Alas, Poor Bitcoin

Double, double, toil and trouble, 

Bitcoin bust and Blockchain bubble.

Remember when the value of a single bitcoin was expected to hit $100,000?  Nellie Bowles, the NY Times' intrepid California tech reporter, does.

Today the price of Bitcoin — $19,783 last December — is $3,810. Litecoin was $366 a coin; it’s now $30. Ethereum was $1,400 in January; today it’s $130.

*** 

The computing power needed to “mine” a Bitcoin or other cryptocurrency is now sometimes costing more than that coin is worth.

Blockchain, the technology developed to help manage Bitcoin, offers vast potential "to transform financial systems," Bowles writes. Inevitably, cockamamie blockchain ventures boiled up.

Even the word itself worked wonders. "When Long Island Iced Tea Company changed its name to Long Blockchain Company, its stock went up 500 percent in a day."

On a lighter note

I always enjoy Dave Barry's Year in Review.  Hope you do also.

Guardian Columnist Disses Northern Ad

Today's admeisters stress pinpoint accuracy: Deliver your sales pitch for gold-plated garlic presses only to people who think gold-plated garlic presses are totally cool.

Aspirational advertising spreads a wider net. Generations have learned what to buy when they get rich by leafing through the pages of The New Yorker. (You're unlikely to purchase a Rolex or a Bentley someday if you've never heard of them.)

If Thomas Ricks had recognized the value of aspirational advertising, his Guardian column might have been less grumpy. Northern Trust's "Greater" message draws particular ire:

[T}he full page ad that set me off on this tear came on page 10, when a relatively young man – his bearded thirty-ish face illuminated as he stares off to the side – is shown behind the capitalized headline “GREATER IS ELEVATING THE FAMILY NAME INTO AN ICON.” The text below, from a trust company, explains that, OK, you have your “business ownership and personal wealth”, but now you have to move up to the next step, “build something that lasts”. Not only is being comfortable no longer the goal, being wealthy is no longer enough.

Admittedly, Northern's message encourages greed and egotism:

"How do you feel now that you're taking $50 million out of the company?"  

"I feel great." 

"So why are you moping around like a dog who lost his bone?"

"I want to feel greater."

But greed, Michael Douglas reminded us in "Wall Street," is good. And although audiences were supposed to scorn that sentiment, the film reportedly inspired a good number of young people to seek a Wall Street career.

The Simon abundance index

There has been a followup on the famous bet between Julian Simon and Paul Ehrlich on whether the costs of resources go down over time. Ehrlich ("The Population Bomb) thought that Reverend Malthus was right, and we were on the brink of mass starvation. The fact that he was entirely wrong has not had any impact on his dire opinions.

Simon and Ehrlich bet on five materials on a ten-year span.  In this followup, 50 items are tracked from 1980 to 2017. Bottom line, as population grows, access to resources grows.  Simon continues to win.

Now I have to figure out how to put this new learning into ITN.

The High Price of Nice Dinners, Continued

Robert Neubecker's illustration for
"We Went to a Steak Dinner Annuity Pitch."

After an invitation to a gourmet dinner arrived in the mailbox of his 80-year-old aunt, NY Times columnist Ron Lieber decided to go along as her guest. Like other (but not all) nice dinners, Lieber found that this one – promoting equity indexed annuities – was garnished with dubious financial claims.

Almost a decade ago, in “Protecting Older Investors: 2009 Free Lunch Seminar Report,” AARP said 63 percent of the people it had surveyed had received an invitation like the one my aunt found in her mailbox. Among that group, 57 percent had received five or more within the previous three years. The organization figured that 5.9 million people ages 55 or over had attended at least one seminar. 

AARP’s protective instincts were warranted. Two years earlier, the Securities and Exchange Commission, the North American Securities Administrators Association and the Financial Industry Regulatory Authority sent examiners to 110 free-meal seminars.  They found  that 57 percent of the time, the salespeople used materials that “may have been misleading or exaggerated or included seemingly unwarranted claims.”

I genuinely hoped not to encounter any such thing Tuesday night. But I did.

To avoid elder abuse, annuity sales efforts are said to target people no older than 70. But oldsters certainly get dinner invitations. My mother has received several this year. Had she not died in the 1990s, she now would be well over 100.