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Bubbles and troubles

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The Bitcoin bubble shows no sign of abating at the moment. Ten thousand is a nice round number, and bubbles prefer round numbers to real world fundamentals. Economically, this is primarily an issue of transferring wealth from a large group (bubble buyers) to a small group (bubble sellers).
  • US Federal Reserve Chair nominee Powell is before the Senate banking committee. Investors will want to see how good Powell is at not answering questions (an essential talent for any independent central banker). Powell's approach to bank regulation is also of interest.
  • Ireland's vote of no-confidence in the deputy prime minister is scheduled for this evening (assuming no resignation). Irish politics may present problems for the December heads of government summit, where progress on the UK's exit from the EU had been expected. No progress in December may force markets to give some probability to a "no deal" exit.
  • The US tax soap opera continues - two Republican senators are suggesting that they are not prepared to allow the bill to leave committee for a vote of the whole Senate. Whether there are enough votes for passage by the whole Senate is also uncertain. More trading of horses and barreling of pork seems likely.