Bitcoin selloff on wendsay was huge since it lost 17% of its earlier value,
and I think this has to do with the president of El Salvador declaring that his
country will except this currency as an exchange method. The article also
indicates this by saying “There hasn’t been a single catalyst to precipitate the
selloff. A 70% run-up in bitcoin’s value since late July—combined with the
euphoria tied to El Salvador’s adopting bitcoin as a national currency—could have
prompted traders to book profits, analyst.” I think a lot of people were cashing
out their positions and taking their profit due to the new and they were not sure
how the currency will discount this news which I think is very intelligent
considering the volatility of Bitcoin. This has also cause other currencies to have
wild swings due to the big fluctuation of the value of Bitcoin, and the article also
mentions this “Bitcoin and rival digital assets are also notoriously jumpy, with
prices frequently swinging wildly on rumors, tweets by influencers or a shift in
sentiment among groups of traders banding together on social media to make
speculative bets.”
The article about GameStop signifies the fact that this bubble of GameStop
is something that have repeated itself over the time starting from the Tulip
Mania, and this is how the article explains this phenomenon “When tulips were
introduced to Western Europe in the 16th century, they were prized for their
brilliant colors. Eventually, though, the Dutch took the tulip trade to the next
level, as the 19th century writer Charles Mackay points out in his book
“Extraordinary Popular Delusions and the Madness of Crowds.” The people of
17th century Holland were no strangers to markets and trade. The stock exchange
in Amsterdam had been operating since 1602, and the Dutch East India Company
was already selling bonds and stocks.” The primary cause for this was limited
supply and the appetite of rare bulbs since a lot of people were trying to buy
these rare bulbs, and the phenomena of game stop is no different than that of
Tulip mania. The article also explains a similar situation in the south sea bubble,
and it says “Demand remained steady. But then new players set up ventures for
everything from “encouraging the breed of horses in England” to merely, “A
company for carrying on an undertaking of great advantage, but nobody to know
what it is,” Mr. Mackay wrote. The government eventually passed the Bubble Act,
which prevented the creation of companies without government permission and
limited existing companies to the activities laid out in their charters. Shares in the
new companies crashed, as did the South Sea Company’s stock.”
Global Economic warfare intensifies as military conflict recedes and this has
diminished the economic power house of America coupled with Covid-19 and the
article signifies that “You can see similar forces at work today. Like protectionism
and Covid-19, economic warfare undermines global integration and increases
countries’ pursuit of self-sufficiency. Every time the U.S. exploits the dollar’s
centrality to global finance to punish someone, it encourages the world’s search
for an alternative. U.S. export bans have aligned China’s private and public sectors
behind its longtime pursuit of self-sufficiency in key technologies. The U.S. bet is
that in the long run, such sanctions will make China a less potent adversary; they
may also make it a more belligerent one.”
Twenty Years ago, the stock market has hit low and this was due to many factors
and there were many factors that has contributed to. The article also explains this
: “1. Extraordinary market declines are anything but. Every decade or so, we get
a big stock market swoon. All feel catastrophic at the time, and yet—in
retrospect—they seem almost routine. Think back over the past half-century and
what’s happened to the S&P 500.
We had 1973-74’s grueling 48% drop triggered by the OPEC oil embargo and
escalating inflation, 1980-82’s 27% bear market wrought by a double-dip
recession, 1987’s stunning 34% crash, 1990’s 20% decline following the Iraqi
invasion of Kuwait, 2000-02’s 49% meltdown caused by the dot-com bust and
9/11 terrorist attacks, 2007-09’s global financial crisis with its 57% bloodbath, and
2020’s 34% coronavirus crash.
Each of these market collapses had a different cause and played out in a different
way. Yet the smart way to behave was the same every time: Investors needed to
grit their teeth, rebalance back to their portfolio’s target stock percentage and, if
at all possible, shovel any extra cash into broadly diversified stock funds.
2. The talking heads are clueless. While many warned that stocks were
overpriced in 2000, nobody predicted the 9/11 terrorist attacks. A few foresaw
the dangers in the mortgage-bond market in the mid-2000s, but the magnitude of
the financial fallout eluded almost everybody. Nobody predicted 2020’s
pandemic.”
China has proposed a proposal which will ban its people from playing video
games and I think this will increase the productivity of the country. The article
explains this “ In late August, the Chinese government cracked down on
videogames, banning anyone under the age of 18 from playing online between
Monday and Thursday. On the other three days of the week and on public
holidays, children will be allowed to play online only between 8 p.m. and 9 p.m.
This rule, including an “anti-addiction” system for tracking players, is the latest in
the centuries of efforts by parents and governments to control the lucrative
market for children’s minds.
It also is a reminder about such reforms throughout history: Often, the best way
to make a business boom is to try limiting it. Ever since Adam and Eve ate the
forbidden fruit in the Garden of Eden, telling people they can’t have something
has made them want it all the more.
In every generation, children have craved whatever entertainment their parents
decried and restricted the most. Then they’ve grown up, become parents
themselves—and promptly curtailed their own children’s favorite diversions,
often enlisting governments to enact new restrictions.”
The stock market faces risky bumpy Autumn and this is how the article explains “
After a record-breaking bull run for the U.S. stock market this year, many Wall Street
analysts are starting to warn that investors could be in for a bumpy ride in the
coming weeks and months.
Analysts at firms including Morgan Stanley, Citigroup Inc., Deutsche Bank AG and
Bank of America Corp. published notes this month cautioning about current risks in
the U.S. equity market. With the S&P 500 already hitting 54 records this year
through Thursday—the most during that period since 1995—several analysts said
that they believe there is a growing possibility of a pullback or, at the least, flatter
returns.
Behind that cautious outlook, the researchers said, is a combination of things,
including euphoric investment sentiment, extended valuations and anticipation that
inflation and supply-chain disruptions will weigh on corporate margins.”