Their clients may well decide to no longer seek a U. The price has been pushing lower since then. Other things don't have an intrinsic value. Eurozone capital flows should eventually reverse from currently large outflows to become inflows as the ECB embarks on a path to normalisation of policy. As more people learned about it, a certain portion invested. Imagine a beauty pageant, where the judges knew that, because beauty was in the eye of the beholder, the contest would be decided on the judge's perception of beauty. Send to a friend Newsletter signup.
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So how do you establish prices? Obviously, via the market. This is when storytelling, which is another way of saying a sales job, takes over. Cryptocurrencies are an obvious example.
A Bitcoin has no yield but it has some utility. To some, that utility is replacing the US dollar as a global transparent currency. To others, it's a way to facilitate transactions. And for others still, it's a handy tool for criminal transactions. How you price it then, depends on how you view the future utility. Another way to price it is simply looking at how others view it.
You might believe that all of those utilities are baseless but if you believe that others are buying it because they believe those things, then it's rational to buy. The only trade on BitCoin is the hype trade. The fundamentals don't matter. The only thing that matters is how enthusiastic the true believers are. I also touched on that here: The idea is that something can always rise so long as there is another person who believes it will. You can argue that Bitcoin was simply a great story.
It was full of buzzwords about transparency, trust, tracking, efficiency plus it was just complicated enough that it wasn't accessible yet alluring in the way that all technical innovations are. The price essentially tracked the rise in its exposure. As more people learned about it, a certain portion invested. For crypto, a month or so before the top, I remember talking to a distant relative who is an absolute blowhard.
He had just bought some and I told my wife that had to be the beginning of the end. Other people were telling stories about their grandparents were asking them how to buy crypto. Joe Kennedy, John F Kennedy's father, famously said he sold his entire stock portfolio before the crash because a shoeshine boy gave him some stock tips. And he figured that when the shoeshine boys have tips, the market was too popular for its own good. Imagine a beauty pageant, where the judges knew that, because beauty was in the eye of the beholder, the contest would be decided on the judge's perception of beauty.
Someone who wanted to predict the outcome would have to assess the judge's perceptions, not the contestant's beauty. As a result, your vote for the winner would not depend on who you thought was prettiest. Instead, your vote would depend on how you thought the judges would vote. In anything where there is no intrinsic value, utility or there is so much uncertainty that it's impossible to evaluate, there is no real analysis of the market. The great bubble at the moment is in marijuana stocks.
The story is that it will be legalized. That's already happened in Uruguay and in October it will happen in Canada. That set off a bonanza of speculation about how companies will make a mint selling marijuana.
Pot stocks have absolutely soared. It started last year in Canada with some producers rising 10x in a few months. A second wave of the bubble has kicked off on the belief that marijuana will eventually be legalized globally. Marijuana is extremely easy to grow. It's called weed because you can grow it in a ditch. Sure, the quality might vary but if you could grow a lower-quality iPhone in your back yard, then Apple wouldn't be a trillion dollar company.
But in a bubble that doesn't matter. Marijuana legalization is a great story. People undoubtedly spend a lot of money on pot and companies could make money doing it. It's not a story I believe yet it's compelling enough that fools around the world are going to believe it. ForexLive Here's the Google search trends chart for 'weed stocks'. The lesson is simple. When you're evaluating some assets, you don't necessarily need to be able to make sense of them. You are just evaluating the story.
If it's compelling enough, the asset will continue to rise until the supply of fools is exhausted. There remain some substantive differences Barnier: It's entirely natural to think short-term neutral may rise above long-run estimate US business inventories for July 0. US consumer is very strong US import prices GBP shorts remain the largest spec position Markets:. It was a full day of headlines on Friday with the main one a report that Trump has told his cabinet yesterday he wants to impose China tariffs.
Yesterday's rally was completely wiped out in a 60 pip fall to 1. That takes the shine off a nice two-day bounce from 0. Cable news from Raab and Barnier wasn't a big surprise and didn't have much of an effect. Cable was caught in a broad US dollar bid that was built on solid data and talk about the Fed hiking beyond long-term neutral next year. The White House says the President has been clear that he and his administration will continued to take action to address China's unfair trade practices.
The tariffs are coming. Daly has worked at the New York Fed since and is the current research director. She will take the job on Oct 1. According to Bloomberg that her past speeches hint she could prefer a slow-going approach to rate hikes, which is typical of the San Francisco Fed. Two weeks ago, Argentina was asking the IMF to speed up payments. I was on BNNBloomberg yesterday talking about global currencies. If you skip ahead to 2: Draghi said risks were balanced, so there must have been some people on the other side.
Draghi was surprisingly upbeat yesterday but it's clear that there's some worries, especially with a few weak data points. There's been no reaction to this headline, which hit right at the top of the hour on Reuters.
Helps to weaken the EUR
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