South of Safe Heaven
One comfort of our ridiculous investing age is that all the gambling on GameStonk or Dogecoin or whatever feels like it’s being played with Monopoly money. Yes, people are taking losses and getting ripped off, such as the poor saps in this must-read Bloomberg News story on crypto “rug-pulling” schemes.
But the sums are mostly small. And if you’re monkeying around in an asset class calling itself “S*** Coin” — and specifically a s*** coin going by the not-at-all-trying-too-hard name of “Safe Heaven” — then buddy, you might just have it coming. A lot of these diamond-hands types are happy to lose money anyway, just for the Reddit upvotes.
Still, these things can metastasize. Pets.com was all fun and games until the whole stock market crashed and took the economy with it. Decentralized finance, the blockchain and human ingenuity have infinite capacity to spawn infinite Safe Heavens, including some that may be sophisticated enough to draw in real cash, warns Bloomberg’s editorial board. And once big players start dropping, they can drag bigger markets down with them. Lawmakers and regulators can’t sleep on the systemic risks here, no matter how marginal or hilarious they might seem right now. Sometimes a clown is just a clown, other times it’s Pennywise. Or even just a clown shower. Nobody wants to see that.
Genghis Khan Could Have Told Us
People have been fighting over the land we now call Afghanistan for millenniums. It has been kicking their butts the whole time. Arabs, Mongols, Safavids, British, Soviets — all found the territory ruinously painful, if not impossible, to hold. The trouble for all of these people is that they were not Afghan people. The locals will always be far more invested in fighting off invaders than the invaders will be in sticking around, writes Leonid Bershidsky. That’s why the US and the U.S.S.R. both ended up hightailing it out of the place. Some successor superpower — China or India or Nea So Copros — will probably end up doing the same thing.
But maybe this isn’t the loss it seems to be for the US Unlike the Soviet Union, this country did not drown in its Afghan quagmire, writes Hal Brands. That’s partly because it never fully committed to the bit. It lost thousands of lives and trillions of dollars there, but the cost also could have been so much worse. We chose to hold back and got the results we should have expected from such a limited engagement. That doesn’t mean it was a mistake.
Picking the Wrong Big Tech Fight
Just yesterday we wrote about how this country’s antitrust weaponry is rickety and underused. And then a bunch of states sued Google over what they claim is anticompetitive management of its app store. Great, right? Not really. Tae Kim points out Google’s app store is actually less grasping and monopolistic than Apple’s. The company should have an easy time swatting the lawsuit down, making it a big waste of time and resources and maybe leaving Google even stronger. So to update yesterday’s take: We need newer antitrust weapons. We need them used more often. And also please don’t swing them around wildly.
Telltale Charts
A company plans to burn Pennsylvania waste coal to power a Bitcoin-mining operation, in an effort to make Bitcoin greener. You see the problem with that, right? Liam Denning does, and so does this Elaine He chart.
Bloomberg
