Bonds, Explained Through SVB’s Collapse

Buying U.S. government bonds is among the safest investments you can make. In fact, people often put their college funds and retirement savings into bonds. In the midst of recession fears, bonds are often referred to as “risk-free” because there are only two ways you can lose money: 

• The government defaults, which is almost certainly not going to happen, or 
• You sell the bonds early at a loss, which contributed to the collapse of Silicon Valley Bank 

This might make you wonder how safe bonds really are, so WSJ explains why they’re still a good investment.

Investors learning this ‘painful lesson’ after FTX’s ‘crypto Ponzi scheme’

'Coin Stories' podcast host Natalie Brunell argues FTX's bankruptcy was a 'failure on so many levels.'

The Death of the SPAC Boom

SPACS, or special purpose acquisition companies, were all the rage at the start of the pandemic. These shell companies raise cash by listing on the stock market, and then seek a merger with a private company. This created a novel way for companies to list on the stock market without having to go through the traditional initial public offering process.

Now, Spacs are floundering. The FT’s Ortenca Aliaj talks with guest host Jess Smith about how the Spac investment boom collided with rising interest rates and regulatory threats, and ultimately went bust.

Check out how SPACS went bust HERE. 

The ongoing battle to beat the crypto thieves

The price of crypto currencies has plunged recently, but whatever the value of their investment, for digital asset holders, protecting their crypto from thieves is an ongoing problem. In March this year, hackers carried out one of the biggest cryptocurrency heists of all time and with cyber criminals increasingly wielding high-tech tools and techniques, in 2021 cryptocurrency theft grew by around 500 per cent over the previous year.

Malinvestments, When Your Eyes Are Bigger Than Your Stomach

Irrational exuberance can lead to malinvestments.

 

The Fed Pushing For CBDC, "Can't Wrap Their Head Around Not Having It"

 From the Uneducated Economist, an interesting view on the Fed's thinking about a CBDC plus a great take on assets, investments, banking, money and the economy generally.

 

Decentralized Finance - What it is and what it means

"If you're not into cryptocurrency, then the mere mention of Bitcoin or Ethereum probably makes you want to roll your eyes. However, it's possible you won't be able to ignore the changes that will arise in the world of non-traditional banking for long.

That's because DeFi is currently on a path to disrupt most financial transactions in a major way. But, what is DeFi exactly? Well first, it’s short for “Decentralized Finance”.". So writes Robert Farrington in Forbes magazine.

Find out all about Decentralized Finance; what it is and what it means. Read the full article in Forbes HERE

What Is Bank-Owned Life Insurance (BOLI)?

From Bank Director –

Charlie Hicks of Meyer Chatfield explains what BOLI is and how it works.

Warren Buffett Documentary - The Oracle of Omaha

Déjà vu – Bitcoins, Blockchains and the future

Not so long ago, just before the 2008 crash in fact, the Quants disdainfully told the world that their algorithms and their application were just too difficult for the uninitiated to understand. We all know where that led. Now the same is happening with Bitcoin and other crypto currencies. It’s the same old story that “this time it’s different”.

We leave it to your judgment. The following from Institutional Investor.

“The future of Bitcoin is not Bitcoin”

“In October several prominent figures in the Bitcoin development community launched a start-up to considerable fanfare in the technology and finance worlds. San Francisco - based Blockstream aims to take the encryption technology that Bitcoin is built upon - the blockchain - and improve it in ways that will, its founders say, ”transform global systems of value exchange”. The company calls these improvements sidechains.

But ask Austin Hill, chief executive and co-founder of Blockstream, to explain - in less than one minute and using terms intelligible to a lay audience – what sidechains are and how they might help institutional finance, and he launches into a meandering answer that begins, “I think the analogy that’s been used is the TCP/IP and routing infrastructure that existed before the consumer Internet”. By the time he has finished, six minutes later,he has dropped in unexplained references to “hash power,” the blockchain’s “hash rate,” “industrial mining centers” and “the SHA-256 algorithm” before concluding with a brief digression on how 98 percent of developers of alt.coins, or alternative, Bitcoin-like cryptocurrencies, are “attempting to pump and dump an asset class.” This, Hill says, confirms that there is a “Wolf of Wall Street - style dynamic at work in much of the Bitcoin world - referencing Martin Scorsese’s 2013 film about a corrupt stockbroker.”


read the full article>>

Bitcoin Bears Say Told You So

From Bloomberg

“If you think oil had a rough 2014, consider bitcoin. The digital currency has plunged 54 percent since the beginning of the year. By contrast, Brent crude has fallen 44 percent; the ruble is off some 46 percent against the dollar.

Bitcoin’s collapse comes as governments around the world consider regulating or prohibiting the virtual currency to prevent criminals from using it to trade contraband. Meanwhile, bitcoin is facing competition from a slew of rivals striving to be more palatable to regulators.

The dramatic reversal -- bitcoin reached more than $1,100 in 2013 and is now trading at about $350 -- is prompting told-you-sos from skeptics who long said the currency’s promise was overhyped.

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Bitcoin is the worst investment of 2014

From Quartz

“There was plenty of ugliness to be found in the markets this year. Ukranian and Venezuelan sovereign debt. High-yield, energy-related corporate bonds. Argentine pesos. Russian rubles. Greek stocks.

But none of these investments has been as atrociously awful as bitcoin, the heavily hyped crypto-currency that stormed onto the financial scene in the last few years, threatening to disrupt the cornerstone of global finance that is fiat currency.

It hasn’t worked out. Year-to-date bitcoin is down roughly 52% at last glance.”

read more>>