David Bowie Bonds: Musically Inspired Financial Innovation

As the world mourns the death of David Bowie, born 8 January 1947 named David Robert Jones, and passing away 10 January 2016 due to cancer, many are remembering the man’s music and iconic nature. It may be the hallmark of the truly great artists that they confound, challenge, and ultimately not only gain acceptance but shape society’s perceptions in process. While the musician David Bowie is being praised for his innovation, it went far beyond music alone. Bowie’s innovation also found its way into the world of finance. David Bowie Bonds, or Bowie Bonds, were an early example of asset-backed bonds (or asset-backed securities). Issued in 1997, the Bowie Bonds were debt securities whose cash flow payments were backed by the royalties generated from the back catalogue of 25 albums (with 287 songs) David Bowie had recorded between 1969 and 1990. What was essentially the securitisation of intellectual property ...

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Bank Deposit Tax Dumped for Australian Depositors

Speaking in Canberra on Tuesday 1 September, Prime Minister Tony Abbott has formally stated that the much talked about plans to impose a tax, or levy, on bank deposits in Australia has been officially dumped. The proposed bank deposit tax in Australia is no more and never made it to fruition. In a media release from the Liberal Party, the following was offered: “Labor’s Bank Deposit Tax would have penalised Australians for being financially responsible. “This Government is in the business of protecting Australians’ savings – not raiding them.” The plan to tax bank depositors’ funds was viewed as critically flawed, and misaligned with incentives for promoting economic and financial stability within the banking system. Although scrapping the proposed bank deposit tax will leave a shortfall of A$1.5 billion in projected budget revenue for the Australian Government, it is also A$1.5 billion less savers will be paying out in tax. ...

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Bitcoin – Buy or Sold?

Bitcoins in Brief Bitcoins are a virtual currency, created approximately four years ago.  They are exchanged digitally via encrypted codes over the internet.  They represent a decentralised and experimental currency that is not reliant upon governments.  To buy Bitcoins, the payments must be irreversible; and exchanges are made anonymously. The supply of Bitcoins is effectively fixed, with people mining them electronically by having their computer decrypt codes.  This can only continue until the year 2040, and there is a self-imposed limit of 21 million on the number of Bitcoins that will ever exist. Money and Economics 101 The basics of what defines any money, often takes into account three key features that are to be satisfied.  Foremost money must be a medium of exchange, in that it can buy goods and services.  Money must be a unit of account, in that it represents a record of what is owed or ...

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