By Carlos Guillen
After a trading session that was simply unbelievable, today equity markets are having difficulty staying in winning territory. The Dow Jones Industrial Average made an early move to the upside, but then gave up gains and is now struggling to make a comeback.
The Dow made a gain of almost 193 points by the end of yesterday's trading session, which put the Dow back above the infamous 16,000 level. However, the irony of it all is that the reason for the rather sharp gains was the same reason for the sharp losses back in January, and that reason is ... yes you guessed it, tapering. As we saw yesterday, Janet Yellen gave her first public remarks as chair of the Federal Reserve in the central bank's semi-annual testimony before Congress on monetary policy. When all was said and done, the conclusion was that the Fed is basically staying the course, no different than the path Ben Bernanke had set forth, but investors took to stocks, driving the Dow higher.
Today there were some bits of good news from abroad, as the Bank of England raised its growth forecast as well as the German ministry. The Bank of England raised growth forecasts for 2014 again, predicting 3.4 percent economic growth rather than the 2.9 percent expected in November. As such, the bank hinted that rates could start to rise from record lows in little more than a year as a rapid recovery brings the economy closer to operating at full steam. Over in Germany, its economic ministry slightly raised its 2014 economic growth forecast for Europe's largest economy to 1.8 percent from an earlier estimate of 1.7 percent, citing strong domestic demand. The combination of better growth expectations in Germany and in the U.K. should bode well for the entire euro region, and in turn for us as they are among our largest trading partners.
Over in China there was also good economic news as the world's second largest economy reported some stronger than expected trade data for January, with exports rising 10.6 percent and imports increasing 10.0 percent. However, there was not a lot of attention paid to this data as it was perceived to be noisy given lunar New Year distortions.
In all, it is encouraging to see that the so called market correction was short lived, and the Dow looks to be on track for more gains this week, that is unless retail sales, initial claims, and sentiment data derail the recent upward trend.
The Strange Tale of Dogecoin and the Jamaican Bobsled Team
By David Urani
You've heard of Bitcoin by now, but it's not the only digital currency out there. There are actually a number of so-called cryptocurrencies that operate similarly to Bitcoin, but with Bitcoin being one of the earliest and most popular. One of the more fascinating stories of the Winter Olympics is how the Jamaican bobsled team got there. They actually got to Sochi by receiving donations through a relatively new cryptocurrency called dogecoin. Sit tight because it gets weirder...
You have probably also heard of the internet sensation of memes, which is simply taking a picture (usually funny) and adding a couple of comments to it. One viral meme is a picture of a Japanese man's Shiba (left) who took internet forums by storm (don't ask me why), and was called Doge. In December 2013 dogecoin was officially created as a method for internet users to tip each other and it has caught on in places like Twitter and Reddit. After only a couple months of existence, dogecoin now has a market capitalization of about $90 million in circulation, which makes it the fourth largest cryptocurrency (Bitcoin is the largest at a $144 billion market cap) and growing fast. In fact, the value of dogecoin has risen by about $40 million just in the last two days after a Chinese exchange began trading them for yuan. At its current value, a dogecoin is worth about two tenths of a cent.
Going back to the Jamaican bobsled team, they're back in the Olympics now for the first time since 2002. But initially Winston Watts and Marvin Dixon, the duo driving the sled, didn't have the $40,000 they needed to buy new runners for their sled and to travel to Sochi. The internet community caught word of this and a pledge drive began on Reddit.com. Whether folks gave them money because they watched Cool Runnings too many times or simply out of the goodness of their hearts, who knows, but it happened. Actually, there was a strong enough response to raise $178,000 at which point the Jamaican bobsledders told everyone to stop, as they didn't want to be greedy; they had raised plenty. And now you can see Watts and Dixon compete in the two-man bobsleigh event starting February 16, as the only two competitors representing Jamaica in this year's Olympics.
As for whether you think dogecoin is a wonderful idea borne through the goodness of peoples' hearts, or an abomination that illustrates the dangers of digital currency in the global economy, that's up for you to decide.