Thursday assorted links

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1. It's interesting which "good trading locations" remained so, and which did not. Tyuma lost to Gelanggi which became Singapore? Sapa is Manila? Hong Kong and Macao straddle the path to Guangzhao?

Yo, it's a good map but I saw this, like, a year ago...

Heck, if you want interesting maps on a regular basis, just follow this guy on Twitface.

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4 - I didn't view YouTube as social media.

I rarely go there for movie clips.

"Ich Hatt' Einen Kameraden" is soldier funeral music/song. It is still there.

"Erika" was a German Army marching song and several films and series of photos were on YT with the singing. I see they have censored the ones showing German soldiers marching and in action. I can abide with that.

Churchill, “You will never know war until you fight Germans.”

Churchill, “You will never know war until you fight Germans.”

I suspect the Prussians would be rather disappointed if they were to observe the current German military. This is not to say that the Krauts are incapable of being roused slash motivated. But apparently the one thing that unifies them is anti-Americanism. (This is not to imply that I wish for a more militaristic Germany.)

Well the Prussians were the militaristic ones, the quote should have been "You will never know war until you fight Prussians". It's only under Prussian leadership that Germany became known for battlefield prowess. Prussia existed as a core component of Germany until after WWII when it was obliterated along with its militarist tradition.

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3. There are no banks in the Libra Association, so one might conclude, no, banks don't want Libra. Indeed, Libra (and crypto generally) could undermine one of the banks most profitable sectors: banks reap billions in fees annually by issuing credit cards, acting as merchant processors/acquirers, and providing other commercial and retail payment services in a complex payments system. There are many payment networks in the Association, including PayPal and Stripe, two companies in which Peter Thiel is a major equity owner. I'd put my money on Thiel. On the other hand, banks and governments are deeply intertwined (remember the bank bailout in 2008), so I would not expect governments and banks to view Libra as something they want.

As Cowen noted a couple of days ago, Facebook's stock price is up 44% this year in spite of lots of adverse publicity; by comparison, Google's stock price is only up a couple of percentage points. The stock price has hardly moved since the Libra announcement. One has to wonder if purchasers of Facebook stock that have driven up the stock price this year had insider information about Libra. Just asking. [The Libra price effect was already baked in the cake when Facebook made the public announcement, which explains why Facebook's stock price has hardly moved since the Libra announcement.]

If one had purchased FB on June 18, 2018 (one year prior to Dr. Cowen's cite of 44% rise 2019 YTD was based on a week after the Christmas Eve 2018 Stock Market Massacre - the ultimate Fed rate rise), one's FB investment balance would have been down by 4%. Today, DJIA and NAS are approaching all-time record highs.

Party Like It's 1999!

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Go ask the American Bankers Association.

Banks Just Want To Have Fun.

Many "things" contributed to the 2008 financial catastrophe. One, I think, was nontraditional players [like Merrill, Brown Brothers, Goldman Sachs, Lehman Brothers, many more] bursting upon residential and commercial real estate, credit markets, which contributed to the bubble: pushed lower loan interest rates and concomitantly appraisals' market capitalization and discount rates, which ,in turn. pushed higher market prices and loan amounts.

I don't see a crypto-currency scheme as similarly affecting/bursting into the credit card and merchants' payments economies/markets. Plus, Mark Zuckerberg and his gang of gangly geeks don't have a clue.

Like I said, I'd put my money on Thiel. He is a big investor in Bitcoin (he owns a mining company) and he knows about payment processing (he is a co-founder of PayPal and an original investor in Stripe - he made the investment after meeting with the Collison brothers, who gave Thiel a point-by-point critique of PayPal). I'd be surprised if Thiel wasn't an advisor to Facebook in connection with Libra.

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An unrecognized contributor to the 2008 problem was the smart phone, or, rather, the expense of its contracts. People that faced financial difficulties for one reason or another had 3 monthly payments that had to be made, mortgage or rent, car payment and phone contract. Many of them were willing to walk away from their housing expenses but absolutely could not give up their car or smart phone. This was a new situation and one that certainly added on to the housing problems that spawned other economic issues.

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Since I can't read the piece, I will just ask: is this the right question? I would think Libra might be a bigger threat to credit card companies and payment processing companies like Paypal. I'm not sure BofA needs to be all that worried. Am I wrong or not?

PayPal and Stripe knocked out Discover, MasterCard and VISA - NOT. FB and Libra will not dent one bank.

If crypto-currency and payment processing or whatever it is, were so magical, guys that know about such things like Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley likely would be on it. They ain't the brightes, but . . . it should be obvious.

It's like electric cars. A certain genius that knew nothing about auto manufacturing took a bunch of investment bankers' money and money he made capitalizing net income from stuff like Paypal and Stripe and voile! You have Tesla. One way or the other, we'll see how that urns out when the real-deal auto companies jump in; when the government ends subsidies; and when TSLA runs out of virtue-signalers with excess of $70,000 burning holes in their pockets.

Again, Party Likes It's 1999.

JPMorgan and 200 other banks are part of its blockchain network. Here's an older list:

https://www.ledgerinsights.com/jp-morgan-blockchain-network-banks/

Bank of America is taking the patent angle to blockchain:

http://fortune.com/2018/06/20/bank-of-america-blockchain-patent-why/

Citigroup teamed up with NASDAQ for blockchain payments:

https://www.citigroup.com/citi/news/2017/170522a.htm

Every major bank is pursuing something in crypto but their vision, execution, and culture will give varying results.

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If the banks invest in Libra they get the exact equiv value in Libra token back. If those assets remain with the banks, through fractionalization they can create more money. Why would they give up the privilege to create money??

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1. This map is awesome and reminds me of the 1st century AD, peak Roman empire, "Periplus of the Erythraen Sea" (literally Periplus of the Red Sea in Greek). https://en.wikipedia.org/wiki/Periplus_of_the_Erythraean_Sea

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5. Glenn Greenwald wrote an article for Cato on Decriminalization of Drugs in Portugal (this was long before Edward Snowden and The Intercept). https://www.cato.org/publications/white-paper/drug-decriminalization-portugal-lessons-creating-fair-successful-drug-policies

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The map is nice, but in many places quite inaccurate. It raises an important point, however, about ancient trade and its proliferation.

Please tell us how it's inaccurate.

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#5 seems to me that the only sensible workable option is complete legalization of all drugs (and medicine except antibiotics BTW).

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#4 +1, favorite line: "important to hold accountable the person behind the screen, as much as the screen itself"= is the "screen" a third-party entity in our information exchange? Seems like there would be more opportunity to project our own stuff.

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Banks are likely fine with libra.

The real fear ia AppleID. AppleID has pure digital bearer asset capability, it can connect to JPM new, telegram, Apple new, and any of the many automated lending facilities. AppleID works fine on Amazon, and no third party banks needed.

AppleID has no reason to connect to FDIC banks, except to withdraw cash, permanently. AppleID scares the crap out of Hal Varian because it eliminates his game of fitting adds onto our computers, we can buy off the ads with direct payment to bloggers.

Apple will transform their iPod into the universal hand held point of sale terminal, it transacts with anything digital with privacy guarantees.

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"Under the Portugal model, "problematic" drug users are routed into a system of government-sponsored treatment & social services (see p. 241-5 of Chasing the Scream)."
I am curious, do American libertarians envision legalizing drugs with or without such a massive social safety net? I mean, among those who acknowledge that drugs may cause certain problems besides the ones related to their being illegal.

The idea that decriminalization of drugs would not have serious negative effects on society is insane. Portugal doesn't have a good idea what to do with the unemployable drug culture in their country either.

The problems that are inherent to drugs- basically everything that comes with addiction- are present whether drugs are legal or illegal, but in the latter case we add a bunch of legal problems to the mix. And yes, some manner of robust safety net is necessary the handle those problems. Under the illegal option we are mainly using prison for that safety net, but prisons are hugely expensive, so we ought at least consider if there's a cheaper option.

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#4...I am pro-social media, but I uphold a set of business rules that it must conform to. It's simply a matter of keeping the playing field as free and fair as possible, and the businesses themselves cannot be allowed to set the rules. Notice I emphasized rules.

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#4 It isn't really a question of "social media, yes or no." There are too many divergent forms of social media, with their own costs and benefits for that.

What I think this piece misses is that you can have social media, and try to improve the choice architecture, in a way that reduces measles outbreaks, etc.

Much better to end my sorrow
And die the death of the tomb.
And though my wish is to end my life, my reason tells me no,
And hands me back my gloomy life
In terror of that after time

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#3 The kid went through a stage where he was buying and selling t-shirts, tennis shoes. He actually built up a fair profit on a PayPal account where he lied about his age. That worked for him until he was stiffed on a sale, he came to us, and we determined he had no recourse. A not too expensive lesson. (The kids use "gift" transfers to each other, without a PayPal cut, so of course no one can be "cheated.")

Maybe that's a glimpse of a Libra future? Sure you *can* send funds though the Internets, without banks or intermediaries, but should you?

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5. Yes, the drugs come into US from Mexico via China or Cuba. And no one wants to stop people at the Souhtern border because it is "oppression." And we have millions of drug addicts that should be handled like a little ass of a country in Europe. And this is a great idea because some academic read about it.

How does throwing drug addicts in prison help them?
That sounds inhumane and expensive.

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Believe it or not we do stop people at the southern border. And also at the northern border. Both customs and the INS maintain agents at both borders. There are even secondary checkpoints on the southern border some miles inland on the major highways.

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#5
In Portugal, all drugs are decriminalized. If a law enforcement officer encounters someone using drugs, the officer sends the user to a "Dissuasion Commission" (...) "Non-problematic" users are given advice & educational material about the drugs they are using. "Problematic" users are referred to addiction treatment services.
As a Portuguese, I am surprised we got something right. I don't know what the perfect solution is, but putting people in prison is definitively not the solution.

leaving them to rot in forgotten communities to raise a new generation of addicts is very humane I guess

Are the children of addicts necessarily addicts? I think we need some serious research on that one. There may well be a genetic link to addiction, but it doesn't seem to be simply hereditary the way blue eyes are. Alcoholism is an easily observed example.

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Assumes cartels would make more money but I don't see how this is a given. Their costs would increase because of competition and regulation (purity controls etc.) and the prices they could charge would decrease as supply increased. Would be interesting to know how this aspect played out on the smaller scale in Portugal.

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