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Warren Buffett embraces capitalism, rejects socialism at Berkshire annual meeting – Yahoo Finance

Berkshire Hathaway’s annual meeting — dubbed Woodstock for Capitalism — chairman Warren Buffett dispelled any doubts about his commitment to the free market democracy.” data-reactid=”15″ type=”text”>At Berkshire Hathaway’s annual meeting — dubbed Woodstock for Capitalism — chairman Warren Buffett dispelled any doubts about his commitment to the free market democracy.[Click here for coverage of the 2019 Berkshire Hathaway…

Warren Buffett embraces capitalism, rejects socialism at Berkshire annual meeting – Yahoo Finance

Berkshire Hathaway’s annual meeting — dubbed Woodstock for Capitalism — chairman Warren Buffett dispelled any doubts about his commitment to the free market democracy.” data-reactid=”15″ type=”text”>At Berkshire Hathaway’s annual meeting — dubbed Woodstock for Capitalism — chairman Warren Buffett dispelled any doubts about his commitment to the free market democracy.

“I’m a card-carrying capitalist,” the legendary investor told shareholders on Saturday.

“I believe we wouldn’t be sitting here except for the market system and the rule of law on some things that are embodied in this country,” Buffett said. “So you don’t have to worry about me changing in that manner.”

Buffett’s remarks appeared to push back against a groundswell of anti-capitalist sentiment, and come amid a wide ranging debate about whether a free market democracy is working for everyone.

Several of the proposals floated by 2020 White House contenders involve massive government intervention in vast sectors of the economy.

Against that backdrop, a number of wealthy individuals have also suggested that capitalism is in crisis, or in dire need of root-and-branch reform.

A rejection of socialism

With an estimated net worth north of $80 billion, Buffett is frequently mentioned alongside Amazon (AMZN) CEO Jeff Bezos and Microsoft founder Bill Gates as one of the wealthiest men in the world.

However, he’s has supported progressive-leaning policies and backed Democrat Hillary Clinton in the 2016 elections. Most recently, he teamed up with Bezos’ and JPMorgan Chase CEO Jamie Dimon on an initiative to lower health care costs.

In a recent interview with Yahoo Finance’s Andy Serwer, Buffett also bemoaned the growing problem of income inequality—a hot topic in the burgeoning field of Democratic presidential candidates.

Yet at Berkshire’s (BRK-A, BRK-B) shareholder meeting, Buffett rejected the idea that the world’s largest economy could eventually turn socialist, as some have posited with the rise of politicians like Queens congresswoman Alexandria Ocasio-Cortez.

Vermont Senator Bernie Sanders, a self-described socialist, is one of the top contenders in the crowded Democratic primary.

“I don’t think the country will go into socialism in 2020 or 2040 or 2060,” said Buffett, whose thoughts were echoed by his longtime business partner, Charlie Munger.

“I think we’re all in favor of some kind of government social safety net in a country as prosperous as ours,” Munger told the audience. “What a lot of us don’t like is the vast stupidity with which parts of that social safety net are managed by the government.”

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    Credit: David Foster/Yahoo Finance

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    Bitcoin Jesus Roger Ver Destroys Lightning Faithful Tone Vays in Debate

    Bitcoin Jesus Roger Ver Destroys Lightning Faithful Tone Vays in Debate

    Bitcoin Jesus Roger Ver Destroys Lightning Faithful Tone Vays in DebateOpinionRoger Ver may be a hyperactive personality who occasionally alludes to Bitcoin Cash as being “a version of Bitcoin,” but he does know what he’s talking about. | Source: (i) Shutterstock (ii) Shutterstock ; Edited by CCNBy CCN: Let me start by saying I’m undecided on the issue of blockchain scaling. I think both camps make valid points. The day that Bitcoin Cash launched was the logical resolution of a drawn-out war which would never have ended otherwise.Tone Vays Can’t Make Up His MindThat being said, I watched this debate between Roger Ver, one of the earliest angel investors in bitcoin, and Tone Vays, a bitcoin personality, and I felt like I was watching a professor debate a teenager.Ver may be a hyperactive personality who occasionally alludes to Bitcoin Cash as being “a version of Bitcoin” (a semi-acceptable stance given that they largely share the same transaction history and most properties), but he does know what he’s talking about.On the other hand, Vays claimed that he uses Bitcoin every day and frequently pays just five cents to send transactions.This doesn’t stand up to reality.You will pay less than a cent to send a transaction on Bitcoin Cash. It’s one way to save money when you’re exiting an exchange. In a previous era, you could use Litecoin for the same purpose. But in a previous era, average fees on Bitcoin did not range over $1.When we say “average fees” here, we refer to fees spent to get a transaction included as intended – as soon as possible. Nobody uses digital currency because they want the recipient to wait hours or days to receive it. The instant settlement of crypto payments is one of many value propositions.Scaling Is Not A ReligionVays fell back on circular logic.First, he says fees were not as high as Roger Ver claims. In this he is correct. You don’t have to pay $3 to send a BTC transaction in a reasonable amount of time.However, then Vays makes an absurd case for himself, one that diverges significantly from the design of our economic system and a healthy blockchain. Vays says:“If you really need it on-chain, you will have to pay a higher fee. Which, actually, I don’t mind paying a 20-cent fee. I like supporting the miners which are keeping our system secure.”First of all, 20-cents is less than the average fee at press time. The average transaction fee over the past 24-hours was around 50,000 Satoshi, or $4 at current prices.But anyway, we are to expect most users to want to “support the miners”? What a joke. Honestly.This is a bankrupt argument and also circular in that it undermines the last 60 seconds or so of his argument.Vays had just said that we will be using Lightning Network for everything, the purpose of which is to reduce fees and allow for more transactions. Miners make less in the long run in a scenario where Lightning Network is supreme, less than they would if more on-chain transactions were allowed.Decentralization Still Matters, BroThen another core issue of Bitcoin economics comes up: sovereignty.The only way to be truly sovereign in the Lightning Network is to operate your own node. Not a particularly easy task. It’s certainly not realistic to expect there ever to be millions of personal nodes operated by millions of personal users.Instead, what you will have are a few major service providers.If you are okay with this, that’s fine. But Ver makes an obvious point: the SPV wallet system currently used by Bitcoin Cash and Bitcoin, which was for the longest time the best way to run a lightweight wallet because you would own your keys while not having to own a copy of the Bitcoin blockchain, is by far more decentralized than a Lightning-centric system.I have to say that most Bitcoin Cash proponents I’ve spoken with, including Honest.cash founder Adrian Barwicki, accept that there will one day come a need for second-layer scaling of Bitcoin Cash. The main contention is that we should not artificially force that to happen by having blocks that are arguably smaller than they have to be.Luke-Jr recently made the case for small blocks at the Magical Crypto Conference, and his arguments are at least sound if lacking in realist strategy.
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    Traders are piling into bitcoin as a haven against volatile markets. This researcher warns they could get burned.

    Dan Kitwood/Getty Images Bitcoin isn’t a ‘unique’ hedge as it’s vulnerable to the same market risks as conventional investments, according to a new study. It becomes more exposed to factors such as inflation expectations when its price is less volatile, the researcher found. The findings are a “cautionary note” for investors, writes author Dimitrios Koutmos,…

    Traders are piling into bitcoin as a haven against volatile markets. This researcher warns they could get burned.

    hedge mazeDan Kitwood/Getty Images

    • Bitcoin isn’t a ‘unique’ hedge as it’s vulnerable to the same market risks as conventional investments, according to a new study.
    • It becomes more exposed to factors such as inflation expectations when its price is less volatile, the researcher found.
    • The findings are a “cautionary note” for investors, writes author Dimitrios Koutmos, as they suggest bitcoin isn’t “a unique asset class whose price behavior is detached from economic fundamentals.”
    • Watch bitcoin trade live.

    An escalating US-China trade war, the slowing Chinese economy, and a prolonged Brexit process have fueled anxiety in financial markets, boosting investors’ interest in bitcoin as a hedge against volatility.

    However, new research suggests the cryptocurrency may have limited value as a hedge as it’s vulnerable to the same factors that move the prices of stocks and other mainstream investments. While it escapes some of those drivers when its price is especially volatile, the increased risk may outweigh the greater returns.

    “Bitcoin prices, despite their seemingly attractive independent behavior relative to economic variables, may still be exposed to the same types of market risks which afflict the performance of conventional financial assets,” wrote Dimitrios Koutmos, an assistant professor of finance and technology at Worcester Polytechnic Institute in Massachusetts, in a study titled “Market risk and bitcoin returns” published online in the Annals of Operations Research this month. 

    Koutmos used treasury bill rates, the VIX and Deutsche Bank FX volatility indexes, treasury yields, forward inflation swap rates, equity indexes, and the difference between corporate bond yields and treasury yields as proxies for short-term interest rates, market-volatility expectations, and other factors that affect traditional financial assets. He examined their influence on daily bitcoin prices between January 2013 and September 2017.

    His key finding was that several of these factors were “important determinants of bitcoin returns.” Specifically, short-term interest rates and investors’ expectations of stock-market and foreign-exchange volatility were significant determinants of the price of bitcoin during periods when it rose or fell sharply. Those three factors, along with general economic conditions and inflation expectations, influenced the price of bitcoin when the cryptocurrency was less volatile, according to the study.

    The findings serve as a “cautionary note” for investors, Koutmos wrote, as they suggest bitcoin isn’t “a unique asset class whose price behavior is detached from economic fundamentals.”

    They also indicate “bitcoin’s usefulness as a diversification instrument is time-dependent,” given the cryptocurrency was more susceptible to factors such as inflation expectations during periods when its price was less volatile. 

    If bitcoin truly is a better hedge when its price is moving around, investors who bought into bitcoin’s price surge this month as a hedge against the sharp downturn in stocks might be feeling pretty smug. However, Koutmos also found that bitcoin’s superior returns during periods of high volatility weren’t high enough to offset the increased risk, meaning its returns during low-volatility periods were higher on a risk-adjusted basis. 

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