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The world’s most valuable retailer, Alibaba, carries no stock. The world’s largest taxi company, Uber, owns no cars. The world’s most popular media conglomerate, Facebook, creates no content. The world’s largest accommodation provider, Airbnb, owns no property. Something's up.  The creation of intangible value through internet assets has been a popular trend in modern history. In the past this has led to disastrous vicious-cycles, (similar to positive-feedback-loops), that can cause an economic system to descend into chaos.
Speculation on the value of internet assets was what caused the .com bubble of 2000 to inflate - burst. The bubble that popped in 2000 was an asset price bubble that resulted from the explosive stock market growth as the internet emerged. Another period of rapid tech development is almost upon us; in the future it will be referred to as the Machine Learning, AI, and/or Quantum Computing revolution. Having said that there's the possibility of enormous technological growth in the near future, I'm not saying it will happen tomorrow. The United States could very well end up in another recession if the economy doesn't react well to the unprecedented treatment it's received from the Federal Reserve, ZIRP, etc. Irrespective of the domestic/global economic landscape, technological progress is inevitable. As time passes the electronics humans use worldwide will only get smarter, faster, and more advanced. Technological progress sees no regression. (unless you work at Apple... Iphone 6s > Iphone 7)
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ETF - Exchange Traded Fund - "A marketable security that tracks an index, commodity, bonds, or a basket of assets like an index fund."
-Investopedia In the last decade, ETF's have grown in popularity more than any other investment. The graph below shows their explosive growth.
Q2 2006 Value: $17,565,000,000,000 - Nearly 18 trillion USD$ in ETFs
10 years later +$384,120,000,000,000 (Yearly growth rate - 219%) Q2 2016 Value: $401,685,000,000 - Nearly 402 trillion USD$ in ETFs
An issue that could be amplified by ETFs larger market presence is that they can fundamentally fail.
Flash Crash's 2010 & 2015 Flash Crash Wiki In the "Flash Crashes" of 2010 and 2015, ETFs became unhinged from their underlying "value". Both instances were partially caused by HFT (High Frequency Trading). "Bids on dozens of ETFs, and other stocks fell as low as a penny a share" -WSJ (^talking about 2015) Related Reading In Complex Adaptive System Theory, a Cascading Failure is when the failure of a part causes the failure of successive parts. (Domino Effect) Both flash crashes were cascading failures in financial markets. Regulatory measures taken to prevent another ETF issue are insufficient.
Source: Moskowitz, Dan. "Overview of VelocityShares TVIX | Investopedia."Investopedia. Investopedia, 13 Apr. 2015. Web. 11 July 2016.
If anymore of the EU's big supporters drop out, the probability that the EU falls apart completely rises dramatically. That's why your eye as an investor should be on the Netherlands, Germany, Spain, and France; as they are the four biggest constituents of the Euro Zone, each with proportionately distributed fee's / immigrants / risk, all three of which are discussed in the Brexit Prediction Blog .
(JB3 Investments first online blog post, 6/20/2016). I've come to multiple conclusions after consulting the reputable European data set, the "STANDARD EUROBAROMETER 77 PUBLIC OPINION IN THE EU – SPRING 2012 ". (available online with free download). Irrefutable Connections show a very similar political/social situation in the UK in 2016, based on trend's reflected in data from 2012. These same trends appear to be influential in Germany, the Netherlands, Spain, and France. Based on 2012 public sentiment, and data made available in hindsight, Spain and the Netherlands are decidedly more likely than France or Germany to leave the European Union. Euro Barometer Link Federal Funds Rate 1954-2016  How did the Fed respond to the Great Recession?  If a recession does occur, what will the Fed do to stimulate the economy? |
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