Jeffrey Kleintop, Schwab’s chief global investment strategist, says the broader economy has nothing to fear from a potential crash in the value of bitcoin, which has risen dramatically over the past year. “If prices for bitcoin were to plunge suddenly, because it’s so independent from the financial system, it’s kind of its own thing. It hasn’t yet become embedded in the economy and the financial structure,” he told Business Insider. Also on Kleintop’s radar for 2018: equity markets will squeak out another year of gains thanks to continued earnings growth; the yield curve will continue to flatten, perhaps foretelling of a recession in 2019; and investors looking for growth need to go outside the U.S. “Usually, in the last year or two of a business cycle, international stocks tend to outperform US stocks. They’re more cyclical, they’re more inflation-sensitive, and valuations look a little bit more attractive, too.”
Mark Cuban: Bitcoin More a “Collectible” Than a Currency
Billionaire entrepreneur Mark Cuban said in an interview this month that bitcoin and other cryptocurrencies are far from being accepted and used as other fiat currencies. The time and expense to transact using bitcoin, he said, is much worse than credit card processing, for example. But the technology mogul said the scarcity of some cryptocurrencies (there will only ever be 21.9 million bitcoins in circulation, according to the protocols of the cryptocurrency) makes them valuable. “In this particular case, it’s a brilliant collectible that’s probably more like art than baseball cards, stamps, or coins, because there’s a finite amount that are going to be made,” Cuban said. Of course, scarce collectibles are only worth what someone else is willing to pay, and there are plenty of baseball cards, stamps and other “collectibles” that have proved to be nearly worthless.
Louisiana Advisor Charged with Fraud
A financial investment advisor from Louisiana has been charged with defrauding clients of more than $150,000, using their money for personal expenses and to pay off other investors, The Associated Press is reporting. Ralph Willard Savoie was charged with one count of wire fraud by the U.S. Attorney’s Office. Savoie, who court records show is associated with Iowa-based Cambridge Investment Research, falsely told clients he would invest their money in securities and insurance and to develop industrial cooling towers. Instead, he used the money to write checks to himself, his family and to pay off others who previously invested with him. According to court filings, Savoie used part of the money on jewelry, hotels, restaurants, credit card bills, a car note and rent.