Excellent about Bitcoins. Tulips, England’s South Sea Company and France’s Mississippi Company
Shell companies called special-purpose acquisition companies—also known as SPACs, which list on a stock exchange and then buy target companies—have raised more than $100 billion this year
In the 2008-2009 financial crisis that nearly took down the entire U.S. financial system was a boom in collateralized debt obligations (bundles of risky mortgages) and credit default swaps (insurance deals on risky mortgages.)
What stands out about financial innovation during bubbles is that new instruments become devices for speculation and excess. The problem might be when investment in the vehicle is fueled by a surge in borrowing. “Leverage is the killer,” Willem Buiter said.
WSJ 7 May 2021
Willem Buiter, helicopter money and Article 123 of the Lisbon Treaty
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