Thirty years ago, in 1992, a call to the Economics Department at the University of New Mexico was forwarded to me. The caller was TJ Trout, a local celebrity disc jockey who had the morning drive time show. He was very popular on 94 Rock radio (FM 94.1 KZRR). He had called the department looking for an economist to go on the radio and explain to his listeners what the heck Ross Perot, the independent candidate for US President, was talking about. Perot was talking about the US Government deficits and debt, and the presentation was confusing, especially when he started referring to the debt as the grandma in the basement!
As an Assitant Professor, I was at work, unlike many of my senior colleagues, and so, as the only economist in the building, the call was passed to me. Thus begun a 30 year stint on the radio, as a guest of TJ Trout, initially with 94 Rock and lately with 96.3 News Radio (KKOB).
The moniker Economist to the Stars came after being dubbed The 94 Rock Economist, and stuck around even after TJ had retired from radio, moved out of state, and then returned and rejoined the workforce with News Radio (where The 94 Rock Economist would NOT have worked.)
I was not a regular guest, more an occasional guest, but I got on well with TJ and managed to share a little economic theory and insight with his listeners over the years. Radio is tough, and I usually got to speak for about 15 minutes out of the hour, having to compete with the news, traffic and weather reports, and advertisements.
I recently decided to hang up my headphones. Thirty years was a good innings, but no more.
Previous posts about my radio days:
My Alter Ego
Talk about a rock star economist

There are two kinds of winds: strong head winds and mild head winds

Potholes and speed bumps are always located in shadows, regardless of time of day and time of year.

It is always colder than you think it is while getting dressed to ride.

You are always over-dressed for the temperature, no matter how cold it is.

If there is just one goathead on the path, your tires will find it.

There is always some driver who believes bicycles should not be on the road.

Cracks and holes in the bike path will never be filled.

You will always get a puncture the day you forgot your repair kit and pump.

I always wave or nod to other cyclists, but there is always one who refuses to wave or otherwise acknowledge your existence. I pity their miserable lives.

The day you forget to wear cycling gloves is the day you will go down hard and put your hand out to save yourself.

I don’t know how many times I’ve committed to re-ignite this blog slash website. And this time might be like all the others where I make a couple of posts and then let it all slip. The only saving grace for me, and eternity I guess, is that the internet is forever (so they say) and my blog will live on in its completeness albeit in some dark, dusty corner never visited.

Now as I approach retirement, in my “trial run” as it were, I want to write more, read more, talk more, think more, and rest more. It might seem odd for an academic – someone who has spent the last 40 years doing all those things, except for the rest, on a daily basis, to want more of those things in retirement. Only time will tell if I succeed. But here, today, I commit to the attempt at least.

if you are lucky!
And today I learned that one of favorite woods to make spinning tops from – Lignum Vitae – belongs to the same family as one of my most hated organisms, the goathead or puncture vine. These two plants/trees belong to the family Zygophyllaceae or Caltrop family of plants. Lignum Vitae, or Guaiacum officinale, is an incredibly dense and oily wood that uniquely turns green as it ages, making it a wonderful wood to use in spinning tops because of it’s ease of working, weight, and color. Goatheads (Tribulus Terrestris) on the other hand are the bane of cyclists everywhere. As they dry out and separate from the plant they are easily moved by the wind, or animals on to the bike paths they surround.

A Lignum Vitae spinning top:

Goatheads:

There’s lots of talk about NFTs these days, because they use blcokchains, the technology undergirding cryptocurrencies, and there can’t be anything more exciting these days than cryptocurrencies. All this chatter encourages some people to consider investing in NFTs.

Traditionally, assets are what we invest in, and securities are financial assets. Bonds and shares in companies are securites. In the simpllist way, and most basically, securities are claims: a share is a claim to the profits due to owners of a company, a bond is a claim to be repaid, and possibly earn interest on the loaned amount. Investors buy shares and bonds because they expect the claim to be valued at least as much as what they paid to buy those claims. They expect some positive return on investment.

This is how a share works, for example. The company issues shares to raise capital. These shares offer a claim to a share (!) of the profits (or losses which are just negative profits) of the company to the holder. The company has the money, which presumably they will use to guarantee those future profits for the owners/shareholders of the company. If the company does well, it will make more profits, now and in the future, and the share value of the company will increase. This increase in the value of the share will be reflected in a higher price for the share and a positive rate of return on the investment of the shareholder-investor. What I’ve just described is the basic tenet of equity investing, and of course there are many variations including shorts, options, and other derivatives. All, however, can be tied back to some real productive assets owned and used by the company to undertake economic activity and generate profits.

Now, how does a NFT work? First, what is a NFT? It’s a non-fungible token, and the important word there is token. The non-fungible part just means it’s unique and can’t be copied easily. Most definitions you’ll read for NFTs will concentrate on the NF part, ignoring the T bit. But what is a token? It’s an artifact, a convenient manifestation of a claim. For example, you go to the pinball machine and drop in a token to play. It’s not a real coin – those you exchanged for tokens at the arcarde counter – and has no intrinsive value, and cannot be used outside the arcade. The same is true for a NFT. It’s not real money, and it only has value inside the system or institution in which it was created. Back to what an NFT is. A NFT is a code in a blockchain ledger that says you “own” something. The most famous NFT is probably Beeple’s Everydays: The First 5000 Days which is described as a digital piece of art and is a collage of thousands of images created by the artist Mike Winkelmann. The NFT was sold by Christie’s auction house for $69.3 million in 2021. Now, the artwork is a digital file, available to anyone, and easily downloaded and shared. Maybe the original zillion-megapixel file is not public, and maybe it has a digital watermark on it, but the point is that’s not what the NFT is. The NFT is not the piece of digital art. Remember, it’s a token. As a token it’s a claim to something – the right to pull three balls in the pinball machine, or the right to the digital piece of art. Ah, no…that last bit isn’t true. And this is where NFTs become both weird and scary, in my opinion.

NFTs are considered assets – digital assets, financial assets, or maybe some other type of asset, by some people. They are viewd as an investment opportunity. The hope is that you can buy a NFT, and subsequently find someone willing to pay you more than you bought it for, to pocket a nice return on investment. They can be traded, just like shares and bonds, and many other financial assets. They have a price determined by supply and demand. Just as people have bought land on Uranus, investing in a NFT will only have value if the token has value, and the value of the token is determined by the supply and demand for that token. When each token is unique (the supply is fixed at one unit), the price is determined by the demand for that token, which means the price is determined by what some other person is willing to pay to own that token. NFTs might be thought of as derivates in that their value is determined, in part, by the value of the underlying piece of art, or thing, that the NFT as issued on. However, what the relationship to the underlying thing is remains unclear, and might not even exist.

If you’ve ever read about stock options, or even invested in them, they are complicated and scary financial derivatives. Complicated because there are two positions to take on two types of transaction, as well as issue date, purchase date and expiration date to add a time dimension to options. Scary because those complications make decisions harder and options are a zero-sum game.