Chart of the week: avocados and bitcoin are in sync

”Correlation is not causation” is a dictum well worth bearing in mind when it comes to finance: just because two variables appear to be linked it does not mean that one causes the other.

There is a correlation between Bangladeshi butter production and US stockmarket returns, but it would be unwise to base your assessment of the latter on the former. An amusing new spurious correlation is between the price of bitcoin and Mexican Hass avocados, as John Authers notes on Bloomberg.
They have nothing to do with each other beyond “superficial price action”. In fact, they are heading in different directions. The avocado market is coalescing around the Hass variety; cryptocurrencies are splitting into “ever-proliferating” new coin types.

“Executives carry on adding to their [huge] bonuses in spite of widespread opprobrium… [They] are behaving in much the same way as the leaders of trade unions did in the 1970s… If government tried to rein them in… trade unions would threaten strikes. If government challenges executives today they say they will take their companies and tax revenues abroad. The effect is the same, government and society are stuffed. Institutional shareholders do not put meaningful pressure on company boards because their self-interest does not allow them to; they pay themselves outrageously… Employees in union days… went along with the disruption caused by union bosses because they could [secure] pay increases. Again, why should they call them to account? Society will revolt… But like the union leaders in 1979, the executives think they are invulnerable.”
Anthony Hilton, Evening Standard

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