1. The underlying technology, blockchain, might have uses but a currency isn’t it
2. Many crypto experts were surprised when governments said that profits from trading in digital currencies were taxable in the same way that as any other capital gains. Why would this be a surprise?
3. They also claim that it’s great because it’s decentralised. Except, a few companies do a vast percentage of all business meaning that in reality it’s not very well distributed
4. Much of traditional financial services is not centralised either. There’s no “exchange” for currency trading, for example
5. The lack of regulation in crypto is considered an advantage, right until the point that one of the few exchanges (see above point about decentralisation) is in trouble and stops accepting sell orders. Regulation is there for a reason
6. Decentralisation is supposed to democratise trading. Except, trading in crypto is surprisingly expensive. And, just like traditional finance, quickly gets complicated
7. And it’s slow
8. Many of crypto’s biggest promoters are economically illiterate
9. It’s basically a pyramid scheme
10. Many crypto “experts” claim that it’s possible to reduce the risk of transactions with certain complications. They tend not to use the word “hedging” which is what this is. It’s something that the “old-fashioned” financial services companies have been doing for ever
11. It’s almost like they don’t understand traditional financial markets
12. They says it’s progressive and about freedom, but it entrenches existing hierarchies, if anything, more effectively than the existing systems
13. Except for the use of blockchain, there’s not a lot that’s new. For traditional financial services, regulation means that the worst scams are banned for retail inventors. The “Wild West” of crypto isn’t a feature
14. And no, this piece is not intended as a defence of the traditional financial services companies or their regulators. They are far from ideal

Share price movements are kind-of-sort-of-rational but not always intuitive. For example, when Apple has a big keynote and announces some significant product, everyone expresses surprise that the share price goes down straight afterwards. Even many smart people get this wrong (“It isn’t based on logic and reason” – The Talk Show episode 53). I hope to explain why the price dropping actually does make sense in this post.

In doing so I’ll likely make some errors. Some of those will be deliberate simplifications. In other cases I’ll probably just be wrong. But either way, I think the gist, if not the details, should give you a good idea of what’s going on.

• The Myth of Japan’s Failure – “Japan has succeeded in delivering an increasingly affluent lifestyle to its people despite the financial crash. In the fullness of time, it is likely that this era will be viewed as an outstanding success story.”
• Man Embraces Useless Machines, and Absurdity Ensues – Technology: making life simpler.
• Merry – Sat here with my newborn son and wife, with all my family staying nearby, this post rang bells. It’s sometimes important to realise what you have.

• Is Rick Perry a 21st-century Galileo? – No.
• Jobs Will Follow a Strengthening of the Middle Class – …or why “trickle down” economics — where the rich get tax cuts and everyone else magically benefits — doesn’t work.

• exactly – “What if it’s a big hoax and we create a better world for nothing?” Looks like we’re not going to find out because of a few hold-outs…
• A Typeface for the Underground – Design and typography on the London Underground. Fascinating stuff.
• Britain to Levy a One-Time Tax on Banker Bonuses – “To a large extent the levy underpins a quite broad understanding here — even among those generally sympathetic to the industry — that bank profits this year were largely subsidized by the government due to historically low interest rates.” The best discussion I’ve seen of today’s pre-Budget speech is, bizarrely, in a US paper.

• Anatomy of a feature – Great post describing how hard it really is to add a supposedly easy feature.
• The Matrix, but with money: the world of high-speed trading – Good introductory piece about algo trading and the technology used to implement it.

• Evolution Test – I just don’t get it. Is evolution really that hard? How can you misunderstand it so badly that you can come up with this list of questions and think it proves… well, anything? (Part of me hates to single out this site as there are dozens, if not hundreds, of similar ones.)
• Crash Could Free Up Wall Street’s Grip on Bright Young Minds – “But the big paychecks came with what economists call opportunity costs. Instead of spending their days searching for exotic trades, some of these Wall Street wizards could’ve been creating drugs, imagining software, or solving energy problems.”
• The Norway Lesson: The Benefits of Good Financial Behavior – “Norway made it a point to budget, to save, and to protect against unnecessary risk. Then, it went on to buy when everyone else was selling.” Any other country would have spent all earnings from oil on tax cuts (that’s what happened with North Sea Gas in the UK), but Norway did the smart thing.

• Banking disaster man honored by the Queen – The man who lost the personal data of 25mm people is rewarded with a CBE. Does that make any kind of sense? Anywhere other than the civil service he’d lose his job!
• Paris and Berlin ban cafe smoking – Definite progress. Does the reference to Nazi policies in Germany prove that Godwins Law (“As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one.”) also applies to the real world?
• The Electric Car Conspiracy … that never was – Interesting film. Given the spread of Smart cars here I have to think that there would be consumer demand for electric cars, which only leaves the conspiracy…

To most readers here I think I’m right in saying that the [Markets in Financial Instruments Directive](http://en.wikipedia.org/wiki/MiFID “MiFID”") won’t mean much. It’s some new Europe-wide legislation designed to help regulate financial transactions.

Stop yawning. Please. Come back! This isn’t going to be completely dry and boring, honest.

So, anyway, one of its major elements is a concept called “best execution.” This isn’t a choice between a firing squad or a noose. The idea is that a trader has to be able to prove that they made the best deal, with the right people, at the best price. (On a serious note, I think this is a sensible idea, I’m just not convinced that regulation is the right way to achieve it.)