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 The British Advertising Standards Authority (ASA) has banned a bitcoin ad campaign put up across the London Underground network and on London buses by cryptocurrency exchange Luno. The UK advertising regulator says the ads are misleading and irresponsible. ‘Time to Buy Bitcoin’ Ads Banned in the UK A bitcoin advertising campaign put up across London Underground and on buses has been banned by the U.K. Advertising Standards Authority (ASA). The ads contained an image of a bitcoin with the words “If you’re seeing bitcoin on a bus, it’s time to buy” or “If you’re seeing bitcoin on the Underground, it’s time to buy.” They were put up in February. The ASA said it received four complaints. Three complainants “believed the ad failed to illustrate the risk of the investment” and “challenged whether it was misleading.” One complainant “challenged whether the ad took advantage of consumers’ inexperience or credulity,” the regulator detailed. “We considered that consumers would interpret the...

You may have thought of finance professors at business schools as likely to be a fairly conservative lot, or at least to include a good number of them. You might think finance would be an exception to the growing political monoculture in US academia. You would be mostly wrong.   Emre Kuvvet tracked down the party affiliation of finance professors in the top 20 US departments, and wrote up the results in " Even Finance Professors Lean Left .  Berkeley has more Republicans than Chicago? I think numbers are low because so many faculty are not US citizens. It's initially striking  how many finance faculty are not even registered to vote, but I suspect that this reflects the large number of non-US citizens in finance departments.  Here come the millennials... Or, maybe Churchill was right about hearts and brains.  Journal editors:  Not even the JFE can manifest many Republicans!  Of course this is a striking amount of political diversity by the standards of...

  Graphics cards Bitcoin manufacturer Nvidia has earned $155 million bitcoin  in revenue from chips designed for cryptocurrency mining during the first fiscal quarter. The company admitted that crypto miners have also pushed sales up in the gaming products segment which remains its main market. Leading GPU Maker Reports Record High Video Card Sales Supported by Crypto Miners Announcing its first quarterly results for the fiscal year 2022, Nvidia revealed its total revenue rose 84% in Q1 that ended on May 2. The record high $5.66 billion figure, which exceeded preliminary expectations, comes from the company’s gaming, data center and professional visualization platforms. Surging demand for graphics processing units (GPUs) during the pandemic, along with the growth of AI applications have played a major role, but so have booming crypto markets. While $155 million of the total have been attributed to crypto-specific chips, Nvidia also admitted that cryptocurrency miners...

  Iranian President Hassan Rouhani has announced that cryptocurrency mining is banned in Iran, effective immediately. The ban, which will last until Sept. 22, is imposed as many cities in the country are facing major power blackouts. Iran has banned bitcoin mining effective immediately, President Hassan Rouhani said on Wednesday in a televised speech at a cabinet meeting. He was quoted by the media as saying: The ban on the mining of cryptocurrencies is effective immediately until September 22. Many cities in Iran are facing major power blackouts and the government has blamed power cuts on cryptocurrency mining, drought, and rising demand for electricity in summer. Bitcoin News recently reported that Iran will shut down licensed crypto miners in peak hours of power consumption. Blockchain analytics firm Elliptic estimates that around 4.5% of all bitcoin mining takes place in Iran. The firm said income from mining has allowed “the country to circumvent trade embargoes and earn ...

Luis Garicano has just posted a very interesting free e-book, " Capitalism after covid: Conversations with 21 economists. " I was honored to be one of his interviewees, video here . Luis has a VoxEU column summarizing conversations, and twitter thread if you like reading such things. Luis is a great interviewer.  This is not an endorsement of all the ideas! Luis found a wide spectrum of ideas, and I think that is the strong thing about the project. You can see how really smart people, on top of the latest academic research, come to still widely different conclusions about the current state of affairs and directions we should go. Though Luis is a pretty free-market Chicago guy, he did not impose that view which I find admirable.  In particular, referring to the VoxEU column, I would take issue with  The bulk of the shock was absorbed by the public sector budget.  That the world could produce such a massive, coherent, and rapid economic response to the pandemic had a...

Adrian Woolridge wrote a thought-provoking essay titled "Meritocracy, Not Democracy, Is the Golden Ticket to Growth ," advertising a forthcoming book.  Meritocracy, the secret sauce of growth?   To Woolridge, meritocracy is the secret sauce of prosperity:  The surest sign that a country will be economically successful is not the health of its democracy, as some liberals like to think, or the leanness of its government, as some free-marketers imagine, but its commitment to meritocracy. Singapore is a soft authoritarian power. But it has transformed itself in a few decades from a poverty-stricken swamp into one of the world’s most prosperous countries, with a higher standard of living and a longer life expectancy than its old colonial master, because it is perhaps the world’s leading practitioner of meritocracy. The Scandinavian countries have some of the world’s largest governments and most generous welfare states. But they retain their positions at the top of internationa...

  Source . Everyone seems tired of covid. And sure, inflation, debts, "infrastructure," competing voting narratives and so on are more fun. But covid is still with us.  The graph summarizes what I've read in lots of news stories: vaccination is slowing down. There is plenty of supply, but we are running in to people who do not go get the vaccine.  This strikes me as a tragedy. (Disclaimer: this is an exploratory post, and I'm anxious to hear about it from more knowledgeable people). It means covid will remain with us as an endemic disease, occasionally breaking out as immunity fades and covid evolves. We're on the 20 yard line, folks, it's not time to punt. I'm pretty darn libertarian, but not about vaccinations. The US should be pushing for near universal vaccination. This is like finishing your dose of antibiotics.  We do not have to jump to compulsion. Can we at least allow  incentives?  Vaccine passports sound like a no-brainer even to a libertarian....

  All pre-covid. European GDP per capita fell in the decade following the financial crisis. US growth was nothing to write home about, but things could be worse. The we-should-be-more-like-Europe crowd has some explaining to do. (The Word Bank's software misplaced the UK label; it is the red line on the top of the European group.) From the World Bank , HT Marginal Revolution . The graph is in dollars, so part of the effect is that the dollar got more valuable relative to the euro. (Thanks to the commenters who noticed that I misread the graph caption. Blog post now fixed to reflect that.)  Update A correspondent sends along the following graph from IMF data. IMF data uses PPP adjustments, not straight conversion to dollars. So the exchange rate really is an issue in comparing US to EU growth.   Relative inflation has not been that different between the two countries.  At least by these measures, EU inflation has been only very slightly less than US inflation  ...

I gave the UCSD economic roundtable lecture Friday June 11 on inflation and the future of the Fed. It summarizes quickly a number of themes from previous Grumpy writings, and if you enjoy videos you might find it fun. Youtube link  in case the above embed does not work.  I happened on the New York Fed website , proclaiming on its landing page that it is now "...dedicated to understanding and finding solutions to the numerous forms of inequality that communities of color experience and working with communities in our District to address deep-seated inequities,"  in case you want documentation that the Federal Reserve is taking on inequality and racial issues.  Slides available here . 

This spring's spurt of inflation clearly already means one thing: The end of "the end of inflation."  For 25 years inflation has seemed stuck on a downward trend. Those of us who worry about it seemed like end-of-the-world sign-holders that couldn't leave the 1970s behind. It's hard to buck the trend. A famous economist advised me to give up studying inflation -- inflation is 2%, he said, that's all you need to know. Apparently a new constant of nature.  Well, apparently not. Inflation can happen, and there is an economics of inflation. Right now it's pretty obvious -- supply constraints both natural and artificial, coupled with rampant demand.  Nobody is really sure where it will go. See the IGM survey  for a good indication of how wide sensible consensus is on the issue. Maybe these are just temporary shocks, supply bottlenecks, a one-time price level rise from stimulus. Maybe it is the beginning of the 1970s, when exactly the same excuses were offered...

  Banks to Companies: No More Deposits, Please , says the puzzling headline at WSJ.  Why would bankers not want to take any amount of deposits, park them in reserves at the Fed or short term Treasury bills, charge fees and a slight interest spread, and sign up for an early tee-time at the local golf club? Sure "net interest margin" or other metrics might not look good, but money is money and more money is more money.  The answer:  Top of mind for many big banks is a rule requiring them to hold [sic] capital equivalent to at least 3% of all assets. Worried about the rule’s impact during the pandemic, the Fed changed the calculation in 2020 to ignore deposits the banks held at the central bank, but ended that break this March. Since then, some banks have warned the growing deposits could force them to raise more capital, or say no to deposits. This is a fascinating little insight into the crazy world of our Fed's risk regulation.  Taking deposits and investing in ...

 The latest inflation numbers are out, up 0.64% from April to May (7.7% annualized), on top of 0.77% (9.2% annualized) from March to April. . To get around the base controversy, I like to plot the level of the CPI:  The graph suggests that  "reflation" from the pandemic recession was over last year, we had been back to the usual growth, and now we're embarked on something new.  Inflation is not the same everywhere. For another purpose I broke inflation down to durable goods and services.  Until about 1985, the three categories moved together. After that we saw a sharp divergence. Inflation depends on what you buy. Services got much more expensive, while durable goods actually saw deflation. The forces are familiar. The rise in skill premium has meant that people got more expensive, and some of that reflects also the rise in cost of businesses such as health care and universities which may have more to do with government payment. Durable goods got cheaper, thank ...

From the lovely Minneapolis Fed website that computes probabilities from option prices.  

What about Japan? It's a question I often hear from advocates of fiscal expansion. Japan has huge debts and no crisis or inflation (so far). Doesn't that prove the US can borrow a ton more money painlessly?  I offer two new points today: 1) Not every high debt country is so happy. 2) Just what did Japan get for all its fiscal stimulus? Indeed, I will start asking "What about Japan?" Japan seems a tough case for those who advocate that fiscal stimulus will save us from secular stagnation, or that huge spending programs bring prosperity in other dimensions.    1. Picking and choosing Here, fresh from the April IMF Fiscal Monitor   is the list of top 30 countries sorted by debt to GDP ratios. I boldfaced larger countries.  Yes, Japan is up there at 256% of GDP. The champion is Venezuela however. Sudan and Eritrea are not particularly known for economic prosperity. Greece and Italy are not held up as examples to follow either. Serial defaulter Argentina is behi...

A correspondent asked for comment on the new ESG trend among asset managers. For example, BlackRock , and the recent Exxon upheaval with two new green directors ( here , but cautionary WSJ coverage here , pointing out how empty the whole Exxon affair really is).  I'm sad to see even Vanguard (which has a lot of my money) going along on this...trend.  Could you offer some thoughts about the trend of asset managers voting more critically this year? Are the big fund firms like BlackRock getting too far removed from the wishes of their customers? Other analysts say that BlackRock and other ESG-minded fund firms are only following the wishes of their younger investors who care more about those themes, maybe that makes it all ok? My answer:  As a private property fan, if the owners of a company want to spend its money on pointless virtue signaling, or important but unprofitable save-the-planet and cure-racial-injustice initiatives (depending on your point of view), ...