Year: 2017

The Bear’s Lair: A Crypto Christmas Carol

I wrote an “E-Christmas Carol” in 2001, set two years earlier, in December 1999. As prophesy, it was only so-so, but it captured the zeitgeist of the dot-com bubble quite well. This week, since we are in a new version of 1999’s gigantic bubble, I thought I would have another go….

The Bear’s Lair: Britain must detach bits from the USE

Germany’s SPD leader Martin Schulz wants a “United States of Europe” by 2025. While his potential coalition partner Angela Merkel quickly disowned this monstrous idea, it is very probably a genuine ambition that just slipped out. For Britain, the few historically educated citizens of which remember the times when Hitler, the Kaiser, Napoleon and Louis […]

The Bear’s Lair: Gross Imaginary Product

In the era of crypto-currencies, I propose a new economic statistic: Gross Imaginary Product. This can be defined as the total output at market prices of all products and services which do not actually exist. Contrary to popular superstition, not all the $350 billion value of crypto-currencies is imaginary; there are some real values there. […]

The Bear’s Lair: Triumph of the bureaucrats

The typical form of human government moved from absolute monarchy, to oligarchy, to democracy, but it did not stop there. As government grew, popular control over it declined, while its own bureaucracy became the principal factor determining its direction. We have now reached the stage where to term the result a “democracy” is laughably in […]

The Bear’s Lair: Under funny money, we’re all living in Vegas

“True investing is not the same as gambling” said Isabella Kaminska in the Financial Times recently. Yet in today’s world, I’m damned if I can spot the difference. Bonds are a one-way bet to losses, the stock market is at levels it should not have reached until 2075, London real estate is at levels it […]

The Bear’s Lair: Let’s leave the world economy death spiral

Capitalism requires capital. The process of industrialization is partly one of technological advance, but it is also one of increasing capital use in the economy. But when the return to capital is forced below zero, as in the last decade, the capital base shrinks, the economy misbehaves and productivity declines, in spite of technological wizardry. […]

The Bear’s Lair: Hollowed-out blue chips are the next subprime

Subprime mortgages caused much of the 2008 financial crisis by defaulting in much greater concentrations than the experts expected. The next financial crisis is likely to be caused by a similar disaster that surprises the experts. I have an excellent candidate: Fortune 500 companies that have been repurchasing their shares like maniacs for a decade, […]

The Bear’s Lair: Keep Engels’ paws off the economy

My much-esteemed ex-colleague Andrew Stuttaford has written several times on the dangers of robotics. He believes that our living standards may come to suffer an “Engels Pause” similar to the impoverishment Friedrich Engels, writing in 1844, saw resulting from the early Industrial Revolution. Having studied that period in my work on Lord Liverpool, I will […]

The Bear’s Lair: Trump tax reform won’t goose growth

President Trump’s proposed budget justifies its potential $1.5 trillion increase in the Federal deficit over ten years by claiming it will increase the anemic U.S. growth rate (thereby paying for itself). There can after the third quarter figures released Friday be no question that the U.S. economic growth rate has increased under Trump, with his […]

The Bear’s Lair: Trade and immigration need garden fences

“Good fences make good neighbors” wrote Robert Frost in 1914. Those who have lived in both British and modern American suburbs can agree. High fences are not ideal; you can’t talk to people across them. But nor are a complete lack of fences, which allows gangs of neighborhood kids to race across your garden every […]