We have all heard about the wild ascent and subsequent fall in the price of Bitcoin, and shortening cryp

tocurrency to crypto in your conversation is a sure fire way to sound cool.  However, the underlying technology driving Bitcoin, called blockchain, has many theoretical uses.  From Yardeni Research’s Morning Briefing today:

1) Blockchain basics. We’ve long been fans of blockchain, the technology behind bitcoin and other cryptocurrencies. It’s a distributed ledger, or database, where data of all sorts is housed in multiple locations, so that, in theory, it cannot be hacked. To change the data, it must be changed in all of the locations, and all of the holders of the data must agree to the change.

(2) Spreading fast. The implementation of blockchain is gaining momentum. A 3/11 WSJ article gave some examples: “Already, 1.1 million items sold or on sale at Walmart are on a blockchain—including chicken and almond milk—helping the company trace their journey from manufacturer to store shelf. Global shipping giant Maersk uses the same technology from IBM to track shipping containers, making it faster and easier to transfer them and get them through customs. … Everledger, a company started in April 2014 with the intention of creating a blockchain-based registry of every certified diamond in the world, already has 2.2 million diamonds in its registry. It’s adding about 100,000 diamonds a month, says Leanne Kemp, chief executive and founder.”

Other potential uses for blockchain include tracking property titles, loans, deposits, derivative contracts, stocks, and bonds. It could be used by retailers to ensure their goods are indeed organic or being produced using fair-trade or sustainable practices.

Ed then goes on to postulate that blockchain could be used instead of tariffs to keep steel from being dumped here at unfair prices:

(4) The blockchain solution. If the US required the registration of imported steel on a blockchain system, it could easily determine where the steel was being produced and what price was being asked for it. The government could more precisely track whether Chinese steel was being dumped in Canada and then sold into the US at below-market prices. And it could set limits on how much steel could be sold at below-market prices—thereby targeting the below-priced steel shipment instead of any specific country.

“The use of the ‘smart contracts’ created by blockchain technology allows for the irrefutable, certainty of the origin of any product produced or [traded] around the world. By tagging the origin of products, it’s no longer ‘trust and verify’, it becomes proof or no trade! The supply chain will never be the same,” noted a 3/13 CNBC commentary by Jack Bouroudjian, chief economist and co-founder of UCX, a secondary marketplace for cloud computing resources. He continued: “One thing we should all agree on is that you can’t fight a digital economic war with analog ideology. As the creators and proliferators of American free market style capitalism around the world, it becomes the job of the U.S. to lead. Smart contracts and blockchain technology will be much more effective than any tariff ever established.”


The Anniversary of the 2009 Market Low

by Laura Ehrenberg-Chesler on March 6, 2018 in capitalism

March 6, 2009 was the market low during the era if the financial crisis. Intra-day, the S&P 500 dipped to 666. Some of the headlines from that period were as follows” “Market’s 7-day rout leaves U.S. reeling” “Worst Week Ever for Stocks” “Mounting Fears Shake World Markets” “FORCLOSURES” “The Week That Changed American Capitalism” We […]

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Warren Buffett Invests Like a Girl

by Marilou Moursund on March 1, 2018 in Investment Strategies

In this Bloomberg article titled “The Next Warren Buffett Will Be A Woman“, the author lays out research that shows how women invest and compares their personality traits to those of Warren Buffett.  The author contends that women are more patient, not prone to panic, and have less of a tendency to be overconfident.  These […]

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Digitization and Good Policies can drive Productivity Gains

by Laura Ehrenberg-Chesler on February 26, 2018 in Economic Indicators

From the “Wall Street Journal” today: “Digitization isn’t the only factor economies could embrace to unlock productivity growth. The report calls for policies to encourage education, businesses investment and the purchasing power of low-income consumers. Rising income inequality since the mid-2000s has been a constant, if moderate, drag on demand, according to the report. If […]

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Bonds Sell Off after Release of Fed Minutes

by Marilou Moursund on February 21, 2018 in Bonds

The yield on the 10 year Treasury jumped from 2.88% this morning to 2.96% this afternoon after the Federal Reserve released its minutes from the January meeting.  Fed officials increased their outlook for both growth and inflation in January.  From the linked Wall Street Journal article: Fed officials late last month believed the economy was […]

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Falcon Heavy Rocket Flies Like an Eagle – courtesy of Stratfor

by Marilou Moursund on February 7, 2018 in Space exploration

The SpaceX launch of its Falcon Heavy rocket yesterday is very exciting news for the future of space exploration.  From the linked Stratfor article: SpaceX’s process of disrupting the space industry remains long and prosperous. The private company has successfully launched its Falcon Heavy rocket, sending its “payload” spacecraft, which in this case carries founder Elon […]

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Earnings led Melt Up

by Laura Ehrenberg-Chesler on January 29, 2018 in Earnings

As Ed Yardeni stated this morning in his daily research piece, most market “melt-ups” are led by a P/E expansion. The current “Melt Up” is being led by an earnings expansion. From Ed Yardeni: “The short answer to the meltup question is that the stock market is in a meltup, in our opinion; but as […]

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Economy will benefit from Tax Reform

by Laura Ehrenberg-Chesler on January 26, 2018 in Employment

Many companies are now announcing various ways the new tax reform bill will stimulate capital spending and therefore the economy. This is helping to lift industry and their employees beyond the immediate bonuses. From well known companies like Apple and Kimberly-Clark to lesser known companies like Amicus Therapeutics, there is a rush to bring money […]

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Truck Shortage is Another Indicator of the Strong Economy

by Marilou Moursund on January 24, 2018 in Economic Indicators

The Wall Street Journal had an interesting article today about the shortage of trucks in the U.S.  From the linked article: Several factors have converged to overwhelm the trucking market. Freight volumes in December hit near-record levels for that time of year, on the back of a strengthening economy. Retailers are replenishing stocks after one […]

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Expectations for Earnings heading Up; Valuations stay Reasonable

by Laura Ehrenberg-Chesler on January 16, 2018 in Earnings

Stocks prices have been on a solid upward trajectory as we all know but, so have earnings estimates. This is from Ed Yardeni today: “(1) 2018 and 2019. The Tax Cut and Jobs Act (TCJA) passed at the end of last year is already boosting earnings estimates. Joe reports that analysts’ consensus estimates for S&P […]

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