As bitcoin continued its downward slide Tuesday, U.S. regulators are reportedly looking into whether its record-breaking rally last year was the result of market manipulation.
~Kate Rooney, CNBC.COM
What a difference a year makes. On December 17, 2017, Fortune Magazine writer David Morris reported:
The price of one bitcoin (BTC) reached a new all-time high of $19,783.06 early Sunday before dropping back below $19,500, according to Coindesk’s price index.
As of this writing, bitcoin’s price has risen more than 5% in 24 hours, and is up 1,824% since Jan. 1 of this year, when a single Bitcoin could be had for just under $1,000.
Funny how this precipitous increase in the value of a digital currency which operates independent of any central bank and is not backed up by any material asset such as gold or silver did not catch the attention of regulators on its way up. Imagine, the same individuals who celebrate the virtues of a free market when they are making millions, if not billions of dollars, on pure speculation now are hopeful government regulators will step him and save their inflated earnings. The message? While business is great in the financial prostitution business, leave us alone. But once the shine comes off of this substitute for real earnings, “HELP!”
Sound familiar? Was it not 10 short years ago when banks and hedge funds made a similar bet on mortgage backed securities and Wall Street brokers supposedly spread the risk across global markets with unsecured financial instruments like derivatives and insurance schemes like credit default swaps? And how did the crisis get resolved? With a $700 billion bailout of the secondary mortgage market funded by U.S. taxpayers, many of whom lost their homes when the housing bubble burst. And how many perpetrators of these schemes forfeited the assets they accrued while gaming the system or went to jail for fraud and malpractice? ZERO.
Perhaps its time former Major League Baseball (MLB) commissioner Bud Selig becomes chairman of the Securities and Exchange Commission (SEC). Selig oversaw what can only be described as the sports equivalent of a looming financial disaster with the increased use of performance enhancing drugs by MLB players.
Much as the value of derivatives and bitcoins were unnaturally inflated, the number of players breaking records for home runs and power hitting was artificially high. In 2006, there was an equally worrisome increase in PED use among pitchers. MLB banned the use of performance enhancing drugs in 1991, but relied on an honor system without mandated testing. In other words, when it came to steroids in baseball, “self-regulaton” was the order of the day. However, as more and more players achieved unprecedented “success,” the guardians of the game realized something was not kosher.
Therefore, in 2003, the league introduced mandatory testing with a minimum 10 game suspension. Between 2003 and 2014, 49 players were suspended ranging from the minimum to 162 games (the entire 2014 season) for Yankee shortstop Alex Rodriguez. In March 2014, MLB adopted mandatory suspensions–80 games for the first offense, a full season for the second and a lifetime ban for the third. To date, Mets pitcher Jenrry Meija is the only player to receive the lifetime ban though he is eligible to apply for reinstatement two years after the ban was imposed.
Is the steroid era for bitcoins over? This morning the price of bitcoins opened at 4,253 U.S. dollars, a loss of more than 78 percent of their December 2017 value. As with the Baseball Hall of Fame, maybe anyone who made the Forbes 400 list of wealthiest American based on subprime loan manipulation or by virtue of investments in bitcoins should have an asterisk next to their names. Or legalize their activity and relocate them to isolated facilities in rural Nevada counties. Managers will still need college degrees. Perhaps university departments of finance should start offering specialty MFBAs (Masters of Financial Brothel Administration).
For what it’s worth.
Dr. ESP
During Tuesday night’s coverage of the Yankees/Red Sox baseball game, the post-game analysts wondered how the potential acquisition of free agent Bryce Harper would change the Yankee’s future championship fortunes (which for 2018, had just ended with a 4-3 loss to Boston). One panelist compared the addition of Harper to the current roster as approaching the 1927 lineup known as “murderers row,” led by Babe Ruth and Lou Gehrig.
When the Yanks needed a dramatic Sunday comeback, there were three matches on which the final outcome seemed to depend. Could U.S. players cool off the hottest players on the opposing team–Francesco Molinari, Tommy Fleetwood, Justin Rose and Rory McIlroy? When the dust cleared on these matches, three of the Europeans had fallen to two U.S. rookies–Tony Finau and Justin Thomas–and one competitor who experienced only one previous loss to a foreign home team–Webb Simpson. The sole exception was 48 year-old Mickelson’s defeat at the hands of Molinari who prior to this competition had never won a full point in two previous appearances. The 2018 event is now the sixth consecutive time Mickelson has been on the losing side when the Europeans host the matches.
This is going to be short and sweet. If you think golf is elitist, Saturday it lost its oft-deserved title to professional tennis. This is not to take anything away from Naomi Osaka who demonstrated her star power and class and who I believe would have won her first grand slam title without the help of the chair umpire.
I guess Coach Fedora did not read the article in the Journal of the American Medical Association in which the Boston University CTE Center reported 99 percent of brains obtained from NFL players, 91 percent from college football players and 21 percent of high school players showed effects of CTE. Or that the NFL has already made over $100 million in payments to affected players in a settlement that may eventually exceed one billion dollars and acknowledges the link between football and CTE.