It's coming home. Football that is. Tonight England face Croatia for a place in the World Cup Final. If England lose tonight what will happen the stock market tomorrow? A paper by Alex Edmans and co-authors find that markets decline after football losses. For example, they find that a loss in the World Cup elimination stage leads to a next-day abnormal stock return of -49 basis points. Why? The idea is simple. Stock prices are driven by things like mood and sentiment. A loss by a national football team has a negative impact on national mood and affects the trades made by investors the next day. England lost on penalties to Germany on 4th July 1990. The FT30 index fell by 1.2% on 5th July. I feel a new World Cup song coming on - 'Football hurts your portfolio'!
According to Robert Shiller , speaking at Davos, Bitcoin is a perfect example of a bubble - story here . Shiller sees Bitcoin as a backwards step in the evolution of money. George Selgin , a free banker, takes an opposing view - click here . Although he doesn't believe that Bitcoin is money, he sees its development as a fascinating turn in the evolution of money. In particular, he lauds the fact that Bitcoin production is constrained and cannot be infinite. There is a short video below where Bitcoin explain how it works.