All Articles Finance Modern Money While You Were Working - April 18

While You Were Working – April 18

VIX manipulation speculation re-ignites, cryptocurrencies and the MOS problem, UBS and Credit Suisse lead the way, A cool head in the clouds, and is housing still a wise investment?

4 min read

Modern Money

Southwest Airlines

The pilot of Southwest Airlines flight 1380 proved to be the coolest customer. (Karen Bleier/AFP/Getty Images)

More smoke emanating from the VIX manipulation fire?

Joe Rennison over at the Financial Times remains hot on the trail of alleged VIX manipulation.

The VIX has been in the spotlight since it blew up during the market volatility back in early February. The Cboe says nothing is amiss and says some of its biggest clients agree. However, today saw the VIX spike more than 10% after a $2.1 million options bet was placed on the S&P 500 dropping 50% in the next month. While such a bet might seem “outlandish,” it wouldn’t be for someone trying to move the VIX.

Then again, if the S&P 500 tanks 50% in a month, manipulation of the VIX will be of relatively little concern to market participants.

Cryptocurrencies and the MOS problem

In the media biz an MOS interview is when a reporter simply approaches any random man on the street and asks them questions about a particular news event or topic. Most journalists hate conducting such interviews, but as Jay Leno used to prove in his “Jaywalking” segments, such interviews can be informative (and entertaining).

One of the biggest challenges cryptocurrencies face is that the random man (or woman) on the street can’t really describe what a cryptocurrency actually is. Nor do they understand where cryptocurrencies come from. With various other commodities, an MOS can understand that there is a certain price for oil, oranges, corn, cattle, etc. because there is a certain amount of those commodities that is accessible in the marketplace at any given time. Whether it is mined out of the ground, grown on trees, or bred in barns, the natural origins of those commodities each makes sense.

The same can not be said for cryptocurrencies.

By buying a bunch of really expensive computers and putting them in some locale where energy costs are low, cryptocurrency miners can just make new coins out of thin air.

And if you think the MOS test doesn’t matter to the future of cryptocurrencies, I’d urge you to go back and watch the spectacle that was Facebook boss Mark Zuckerberg testifying before Congress last week. Some of those lawmakers, who play a role in crafting laws that govern things like the internet and financial markets, revealed in rather shocking fashion how little they understood about how Facebook worked. How easy do you think it will be for them to wrap their minds around something like the cryptocurrency mining process?

UBS and Credit Suisse team up on back office

I have no idea why more firms don’t do this to cut their back-office costs. There are only so many way to do the very same thing.

Is housing still a good investment?

It turns out it depends on who you ask. Well, not really who you ask, but where they live. US consumers in the West feel the most bullish about housing as an investment, while those in the Northeast are a bit more skeptical.

This gave me chills

I am the son of a former air traffic controller, so I always have a special level of appreciation for when things go awry in the skies and a cool-headed pilot saves lives. It is certainly sad that one passenger was killed when one of the engines on Southwest Airlines flight 1380 exploded yesterday, but this audio of how calm Captain Tammie Jo Shults remained throughout the emergency is simply amazing. Kudos to Shults and to the air traffic controllers and other pilots who cleared her path into Philadelphia.

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