Financial History Magazine: Tulips, Paper Money, Limited Liability and Financial Crime

By SIMON CONSTABLE 

Financial innovations often get overheated. Frequently there seems to be a mania, then a crash, which is followed first by state prosecutions and then acceptance of a new way of doing things. And, true to form, it has happened again seemingly in the form of cryptocurrency, which has fast become a cause célèbre.

Cryptocurrency began in January 2009 with the invention of Bitcoin; it built on the related blockchain technology introduced in 1991. One innovation was that the historical blockchain coding couldn’t be retrospectively altered. It was like a ledger where the prior entries could not be changed. Another distinctive characteristic was there would only ever be a fixed number of Bitcoins available. Once they’d all been discovered, or mined, there could be no more. This differentiated cryptocurrency from dollars, which get devalued as more and more bills get printed. For more than a few people, these two attributes were enough to embrace Bitcoin and blockchain. Read more here.

#UK: COPPER SPIKE. @REALCONSTABLE @BATCHELORSHOW OCCITANIE

 By SIMON CONSTABLE

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Chilean Copper mine. Diego Delso, CC BY-SA 4.0, via Wikimedia Commons

UK: TARIFFS, RUSSIA, CHINA AND EUROPE'S AIRBUS BUY. @REALCONSTABLE @BATCHELORSHOW OCCITANIE

By SIMON CONSTABLE

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JoJan, CC BY 3.0, via Wikimedia Commons

Kiplinger's Retirement Report: Can the 'Guardrails Approach' Protect Your Retirement Investments?

By SIMON CONSTABLE

You may not have heard of the "guardrails approach," but this investing tool for retirement planning is worth considering, especially in a volatile market. That's because one of the biggest challenges for many people in retirement is ensuring their retirement investments last for the rest of their lives, yet leave a bequest to heirs. It’s a tough knot to untangle.

Part of the problem is that assets such as stocks and bonds are prone to be volatile. Some years offer solid double-digit returns and others are distinctly poor with tremendous losses. For instance, in 2022 the SPDR S&P 500 exchange-traded fund, which tracks the performance of the large-cap stocks, fell 18%. That same year, the bond market also declined, with U.S. 10-year Treasuries also falling 18%, according to data from New York University. Yet inflation spiked. Read more here.

Hans-Joachim Fröde (User:Acf), CC BY-SA 3.0, via Wikimedia Commons

Barron's: Airbus Stock Could Gain From Boeing’s Woes. Sizing Up the China Question.

 By SIMON CONSTABLE

Shares of European aircraft and military manufacturer Airbus could be set to take off following recent turbulence. The company is outpacing its main rival, U.S.-based Boeing, which has suffered from two 737 MAX crashes, a plane door falling off, and a major strike, not to say stranding two astronauts in orbit after Boeing Starliner problems. Airbus should also benefit as Europe builds up military capabilities.

“As a long-term holding, Airbus is a good name,” says Nick Owens, an equity analyst at Morningstar. He thinks the fair value of the stock is priced at 165 euros ($188), or 19% higher than the recent €139. “Airbus has a strong franchise and long-term viability,” he says. Read more here.

Joao Carlos Medau (https://secure.flickr.com/photos/medau/), CC BY 2.0, via Wikimedia Commons

#FRANCE: PLUMS RIPEN IN PARADISE. @REALCONSTABLE @BATCHELORSHOW.

By SIMON CONSTABLE

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Lesueur, Jean-Baptiste (Paris, en 1749 - Plailly, en 1826), dessinateur, CC0, via Wikimedia Commons

Briefings magazine: ‘Economists get it so wrong.’ Mission Impossible: Predicting Recessions

 By SIMON CONSTABLE

Over time, recessions come and go. It’s just a fact of life. And if one might be imminent, business leaders and politicians all want to know. After all, if a recession could be right around the corner, a company might want to cut back on expenses or hire new employees. But there’s a problem: Few predictions of these economic collapses are right.

Indeed, try as they might, economists are almost always missing the mark. In mid-2022, many all but promised an imminent US recession—one that still hasn’t shown up more than two years later. Likewise, the COVID-19 recession wasn’t widely foretold, nor the Great Recession of 2007 to 2009. Mere months before the 1930s began, economists weren’t forecasting the Great Depression, says Jack Ablin, founding partner at wealth-management company Cresset Capital. “This isn’t a new phenomenon,” he says.

Famed economist John Kenneth Galbraith summed up the failure with a quip: “The only function of economic forecasting is to make astrology look respectable.” Other pundits substitute weather forecasters for astrologists. Nevertheless, the question remains: Why do economists get it so wrong so often? Read more here.