Why would you ever use BitCoins?

From $266 to $54.25 in a matter of hours. An 80% fall puts the dramatic crash of the dot-com bubble at the beginning of the century to shame. Even Cypriot banking customers were recently allowed to keep more of their deposits. And this is the “currency” that is supposed to compete and replace fiat currencies, like the US dollar and the Euro, to create a more stable and trust worthy financial system.

Source: bitcoin.clarkmoody.com

Advocates of BitCoins usually argues that it is the lack of government involvement, central banks and limited and finite supply that make BitCoins a valid and superior alternative to fiat currencies. Business Insider (BI) argues very well against this idea and concludes that BitCoins don’t have any intrinsic value but that fiat currencies do. BI points out that fiat currencies has the “slight” advantage, over BitCoins, of a legal system, authorities and the full force of the army backing them. Whilst this is a strong argument, let’s forget that for a minute, just for arguments sake, and imagine that BitCoins has replaced fiat currencies and then just ask us, why would you ever use a BitCoin?

We must avoid an accidental Greek Euro exit

With the Greek election on Sunday the debate and speculation around what a Greek exit from the Eurozone, and possibly the EU, would mean is reaching fever pitch. Unfortunately, the analysis has for the most part been rather short sighted, mostly in the form of detailed, but doomed to be inaccurate, calculations trying to forecast what bank will be hurt the most or the least or how much the ECB would suffer. In yesterday’s FT, we finally saw some sober analysis in the Euro debate from Moritz Kraemer, head of EMEA sovereign ratings at Standard & Poor’s.

Facebook struggled to raise equity, so the equity cult is dead, says the FT. Really!?

So the FT think that Facebook struggled to raise equity? Funny, I thought the raising part went very well. It was the trading part that broke down. FB managed to raise $16bn at $38, or 65x earnings. I call that a success. I think Mark and his bankers do to.

John Authers and Kate Burgess argues in today’s FT that the six decade equity cult is dead and that bonds will now seriously take over as the investment of choice. The FT continues to say that companies don’t issue equity anymore but raise cash through the credit markets instead because equity financing is too expensive. It think the FT needs a little Finance 101.

Risk management at JP Morgan

Today’s news that JP Morgan lost $2bn on trading credit derivatives looks like a particularly nasty story and is likely to go on for some time. According to some estimates JP Morgan has a position of $100 billion in credit derivatives, with what appears to be little or no risk management.

Market dislocation

I’ve wondered for a while why none core (and some core) European bond markets have sold off and equities haven’t. I guess equities are playing catch up today. And the only safe havens are Bunds, Gilts and Swedish treasuries (2.02% on the 30 year last week)… and US Treasuries.

Greek Euro exit unlikely

Greece cannot exit the Euro. Greece does not want to exit the Euro. Greece will not exit the Euro. Just think about what would happen if Greece did.

Non-exclusive Nokia/Microsoft deal is good?

Lex (Nokia and Microsoft phone a friend) and many other columns and analysts seem to think the lack of exclusivity is a bad deal for Nokia. Why is it an issue that Nokia didn’t get an exclusive deal with Microsoft on the Windows Phone OS (WP7)?

Shouldn’t Nokia be happy that the deal isn’t exclusive? Look at what exclusivity has done so far to the IT and consumer electronics industry.

Bafin looks a bit naked

Germany’s financial regulator Bafin has come to the rescue and banned naked short selling of eurozone sovereign bonds, CDS and 10 leading German financial stocks. It wasn’t a good idea in 2008 and this is one idea that does not become better with age.

According to a recent study on the effects of the short selling bans of 2008, it only makes a bad situation worse. We don’t really need a study to tell us that, it’s only common sense.

Is Apple losing its cool?

iMac, iPod, iPhone. Pretty much everything that Apple [AAPL US] has touched and given a name starting with “i” has been a storming success. However, with the release of iPad Apple seems to losing its touch and rivals have not been idle. Is Apple losing to Microsoft [MSFT US] and Google [GOOG US]?

Bernanke again

Not unexpected but still not great news. Bernanke will lead the Fed for another term.

Many of the senators voting against Bernanke and even those who voted for him argued along the lines of “better the devil you know”. Isn’t there something wrong and totally unnecessary with a vote when you only have one alternative? Isn’t that what the west used to criticize the USSR for when it came to their elections? Only one candidate.

How can the Senate vote on the head of the Fed if they only have one alternative? Off course they will vote for Bernanke no matter how much they don’t like him or how inappropriate he is to run the Fed.

Oh well. The market has to live with him for another term. At least we know the Fed will get it wrong … again. There is some comfort in that!