Category: Law
Big data for dogs?
From Ireland:
Legislation requiring all dogs to be microchipped is to be introduced by Minister for Agriculture Simon Coveney.
Mr Coveney told the Dáil it would take some time to put the necessary regulation in place and there would be a proper consultation process to ensure it was done right and was cost-effective.
He said microchipping would apply across the board, as it did already with dog-breeding establishments and the greyhound industry. “We cannot have different standards applying depending on where a puppy happens to come from,’’ he added.
Mr Coveney said he wanted a central database to know how many dogs there were in the country. “Accordingly, if there is a case of a stray dog, or one which has suffered cruelty or was abandoned, we can then establish who owned the dog and take appropriate action,’’ he added.
The link is here.
Rob Reich on philanthropy and what foundations are good for
From Boston Review, you will find his stimulating essay here. Excerpt:
I believe there is a case for foundations that renders them not merely consistent with democracy but supportive of it.
First, foundations can help to diminish government orthodoxy by decentralizing the definition and distribution of public goods. Call this the pluralism argument. Second, foundations can operate on a longer time horizon than can businesses in the marketplace and elected officials in public institutions, taking risks in social policy experimentation and innovation that we should not routinely expect to see in the commercial or state sector. Call this the discovery argument.
Do note that some parts of Reich’s essay are more critical of foundations than this. Behind the main link, the column “Forum Responses” provides numerous comments on Reich, you can find mine here.
What to look for in the Cyprus deal
1. Output on the island could easily decline by 25% or more, and I don’t think that will involve much subsequent mean-reversion. There will be a deflationary shock, an uncertainty shock, an “austerity shock,” a credit contraction shock, and a few other negative shocks as well. The Cypriot government will not be fiscally well situated to support the safety net or automatic stabilizers.
2. It’s never a good sign when a deal is structured so that no one has to vote on it. (Correction: various European legislatures may be voting on it, but no one in Cyprus.)
3. The deal itself still doesn’t cough up all the money, but rather relies on subsequent tax increases and privatizations to come up with at least another billion euros. Believe it or not, the numbers don’t add up.
4. “This was not a good weekend for Russian billionaires.”
5. I wonder if the two main banks even have the money they claim they do. Who tells the truth going into a deal like this?
6. Capital controls in Iceland are expected to remain in place at least through 2015, which would make seven years (and counting). That is a better run country with lots of fish and aluminum smelting. You can expect the same or longer from Cyprus, and that’s assuming this deal can last that long, which I doubt.
7. ELA assistance is now, all the more obviously, contingent rather than certain. Who would keep their money in the “good bank” which is being folded into Bank of Cyprus? Why would anyone do this? Given a shrinking economy, surely this bank cannot afford to pay very much to retain deposits, since rates of return on domestic assets will be negative and capital controls will limit or prevent investments in foreign assets.
8. The capital controls will have to be strict. What will the price of a Cypriot euro be, relative to a German euro? 50%? I call this Cyprus leaving the euro but keeping the word “euro” to save face. And yet they fail to reap most of the advantages of leaving the euro, such as having an independent monetary policy.
9. Given that the nation is uh…corrupt, and the account holders are very often money launderers (duh), how effectively will those capital controls be enforced? Won’t the banks end up drained, one way or another? Of course remittances will need to be sent abroad to purchase “essential services,” right? Who picks up the tab for the total collapse of all the banks? Won’t the euros that are left depart Cyprus altogether?
10. Next up may be Slovenia…
Addendum: A summary of the deal is here. And here are some very good comments. Here are more details on capital controls.
Are driverless cars illegal?
Here is a long, 99-page article (pdf) by Bryant Walker Smith suggesting the answer might be “yes.”
My argument is less subtle than those in the footnotes of the paper. Try running a driverless car in Fairfax City, or Alabama for that matter, while sleeping in the back seat with your feet up. See what happens when you drive by an alert policeman. (By the way, if you are asleep will your driverless car respond to the police siren and pull over?)
Let’s say you sit at the wheel while the software drives, you still are pulled over, and given a ticket for “reckless driving.” You show up in court and the judge asks you what regulatory inspection or safety process your equipment has been through. I am not saying you will always lose the case or indeed always will be pulled over, but your vehicle is no longer a reliable source of hassle-free transportation, no matter what statutory arguments you may make on your behalf.
There are different notions of the word “legal,” but from a practical point of view what the police will let you get away with is surely relevant. It seems to me that your protected sphere here is quite small.
For the pointer I thank Jerry Brito.
The evolution of Russian holiday mobility
Recently Ms Loftus has seen more requests like the last one – clients with, as she puts it, “jurisdictional issues”. For a small but growing number of elite Russians, travel opportunities are increasingly limited. The trend was epitomised by the US Magnitsky act, which late last year imposed a US visa blacklist and asset freezes on roughly 60 Russians suspected of human rights violations. Its open-ended wording leaves open the possibility that the list of names will lengthen. The EU looks set to eventually pass similar legislation.
Meanwhile, the uncertain fate of Cyprus, once the favourite playground of Russia’s wealthy for its unbeatable combination of sea, sand and flexible approach to financial services regulation, may yet strike another holiday destination off the list.
In Soviet times, only the elite could travel. Today, it is the reverse: almost anyone in Russia can afford a week or two in Turkey or Egypt, but in some cases the foreign holiday dreams of the rich and powerful have been clipped, leaving them with few options.
And:
Then, there was the mysterious caller who asked for “a holiday in a non-Interpol country” on behalf of his boss, who he would not name.
I wonder how good a trip that could be? (I very much enjoyed Taiwan, but have never visited Kiribati.) The full FT story is here.
Russian markets in everything
According to this story in Canada’s National Post, cops in Moscow have been ordered to inspect ambulances after learning that VIP commuters are riding around in “ambulance taxis” that cost as much as $200 per hour.
These aren’t just ordinary ambulances, either. They’ve been cleverly fitted with fancy and luxurious interiors so their passengers can eat caviar and sip champagne while they blow through traffic with lights and sirens blazing.
Open banking resolution in New Zealand
The excellent Eric Crampton sends me this by email:
NZ’s wound down the temporary deposit insurance we had in place post 2008 in favour of Open Banking Resolution: freeze a part of all deposits, keep the banks open, liquidate the shareholders and unsecured creditors, then (if necessary) haircut the depositors.
The Greens here have been comparing it to Cyprus, which is obviously rather different.
Anyway, if interested:
RBNZ: http://www.rbnz.govt.nz/research/bulletin/2007_2011/2011sep74_3HoskinWoolford.pdf
http://www.rbnz.govt.nz/finstab/banking/4933917.html
TVHE critique (on credibility): http://www.tvhe.co.nz/2013/03/21/political-equilibrium-obr-and-deposit-insurance
Me: http://www.offsettingbehaviour.blogspot.co.nz/2013/03/deposit-insurance.html
A 10-yr old piece by then RBNZ Deputy Governor, now U Canterbury Vice Chancellor, Rod Carr, on related topics: http://www.rbnz.govt.nz/speeches/0104984.html
Here, the Reserve Bank distances its policies from those of Cyprus.
U.S. government regulations for virtual currencies
Here is part of one summary:
The major boon from the document for Bitcoin is this: users get off lightly. In fact, FINCEN does not intend to touch mere users of virtual currency at all; the document states, “a user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB under FinCEN’s regulations. Such activity, in and of itself, does not fit within the definition of “money transmission services” and therefore is not subject to FinCEN’s registration, reporting, and recordkeeping regulations for MSBs.” The document also offers protection from “prepaid access” laws that regulate gift cards and the like, saying that “a person’s acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies.” Finally, even exchanges are safe from “foreign exchange” regulation, the set of rules governing businesses that offer exchange between two or more national currencies.
The regulations are here, and the pointer is from Jeff Garzik. On the topic, there is a very good short essay by Eli Dourado.
Sylvia Nasar is suing Columbia
A tenured professor at Columbia’s Graduate School of Journalism and co-director of that school’s business program filed a lawsuit on Tuesday accusing the university of misdirecting $4.5 million in funds over the last decade.
The professor, Sylvia Nasar, who is the John S. and James L. Knight professor of business journalism at Columbia and the author of the book “A Beautiful Mind,” which inspired the movie of the same name, charges in the suit that the university mishandled funds from a $1.5 million endowment provided by the Knight Foundation to improve the school’s teaching of business journalism.
The full story is here, but here is a bit more:
Terms of the agreement called for Columbia to pay the professorship’s salary on its own, and use foundation funds for additional salary and benefits, like research…
In 2000, the university hired Ms. Nasar…According to the lawsuit she was given a base salary, which the university paid for out of Knight Foundation funds, and was asked to pay most of her additional expenses out of her own pocket.
Ms. Nasar said in the suit that over time she spent $174,000 of her own money for research and other expenses. She is asking for punitive damages.
Ms. Nasar said in an interview that in September 2010 she had received an e-mail from the university listing more than $70,000 in what she described as “phantom I.T. charges” — expenses attributed to her that she says she never incurred.
Data on the sequester and defense
From Sober Look, here is an index of defense stocks plotted against the S&P 500:
Of course you can read this as simply suggesting that the sequester, or parts of it, will soon be reversed, and/or some parts of the sequester were not that fearful in the first place. There is more here.
A short history of bank deposit levies
In July 1992 Italy’s Socialist Prime Minister Giuliano Amato imposed a one-off levy on bank accounts. It was a mere 0.6% in comparison with Cyprus’s scheme, and it still left a lasting scar on the country’s financial psyche. In 1936 Norway experimented with a bank deposit tax, but it caused an exodus of cash from the country. There are also some Latin American examples (Brazil in 1992, Argentina at the turn of the millennium) but most were combined with capital controls, and were last-ditch efforts to rescue the financial system when all else had already been tried.
That is from Edmund Conway, here is more. From Carola Binder, here is a history of capital levies in fiscal crises, and via Google here is what Hungary did in 1920.
A few Cyprus questions
Week-to-week, holiday-adjusted, how much will Cyprus gdp go down? Is it the case, as it seems so far, that the small (and large) depositors take a whack and the senior credit holders are spared? Does that set a precedent for future bail-ins?
How much nicer will the other EU countries be to Merkel now? To her face? Behind her back? How many more votes does she win in September?
What counts as “good news” or “bad news” coming out of Cyprus? Let’s say things go badly. That could cause market panic and contagion and of course misery among the Cypriots (and Russian oligarchs). Depositors might pull out of Greek and Spanish banks to a much greater extent.
Alternatively, let’s say the economic transition from the “Cyprus deposit tax” is relatively smooth and orderly. Will not some other countries start wondering whether their transition out of the euro also would be relatively smooth and orderly? Keep in mind that, as it stands, Cyprus is suffering deflationary effects, bank closure costs, capital controls, yet without getting the redenomination benefits and independent monetary policy benefits of leaving the euro. If that appears “OK” (do note however that Cyprus is spared the burden of creating a new currency), won’t the notion that leaving the euro is practical after all start to spread? Which could cause bigger bank runs than if the Cypriot transition goes badly?
Can good news end up being bad news? Or vice versa? What would Jeff Ely say? What would Garo Yepremian say?
Addendum: There is much more of interest here. And a good critique from Schumpeter here.
The author calls it “Irony corner”
…the destination of choice for Russian money looking to escape into an EU jurisdiction is now apparently Latvia
There is much more, which is an excellent overall survey of the Cyprus situation. Here two additional sentences of interest:
If the infliction of losses on small depositors has a purpose, it’s probably to reassure the Russians that they are not being discriminated against. Yes, I may have thrown up a little in my mouth typing that.
There is, by the way, a local bank holiday Monday, although on Twitter I already am seeing reports of queues forming in front of banks in Cyprus and the “drying up” of ATMs.
File under: “No longer too small to fail.”
The Cyprus surprise
Announced Friday night of course:
Final details being inked on
#Cyprus bailout as we speak. Most significant measure: 9.9% levy on bank deposits over €100,000, says source.
That is from Peter Siegel. (Addendum: and here is more information.) I believe that is not the full deal (do depositors get some kind of equity claim?) and there is more information to come. Elsewhere, all four games were drawn in the Candidates Match for the right to play against Anand for the world chess championship. It will be interesting to see who makes the next move.
p.s. I don’t like to give investment advice (other than “diversify” and “buy and hold”), but if you have any deposits in Cyprus banks, I would recommend asking yourself whether you are sure that this is the final haircut or step one in a series.
*With Charity for All*
I am a fan of this book. The author is Ken Stern and the subtitle is Why Charities are Failing and a Better Way to Give, with emphasis on the former I would say. Here is one excerpt:
The CBO study and other reporting on the practices of charitable hospitals did in fact spur reforms efforts, including a proposal in Congress to require a minimum uncompensated care rate of 5 percent in return for tax-exempt status. All the major proposals, however, have been beaten back, with reform advocates having to settle for greater public reporting obligations for charitable hospitals on the theory that greater transparency would ratchet up pressure for change. It hasn’t worked. A 2012 nationwide study found continuing low levels of uncompensated care, only 1.51 percent on average, a number less than half the profit margins for the same group of hospitals.