300 YEARS AGO, when the British Empire was still growing, the first wave of global trade was powered not only by the Pound Sterling, but by trades in Bills of Exchange. How did traders from London buy tea in India, porcelain in Hong Kong, or silks in Singapore? They didn’t haul cases of silver and gold in their outbound ships, trading coins for goods. They had to do that when global trade...
An oft-repeated phrase before an economic or market-based bubble bursts is “this time is different”. A few months ago I asked what the consequences of the Federal Reserve printing $8 trillion. Best anyone can say is that the one clear result of that is a highly inflated stock market. I stumbled upon the Current Market Valuation website to find all these graphs. Above is Warren...
Neither the political nor business news is covering what may be the pivotal story of the 21st Century. The fundamental change in behavior of the Federal Reserve Bank since the Panic of 2007. That sounds like a dry topic, and I assure you it is. The driest and most dismal corner of economics, itself known as the “dismal science“. But nonetheless something that may change the course of...
Wall Street has a hot new old tool, the special purpose acquisition company, a.k.a. the SPAC. This is a public company that is nothing more than a pool of capital and set of advisors in search of a business to buy. It is supposedly a more efficient path for private companies to become public companies instead of the following the traditional IPO. At worst it is flawed solution to a flawed IPO...
The right framework can uncover the most hidden of assumptions. For example, the 2021 winter blackouts in Texas. While the politicians and news debate over windmills, natural gas, and deregulation, they are missing the the framework and thus talking trees instead of forest. The better way to look at this problem is the consequence of a hidden tradeoff we make with all our big, complex...
The last government antitrust breakup was AT&T back in 1984. It followed the model of Standard Oil back in 1911. Business and technology have changed a lot since the Sherman Anti-Trust Act was written and passed 130 years ago, in 1890. It’s time we update what we mean by trust-like behavior and how we remedy those consequences. Note that the breakups of Standard Oil and AT&T were...
What I glossed over in Selling the first telephone is the fact that AT&T didn’t actually sell any telephones. Until the breakup of the company in 1984, telephones were rented as part of the monthly service. Renting was a choice to seemingly maximize profits. The excuse AT&T gave the government disallowing customers from owning their own phones was that AT&T was protecting their...
Back to understanding money and economics, I started reading The New Lombard Street soon after serendipitously discovering the wonderful online class, Economics of Money and Banking by Professor Perry Merhling (@PMerhling). After two or three years buried under other books on my nightstand, prodded a bit by a discussion group popping up on Reddit talking about the class, I finally finished...
If you’ve never seen Hans Rosling speak, scroll down, click play, and be amazed. Before Hans passed away, he wrote down his big learnings in Factfulness. This is one one those books everyone should be read. It’s a easy read, and insightful and hopeful, and at the same time, frightening. The key lesson is that almost no one really knows what is going on in the world. Population growh...
Back in 1992, at age 22, I started my first company. Before cellphones. Before the Web. Before broadband. Before everyone had an email address. Before the Lean Startup. But what I (and others) took for granted was a system of Angel investors and venture capitalists. I didn’t think twice back then where that system came from. I didn’t consider whether the same system funded Edison...
