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Pragmatic Capitalism

Practical Views on Money & Finance

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Lessons From the Newest Electronic Money – Bitcoin

One of the more interesting developments of the electronic age of money has been the rise of Bitcoin, a decentralized digital currency. If you’re not familiar with it or you’re confused by what bitcoin is, you’re not alone. It’s actually a fairly sophisticated and complex form of money. That’s right, bitcoin is money.

Some Thoughts on the Future of Home Prices

I was reading this report from Zillow on the future of home prices and it got me thinking about some of the macro trends in real estate.  I’ve turned much more constructive on housing in the last year than I had been for the past 5-6 years.  Before about 12 months ago I wouldn’t have… Read More

Deficit Hypocrisy

I was watching this video on Yahoo Finance this morning with Jim Rickards of Austrian economics fame.   He calls the low interest rate policy of the Fed a “tax on savers”: “[Interest payments] would have gone into the pockets of savers so they could invest and spend – people rely on it for their… Read More

The Inherent Fragility of the “Wealth Effect”

You probably thought the boom/bust cycle experiment that started with Alan Greenspan was over when Ben Bernanke came to the Fed.  Or maybe you weren’t that naive to begin with. Either way, Bernanke is implementing very similar and in my opinion, dangerous economic policy. When Greenspan was head of the Fed, he made it well… Read More

Understanding Moneyness

Moneyness: Refers to how pure a particular type of asset or financial asset is in meeting the definition of “money” as a means of final payment.

On CPI and Owners Equivalent Rent

I noticed this story on Owners Equivalent Rent on the Atlanta Fed’s blog today.  It discusses the rationale behind using what the Bureau of Labor Statistics calls “Owners Equivalent Rent” in their CPI calculation.   Specifically, they say: “This begs the question: In light of the recent strength seen in the housing market—and notably the… Read More

Why Recession Forecasting Matters….Still

Last October I wrote an important Orcam Research piece that described why recession forecasting can make a big difference.  Not only are recessions important in understanding future policy (since high unemployment tends to result of recession, but from the perspective of portfolio management, recessions tend to be when the worse loss of capital occurs. Now,… Read More

Lessons From a(nother) Fund Collapse

I saw this story over at Josh Brown’s site about an “apple only hedge fund” that has apparently imploded.  These sorts of stories are nothing new, but it does get frustrating to see how people keep falling for these sorts of investment schemes.  And yes, they are schemes because they can’t deliver what they promise.… Read More

Is A “Great Rotation” Underway?

It’s been difficult to escape discussion about the “great rotation” in recent weeks. In case you’ve been hiding underneath a rock, the idea of the “great rotation” is that investors will rotate out of bonds and into stocks. There are three big misunderstandings being made behind this thesis: