdrawals, trading and deposits on its platform, citing volatile market conditions and financial difficulties facing key business partners. > The platform, Vauld, said Monday that it froze the operations after users pulled almost $200 million over the last three weeks. A sharp decline in cryptocurrency prices that began with the coll…
Matt Levine always likes to say that cryptocurrencies are relearning hundreds of years of financial lessons in just a few short years. He describes the current crypto crisis as a repeat of the 2008 financial crisis. Every single problem that cryptocurrencies face are extremely well known and studied phenomena in traditional economics. It is all very predictable.
"The panic might have deepened if not for the intervention of financier J. P. Morgan, who pledged large sums of his own money and convinced other New York bankers to do the same to shore up the banking system. That highlighted the limitations of the US Independent Treasury system, which managed the nation's money supply but was unable to inject sufficient liquidity back into the market."
This led to the creation of the Federal Reserve System.
Earlier quoted context omitted.
When an asset class increases in value for a long enough period of time there is no shortage of explanations for why it's different this time. Real estate, commodities, tech companies, it makes no difference, It's always the same.
Real estate is an outlier in your examples due to there being limited supply and people need shelter.
Just like a commodity.
Earlier quoted context omitted.
When an asset class increases in value for a long enough period of time there is no shortage of explanations for why it's different this time. Real estate, commodities, tech companies, it makes no difference, It's always the same.
Real estate is an outlier in your examples due to there being limited supply and people need shelter.
People need lots of things. The principal constraints on real estate are political. (The entire concept of real estate is a social construct.) Not physical space.
Earlier quoted context omitted.
When an asset class increases in value for a long enough period of time there is no shortage of explanations for why it's different this time. Real estate, commodities, tech companies, it makes no difference, It's always the same.
Real estate is an outlier in your examples due to there being limited supply and people need shelter.
> A cryptocurrency lender backed by Peter Thiel and Coinbase Global Inc. suspended withdrawals, trading and deposits on its platform, citing volatile market conditions and financial difficulties facing key business partners. > The platform, Vauld, said Monday that it froze the operations after users pulled almost $200 million over the last three weeks. A sharp decline in cryptocurrency prices that began with the coll…
Matt Levine always likes to say that cryptocurrencies are relearning hundreds of years of financial lessons in just a few short years. He describes the current crypto crisis as a repeat of the 2008 financial crisis. Every single problem that cryptocurrencies face are extremely well known and studied phenomena in traditional economics. It is all very predictable.
> A cryptocurrency lender backed by Peter Thiel and Coinbase Global Inc. suspended withdrawals, trading and deposits on its platform, citing volatile market conditions and financial difficulties facing key business partners. > The platform, Vauld, said Monday that it froze the operations after users pulled almost $200 million over the last three weeks. A sharp decline in cryptocurrency prices that began with the coll…
This was partly true in the S&L crisis [1]. And for depositors in e.g. Cyprus or Iceland in '08. The difference, however, was depositors in S&Ls and Cypriot and Icelandic banks were legally depositors. The banks' assets were insufficiently liquid to accommodate them en masse. But those assets had value. And that value went, almost first and foremost, to the depositors.
In crypto, there is no such protection. It is likely creditors, employees, tax authorities and secured lenders get paid ahead of users, who are at the end of the day simply unsecured creditors. (And bad ones at that.) Night and day. (Given Coinbase's debt trades comparably to Russia's [2], the smart money is betting users will get nothing in a failure.)
Aside: There is another way to look at it. Users' assets at these firms are CoCos [3]. After the crisis, regulators pushed these bonds which convert into equity when the borrower is distressed. Vauld is distressed. It has to make its loan payments, those lenders can shut it down if it defaults. But it doesn't have to pay users, or even let them withdraw their funds. So their funds "convert," in effect, into equity. Money Vauld can play with to buy time until their assets rally or right the ship with a lighter burn.
[1] https://en.wikipedia.org/wiki/Savings_and_loan_crisis
[2] https://markets.businessinsider.com/news/bonds/coinbase-cryp...
[3] https://www.investopedia.com/terms/c/contingentconvertible.a...