POITOU, FRANCE – It was a slow Labor Day weekend.
We spent the time visiting with neighbors and tying up loose ends on our renovation projects.
Then, yesterday, a daughter arrived from California. She brought bad tidings from the film industry…
“Everybody’s depressed in LA because the movies have been so bad.
“Every once in a while, I guess the producers just miss the mark. Wrong kind of films. Wrong time. Or just bad flicks. This Labor Day weekend was the worst flop in 20 years.”
We turn to Bloomberg for more precision:
The credits have rolled on Hollywood’s worst summer in a decade, closing out with a dismal Labor Day weekend that was the first in a generation without a big, new movie opening in wide release.
Old-timers in Hollywood have an expression that works for just about everything: “Nobody knows anything.”
With 30 years of experience… and millions of dollars of “skin in the game”… even the best of them often guess wrong about which films will be box office successes.
Win-win deals don’t always make the world a richer place. On the other hand, win-lose deals never do.
Back on our farm, we’ve been fixing up the gatehouse.
This weekend, we repaired the handmade kitchen cabinets and repainted the windows.
It’s barely worth the effort since the gatehouse rents for so little money – only $300 a month. Still, it’s important to have someone living there – to discourage win-lose deals (aka scare off thieves).
“Did you hear what happened to [a nearby castle]?” began a now-familiar conversation. “They cleared out everything.”
The castle was the last place we thought would be robbed. It is protected by a moat! But clever thieves used a small boat to cross the water… broke into the house… opened the gate on the bridge… and drove up in a van.
The “pregnable fortress” in the French countryside
They put up ladders to make it look as though they were painting. Then, in broad daylight, they systematically emptied the house of everything of value.
“[The owner] is heartbroken. They have been in that chateau for 1,000 years,” continued our informant. “And the thieves took the family silver… and portraits of ancestors that were hundreds of years old.
“They were not good paintings; the grandmothers were pretty ugly. The thieves just wanted the frames.
“And they took everything out of the family chapel, too – the candlesticks, the cross, and even the altar. It’s sad. Why bother to keep something in the family for all those generations if someone is going to steal it from you?”
But the biggest win-lose deals are those forced upon us by the federales.
Yesterday, for example, the Chinese authorities acted on their much-anticipated crackdown on cryptocurrencies by banning “initial coin offerings,” or ICOs (see Market Insight below).
These are the cryptocurrency equivalent of stock market initial public offerings, or IPOs. But instead of selling shares to the public to raise money like regular companies, crypto startups raise money by selling cryptocurrencies. Investors buy them because they believe they’ll go up in price if the crypto startup is a success.
Bitcoin tumbled the most since July after China’s central bank said initial coin offerings are illegal and asked all related fundraising activity to be halted immediately, issuing the strongest regulatory challenge so far to the burgeoning market for digital token sales.
The People’s Bank of China said on its website Monday that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalizing legal violations in ones already completed. The regulator said that those who have already raised money must provide refunds, though it didn’t specify how the money would be paid back to investors.
It also said digital token financing and trading platforms are prohibited from doing conversions of coins with fiat currencies. Digital tokens can’t be used as currency on the market and banks are forbidden from offering services to initial coin offerings.
Will this be the end of bitcoin?
In 1933, the U.S. government successfully banned private ownership of gold when President Roosevelt signed Executive Order 6102, “forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States.”
For 40 years, the yellow metal was out of circulation.
What if you can’t use bitcoin without risking jail time? What if you can’t convert your cryptocurrencies into regular, government-issued paper? What good is a better form of money if you can’t use it?
Again, nobody knows anything.
BY CHRIS LOWE, EDITOR AT LARGE, Bonner & partners
Are cryptos headed for a bear market?
Or is this just a bump in the road?
Today’s chart is of the total value of all crypto coins in existence – the crypto “market cap” – which plunged 19% since news broke yesterday of the Chinese clampdown on initial coin offerings (ICOs).
As you can see, the value of the cryptocurrency market fell 19% before rebounding slightly by 6.3%.
That’s close to bear market territory, which is widely defined as a 20% drop from a peak.
But it’s by no means the largest drop this year.
Between June 10 and July 11, the crypto market fell 39% – roughly double the recent plunge.
– Chris Lowe
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In today’s mailbag, readers consider if the president is capable of enacting real change.
I don’t understand why so many of your readers are so angry about your Trump assessments. You have stated all along that the swamp is too big and powerful for any one man to defeat. You have also maintained that the swamp critters won’t allow for any significant change. Then, when Trump signed on the Goldman Groupies and the Military Moochers, you rightfully pointed out that the swamp had already won with one set of critters being replaced by another.
By the way, why do people only see the flaws of the “other” party and members and not their own? Why is it that members of the “other” party are viewed as “the enemy”?
– Bryan B.
I’ll say first – I tend to agree with you. I’m seeing, however, you’re getting a lot of flak for “dumping on Trump.” Your critics say you’re blaming “one man.” Ah, but they are the ones who wanted to elect their “king.” We have three branches of government. The one that should matter is the legislative branch, though the legislators long ago abandoned any responsibility.
The president’s job is to run the executive branch, not lead the country. Remember that definition of insanity: “Doing the same thing and expecting a different result.” Well, we overwhelmingly elect the incumbents, then expect change. We can’t have “the same” and “change” together. The people have chosen – we get what we deserve.
– Scott P.
For many years, I have told many people that the president has no power to do anything. The president is just someone to point fingers at and complain about. The Obama nation wasn’t even smart enough to dream up Obamacare, or any of the other things that got put into place during his administration. The problem is those in higher places. I read the Diary and I like it.
– Richard S.
Meanwhile, more discussion on the Houston floods.
Your assessment of the flooding at Houston was brilliant. I never would have dreamed it was government interference that led to so much destruction. Here’s something else…
Kent Moors claims solar power is growing 50 percent annually and that the planet will be totally converted to solar power in 10 years. We should see an 80 percent drop in hydrocarbon production. At that point it won’t matter if global warming is real or not; we just won’t have the greenhouse gasses. I sure hope I’m right. Keep up the great work.
– Gary P.
The significant flood damage in these Southern states, along with all the other factors in our economy, will most likely result in the long-expected economic cataclysm.
The extensive flood damage will generate lots of insurance claims for replacement and repair in the commercial and housing markets and in auto replacement. I expect many, many insurance claims. Insurance companies will need immediate cash. If the insurance companies invest heavily in bonds, they will likely need to sell bonds to generate cash to fund their claim obligations. This will cause the big economic drop that has so long been anticipated. I think we will see this within the next month. Financial bubbles will pop like popcorn en masse, I think.
– Chester K.
Thank heavens climate change is only a hoax. Think of what it might have been like if a slightly higher air temperature meant the air could hold even more water.
– Andrew C.
Greetings from Canyon Lake! I left Houston on Thursday evening and have been in this area since. As I understand it, returning to Houston is not yet an option. One friend had 65 inches of rain measured close to his home. I am about 65 inches tall. He and his wife had to leave their home, as it had 7 feet of water standing in the living room.
It turns out that all of our problems today can be traced back to a failure in following the Master’s instruction as laid out in the Bible. By now, many of the products we use and rely on for our daily sustenance are not Father-approved. At the end of the first 6 days in creation, He clearly stated that “it was good.” People are not capable of improving on what God created. There is always a downside for even attempting such a thing, sometimes extreme. When correction is slow at coming, it becomes harsher as time goes by. Things might look good, sound good, and even appear to be better for a while. But, they do not stand the test of time.
– Chester K.
In one week, tech giant Apple will reveal the iPhone 8, and it’s expected to have a host of new features like wireless charging and 3D face scanning.
Colleague and tech expert Jeff Brown recently identified three small-cap tech companies that are helping Apple make these new features a reality. And once the iPhone 8 is revealed, these little-known tech suppliers will be primed to skyrocket. Get all the details right here.