Coppola Comment

Friday was quite a day. The crypto lender BlockFi provisionally agreed a bailout deal with FTX . The hedge fund Three Arrows Capital (3AC), already in compulsory liquidation in its home territory the British Virgin Islands, filed for Chapter 15 bankruptcy protection in the United States. And the crypto broker Voyager suspended trading and withdrawals .  Voyager's press release revealed a massive hole in its balance sheet. Some 58% of its loan book consists of loans to 3AC: And its loan book is nearly 50% of total assets: So approximately 28% of Voyager's assets are in default. And since 3AC now has creditor protection, Voyager must wait for bankruptcy courts to decide how much, if anything, can be recovered. That will take months.  But the balance sheet hole doesn't explain why Voyager has suspended US dollar withdrawals. Despite its apparently healthy "cash held for customers" balance, it seems to be dreadfully short of cash. There is something else going on he

 Stablecoins aren't stable. So-called algorithmic stablecoins crash and burn when people behave in ways the algorithm didn't expect. And reserved stablecoins fall off their pegs - in either direction. A stablecoin that does not stay on its peg is unstable. Not one of the stablecoins currently in circulation lives up to its name.  Don't believe me? Well, here's the evidence. Exhibit 1, USDT since the end of April: Exhibit 2, USDC over the same time period: (charts from Coinmarketcap) Both coins de-pegged on 12th May. Neither has returned to par. Stable, they are not.  And no, USDC is not "more stable" than USDT. A stablecoin that can't hold its peg when everyone is piling into it is no more stable than one that can't hold its peg when everyone is selling it. Indeed, since stablecoins can be created without limit, there is arguably much less excuse for a stablecoin de-pegging on the upside. Stablecoin issuers can run out of reserves, but they can't r

In the U.S., we are told, the post-World War II period was a golden age of full employment. High wartime government spending had brought to an end the double-digit unemployment and misery of the Depression, and as war gave way to peace, unemployment settled at a non-inflationary level of 3-5%. It's known as the post-war "economic miracle". But it's a myth. There was never full employment. The low unemployment of the post-war years is a massive statistical fudge. In fact, over five million people lost their jobs immediately after the end of the war, most of whom never worked again. But they were never listed as unemployed - because they were women.  The Great Unemployment Fudge started in the "Depression of 1946", described by the Cato Institute as "one of the most widely predicted events that never happened in American history". During the war, there was full employment, GDP was roaring and industrial production was at an all-time high. But much o

In a broad-ranging discussion the other day about the path of political and economic policy over the last decade, I found myself returning again and again to events in 2014. Events that were apparently unrelated: Bulgaria's banking crisis , Moldova's banking fraud , the collapse of Banco Espirito Santo , the election of Syriza in Greece, the first Scottish independence referendum, UKIP's success in two Westminster by-elections as well as local and European elections. And in Ukraine, the Euromaidan revolt followed by Russia's annexation of Crimea and invasion of Donbas. "Why do all roads lead back to 2014?" I found myself asking.  The financial and political eruptions of 2014 marked the start of a major shift in the global geopolitical landscape. But it was not clear where the faultline lay. Lots of people thought it was between the Western "old order" and the emergent economies of Asia, led by China. And others, including me, thought it was a revolt

Another day, another application for a spot Bitcoin exchange-traded fund (ETF) rejected. Yesterday, the SEC rejected an application from Fidelity's Wise Origin Bitcoin Trust, the fifth such rejection in three months. Back in November, the SEC rejected an  application from Van Eck Bitcoin Trust, and in December it rejected applications from Kryptoin Bitcoin ETF Trust and Valkyrie Bitcoin Fund.And on 20th January, it rejected First Trust Skybridge Bitcoin ETF Trust's application.   Valkyrie had already had an application for a Bitcoin futures ETF approved by default. So the rejection of its spot ETF came as something of a surprise. Indeed, some analysts seem to have expected the SEC's default approval of Bitcoin futures ETFs for Valkyrie and ProShares in October to open the floodgates for approval of spot Bitcoin ETFs.  But these are not the first spot Bitcoin ETFs the SEC has disapproved. The SEC has previously rejected applications from Winklevoss Bitcoin Trust, SolidX Bitc

As many of you probably know, I have had to take a break from writing recently because of a broken wrist. But I did manage to write responses to this Twitter thread from Shaun Lawson.  I was uncomfortable about responding on Twitter to Shaun's questions, so decided to write them in a Word document and send them to him privately. But on reflection, I believe my views are every bit as worthy of a hearing as those of the trans activists and gender critical people who express themselves loudly all over social media. Twitter is a bear pit, so I'm publishing them here.  As the trans rights debate is extremely toxic, comments are moderated. I will delete comments that are personal attacks on me or anyone else or that are grandstanding a personal agenda.     I dislike the widespread, and often deliberate, conflating of sex-defined terms (“males”, "females") with socially-defined terms ("men", “woman”, “women’s”). So, throughout this piece, I shall use sex-defined