Art (and money laundering): Swiss Government's Tough New Controls On Freeports Effective January 1

As our readers are well aware, the future of freeports is in Delaware (and Luxembourg).

Geneva Freeports
Photo via: Geneva-freeports.ch

From Barron's Penta:

Freeports in Freefall?

The crackdown has begun. After months of speculation, increased scrutiny among tax authorities and regulators around the globe, not to mention a major art fraud scandal that ensnared the opaque inner workings of the Geneva Freeport, the Swiss government just announced it was placing tough new controls on its freeports, those transit ports which have, in recent years, become maximum-security safety-deposit boxes with tax benefits.

The new regulations, which take effect in January, mark a radical departure for business as usual at the freeports where secrecy and anonymity have made them attractive destinations for art collectors storing their treasures while avoiding tax liabilities. But those very protections the freeports offer its clients have also made them vulnerable to a host of illegal activities and the stricter rules are part of the government’s broader clamp down on money laundering, tax evasion and black market trades. “With the introduction of the new amendment,” the Swiss authorities announced, “the legislature wishes to ensure the required transparency towards domestic and foreign authorities on the stored goods. In addition, Switzerland’s position in the fight against money laundering has been strengthened.”

In other words, for those who’ve secreted away their Picasso’s and Modigliani’s for years, using the freeports much like the art world’s Cayman Islands — the gig is up, at least in Switzerland. Under the new set of rules, goods stored for export will now have a six-month time limit while a host of new disclosure requirements come into play, including that owners must now declare their identity as well as the identity of anyone buying those goods destined to leave the freeports. Further, the Swiss have extended their reach, adding wine, cigars, cars, and furniture to the list of goods required for disclosure.

“This could be a total game changer,” says a former U.S. law-enforcement official who now deals with art market issues in private practice. “It could revert the use of the freeports back to how they were intended as furthering trade – instead of operating as tax-free stash houses.” Adding, “This raises the stakes considerably and will probably cause a number of collectors to rethink the ways in which they manage, store or transfer their assets....MUCH MORE

The Delaware Freeport

(Photo by Fritz Dietl)

Okay, maybe not Delaware.
However, if interested here are some of the ins and outs of the tax implications from Art Law Report:

The New Domestic “Freeports”: Sales and Use Tax Opportunities and Risks

Your mileage (and billable hours) may vary, close cover before striking, etc.

Previously:

Art: War Between the 'Freeport King' and the Oligarch and How Dmitry Rybolovlev Made a Quick $300 Million
Super Wealth: Barron's Penta Calls For Avoidance Of Geneva-style Freeports
Update: "What's the Scam? Why Did Deloitte Set Up Their Art & Finance Practice In Luxembourg?"

Possibly also of interest:
If it were a museum, some say that it would probably be the best museum in the world
"Oligarchs and Orchestras: Inside Luxembourg’s Secretive Low-Tax ‘Fortress of Art’ Warehouse"
"(Sm)art Investing: Rich Move Assets from Banks to Warehouses" ($4 trillion in 'treasure' assets)

The Official Atlantic Hurricane Season Ends Tonight

Yes, yes I've heard there is something going on in Paris but this year's get-together is all about the money and they don't even start talking about that 'til the weekend.
Speaking of money...

From Weather.com:

2015 Hurricane Season in Review: 11 Things We Will Remember

The 2015 hurricane season has officially come to a close in both the Atlantic and eastern/central Pacific basins. November 30 is the final day of the season each year, though occasionally a named storm may occur beyond that date.

Here are 11 things we'll remember from the 2015 hurricane season.

1.) Another Hyperactive Pacific Season; Atlantic Slightly Below AverageFor the second year in a row, the Pacific was much more active than the Atlantic.

The eastern Pacific had 18 named storms plus four additional tropical depressions for a total of 22 tropical cyclones. In the Atlantic, we saw 11 named storms and one additional tropical depression, bringing the number of tropical cyclones in that basin this season to 12.

Though several of them were short-lived, the 11 named storms in the Atlantic was just short of the 30-year average (1981-2010) of 12 named storms per season. Four of those named storms became hurricanes, which is below the average of six hurricanes during the same 30-year period. 

Meanwhile, the eastern Pacific's 18 named storms was above the 30-year average of 15 per season. Of those 18 named storms, 13 went on to become hurricanes, which is well above the average of 8 per season.

The central Pacific was also unusually active in 2015 with a record eight tropical cyclones forming in the basin. An additional seven originated in the eastern Pacific, later crossing into the central Pacific for a total of 15 tropical cyclones in the central Pacific basin this season.

The previous record for the number of cyclones passing through the central Pacific basin in one year was 11 tropical cyclones in 1992 and 1994. The previous record number of cyclones originating in the central Pacific was just four in 1982 – which like 2015 was the beginning of a strong El Niño.

2.) El Niño Likely Played a Role in the 2015 Hurricane Season
El Niño likely helped to shape the outcome of the 2015 hurricane season.

As mentioned before, a record number of named storms developed during the central Pacific hurricane season. This is a basin where we typically see an uptick in tropical activity during El Niño.

We also saw strong wind shear near the Caribbean Sea and other parts of the Atlantic Basin, contributing to the demise of Hurricane Danny, Tropical Storm Erika, Hurricane Fred, Tropical Storm Grace and Tropical Storm Ida from mid-August through September.

Stronger wind shear tends to appear in parts of the Atlantic Basin in a season in which El Nino has developed. When winds strongly change with height, either in speed and/or direction, convection (rain and thunderstorm activity) can get blown away from the center of a storm. This wind shear can keep tropical cyclones from forming and can rip apart any existing storms.

Hurricane Danny was a perfect example of how wind shear can take a toll on a powerful hurricane. After reaching Category 3 status in the western Atlantic on Aug. 21, Danny dissipated into an elongated area of low pressure as it entered the eastern Caribbean on Aug. 24.

3.) A Category 5 Landfall With No Fatalities...

...MORE

As Weather.com was reporting just before the start of this year's season:

No Major Hurricane Has Made Landfall In the U.S. In More Than 9 Years -- and That's a New Record

The streak continued and the insurers/reinsurers pocketed the premiums.

Russia Debates Unorthodox Orthodox Financial Alternative

From New Eastern Outlook

A significant debate is underway in Russia since imposition of western financial sanctions on Russian banks and corporations in 2014. It’s about a proposal presented by the Moscow Patriarchate of the Orthodox Church. The proposal, which resembles Islamic interest-free banking models in many respects, was first unveiled in December 2014 at the depth of the Ruble crisis and oil price free-fall. This August the idea received a huge boost from the endorsement of the Russian Chamber of Commerce and Industry. It could change history for the better depending on what is done and where it further leads.
Some 20 years ago during the Yeltsin era, within the chaos of Russian hyperinflation and IMF “shock therapy,” the Russian Orthodox Church introduced a similar proposal for interest-free banking as an alternative. During that time a gaggle of liberal pro-free-market Russian economists around Yeltsin, such as Yegor Gaider, prevailed. They instead opened Russia’s state-owned assets to literal plunder by western banks, hedge funds and corporations.

In my first visit to Russia in May 1994 to give a talk at a Russian economic institute on IMF shock therapy, I saw first-hand the lawless mafia, russkaya mafiya, speeding through the near-empty Tverskaya Street near Red Square in new state-of-the-art Mercedes 600 limos without license plates. It was a devastating time in Russia and Washington and the technocrats at the IMF knew exactly what they were doing to foster the chaos.

US sanctions focus attention

By 2014 much has changed in Russia. Most significantly, the infatuation with everything American of two decades ago has understandably vanished. The US Treasury financial sanctions were launched in stages in 1914 against specific individuals around President Putin, specific banks and corporations dependent on foreign credit. They had the effect of forcing a critical rethinking among Russian intellectuals, government officials and in the Kremlin itself.

The Washington attacks, legally-speaking acts of warfare against a sovereign nation, were initiated by the US Treasury’s Office of Terrorism and Financial Intelligence, the only government finance agency in the world with its own in-house intelligence agency. The Office was created under the pretext of going after and freezing the assets and bank accounts of drug cartels and terrorists, something it seems strangely inept at if we judge from their record regarding groups like ISIS or Al Qaeda in Iraq. It seems to be far better going after “undesireable” countries like Iran and Russia. It has offices around the world, including in Islamabad and Abu Dhabi.

Those US Treasury financial warfare sanctions and the prospect of much worse to come have sparked a deep debate within Russia on how to defend the nation from more attacks. Vulnerability to western sanctions in their banking system has led Russia, like China, to develop an internal Russian version of SWIFT interbank payments. Now the very nature of money and its control is at the heart of the debate.

Unorthodox Orthodox Proposal
In January 2015, in the depth of the financial crisis, with a Ruble at half what it had been months earlier and oil prices in a free-fall as a result of the September 2014 John Kerry-King Abdullah agreement, the Moscow Patriarchate reissued its idea.

Dmitri Lubomudrov, the Orthodox Church’s legal adviser told the media at that time, “We realized we couldn’t stay dependent on the Western financial system, but must develop our own. As with the Islamic system, the Orthodox one will be based not just on legislation, but on Orthodox morality as well, and will be an invitation to businessmen seeking security at a time of crisis.” Among its features would be interest-free credit issuance and prohibition of investment in gambling casinos or such activities going against Church moral values.

Then in early August this year the Orthodox plan for interest-free money creation gained a major added support. Sergei Katyrin, head of the Russian Chamber of Commerce and Industry, after meeting with Vsevolod Chaplin, the senior Orthodox cleric overseeing the project, announced, “The Chamber of Commerce and Industry supports the creation of the Orthodox Financial System… and is ready to provide its platform for detailed and professional discussion of these questions together with the relevant committees of the chamber.” The proposal is aimed at reducing Russia’s reliance on the Western banking system, an essential national economic security requirement....MORE

Today In Almonds: The Price Correction Is Over, Huzzah!

I suppose whether or not you huzzah! depends on whether you think the little guys are for eatin' or for sellin'.
From Agrimoney:

Drop in almond prices is over, Select Harvests says

The correction in almond prices is over, as the effects of the Californian drought rule out a supply boom from the US, according to grower Select Harvests.

Australia-based Select Harvests forecast almond prices for 2015-16 were at Aus$12 a kilogramme, compared to an average of Aus$11.45 a kilogramme last season.

Almond prices have eased by around 25% since August, although they are still higher than at any point before 2014.

Prices peakChanging consumer tastes, and increased health consciousness, has fuelled a boom in almond demand over the last few years, with increasing volumes used in dairy-free milk substitutes.

Dollar-denominated almond prices peaked in the summer of this year, having grown by more than 200% in five years.

But the slow pace of recent shipments from the US has raised fears of easing demand.

Last week, QFN Trading & Agency noted that October, the most important month of the season, saw shipments down 20%, and warned that without improved demand, or a disruption to US production, "there is no reason for prices to stop falling right now".

Demand remains in placeSelect Harvests chairman Michael Iwaniw said that despite some "buyer price resistance," the company expected "continued relatively high almond prices in the short to mid-term"....MORE

Previously:
Almonds and the California Drought (UPDATED)
Land: U.S. Orchards Again Outperform Cropland For Investment Returns
Psst, I Think They're Catching On to the Almond Racket
Noble Nuts: "Almond, hazelnut prices to rise - but not peanut values"
How Growers Gamed California’s Drought"
Lay Off the Almond Milk, You Ignorant Hipsters 
Trading the California Drought: Almonds and Water 
California Drought: Why Farmers Are 'Exporting Water' to China   
"California Almonds Saved by Diverting Water From Veggies"   
A Higher Yielding Alternative to Corn and Wheat: "Agriculture Investors Develop a Taste for Permanent Crops"
Straight Talk on Weather and Climate: "Will California's Drought Bring About $7 Broccoli?"
Projected Price Increases For Foods Affected By the California Drought
"Nut prices, elevated by weather setbacks, 'to stay high'"
El Nino Won't Come Quick Enough To Break the California Drought
U.S. Farmland Has Been the Top Performing Asset Over the Last 20 Years: Goodbye to all that
Attention Fiduciaries: Strawberry Farming Up to 9796% More Profitable Than Corn

Oh Dear, During the Pearson to Nikkei Hand-off, FT Alphaville Appears to Have Been Hijacked By A Mid-90's Rapper

Oh dear, oh dear.

FT Alphaville, up from under tha Pearson yoke…

Pizzle Murphy

 | Nov 30 16:31 | 1 comment | Share

…is hirin again.

Today, November 30, Nikkei of Japan assumed ballership of tha Financial Times fo' realz. And one of tha prioritizzles now is expandin FT Alphaville.

So we is immediately lookin fo' two or three natural writas wit a interest up in all thangs financial ta join tha FTAV crew all up in tha FT. Deadline: December 15, 2015.

At least one of these positions is ghon be based up in London n' possibly one up in New York, although we is aiiight ta hear from applicants horny bout bein based up in other financial centres.

But you’ve gots ta be able ta write. We need camera-ready prose from experienced playas whoz ass is instinctive, creative, witty n' quick. You’ll also be sposed ta fuckin know a thang or two bout financial markets, economics and/or corporate game, n' ta be keen ta learn more.

Perhaps yo ass be already a funky-ass bidnizz journalist at a qualitizzle publication whoz ass wants mo' freedom n' tha chizzle ta dig deeper tha fuck into hard as fuck subjects.

Perhaps yo ass be a part-time blogger wantin ta make tha jump ta a professionizzle media platform.

Or maybe yo ass be a IB-trained all-rounder whoz ass has decided they’d rather comment from outside tha investment bankin tent, rather than sit inside, shackled n' gagged, fo' 14 minutes a thugged-out day.

__________

FAQs

What’s tha application process?

Pin a CV n' maybe a gangbangin' freestylin example to: alphaville@ft.com. Us thugs will read n' reply ta every last muthafuckin application. I aint talkin' bout chicken n' gravy biatch. Interviews will follow, probably wit a gangbangin' freestylin test. Da process will probably take longer than you expect since it’s Xmas soon n' we’re also picky.

Will you git me a hustlin visa so I can move ta London?

Unlikely, although we will consider remote working.

Can I do tha thang part-time?

Again, we’ll consider dat yo, but FTAV be a game-fillin experience fo' dem playas whoz ass work here.

Big ‎¥?

Nope. It’s journalism.

Early starts / flexible hours?

Yes Yes Y'all yes y'all, n' yes.

Will you consider playas whoz ass have pimpin Excel game, even if they can’t write?

Nope.

When’s tha deadline again?

December 15, 2015.

This entry was posted by Pizzle Murphy on Mondizzle November 30th, 2015 16:31. Tagged wit hiring, Jobs on FTAV.

HERE'S MORE ALPHA_DOGG

(Gizoogle turned 10 this year)

Here's the original without the straight-up (albeit 20-year old) ghetto slang, know what I'm sayin'?:

FT Alphaville, out from under the Pearson yoke…

Trouble in the Oil Patch: "Crude Collapse Claims Texas Law Firm"

Following up on the post immediately below, "Apocalyptic Warning On Energy Company Defaults".
Thanks to a reader.
From the San Antonio Express-News:

Business has slowed to a trickle

A 10-year-old Texas law firm that found a gusher of legal business in the shale oil boom is closing its doors as legal work in the energy sector shrinks along with the price of crude.

Burleson describes itself as a full-service firm, but it specializes on the real estate side of the oil and gas business, including due diligence, transferring titles, and buying and selling drilling rights. As with other firms catering to energy companies, business has fallen, and Houston-based Burleson will close Dec. 31.

The firm also has offices in San Antonio, Denver, New Orleans and Pittsburgh. It closed an office in Midland earlier this year.

“It was a great run,” said Richard Burleson, who founded the firm a decade ago and saw it rise, then fall in the oil slump that has sent prices down by almost half in the past year.

“It found itself in the middle of the North American shale boom and (took off) as no one had anticipated. But then it fell as no one had anticipated, either,” he said.

Production surged beginning late in the last decade as technological innovations made it possible to pull oil and gas from dense shale formations. But the output contributed to a global oversupply, which sent prices down.

That has led producers and oil field services companies to lay off workers and cut budgets — including dollars designated for legal work by Burleson and other energy-focused law firms.

Burleson, which had as many as 140 lawyers about three years ago, now has about 60.

“It’s very difficult to sustain a firm when you are riding only one horse,” said William Cobb, a management consultant to law firms on strategic issues. It may be great when times are good, but it can be a disaster when things turn down.

Niches are fine, Cobb said, but they need to be spread across a variety of industries. A bankruptcy practice, for example, shouldn’t depend upon one or two industries. A super-niche such as land for oil drilling doesn’t leave much room for business cycles....MORE

Apocalyptic Warning On Energy Company Defaults

It's probably nothing.

From ZeroHedge:

The Energy Intelligence news and analysis creator and aggregator is not one to haphazradly throw around hyperbolic claims and forecasts. So when it gets downright apocalyptic, as it did this week in a report titled "Is Debt Bomb About to Blow Up US Shale?", people listen... and if they are still long energy junk bonds, they panic. 

The summary:

"The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices -- which few experts foresee in the near future -- an over-leveraged, under-hedged US E&P industry faces a truly grim 2016. 

How bad could things get?" 

The full report by Paul Merolli, a senior editor and correspondent at Energy Intelligence: 

Debt Bomb Ticking for US Shale 

The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices — which few experts foresee in the near future — an over-leveraged, under-hedged US E&P industry faces a truly grim 2016. How bad could things get and when? It increasingly looks like a number of the weakest companies will run out of financial stamina in the first half of next year, and with every dollar of income going to service debt at many heavily leveraged independents, there are waves of others that also face serious trouble if the lower-for-longer oil price scenario extends further. 

"I could see a wave of defaults and bankruptcies on the scale of the telecoms, which triggered the 2001 recession," Timothy Smith, president of consultancy Petro Lucrum, told a Platts energy conference in Houston last week. Much has been made about the resiliency of US oil production in the face of low prices, but the truth is that many producers are maximizing their output — even unprofitable volumes — because they need the cash flow to service their debt (related). "As an industry, we're at the point where every dollar of free cash flow now goes to paying back debt," Angle Capital's Steve Ilkay told the same conference. Ilkay, who advises North American producers on asset management, said during the boom years of 2012-14 about 55% of the sector's free cash flow, which is calculated by subtracting capital expenditures from operating cash flow, was allocated toward debt repayment.  

With West Texas Intermediate (WTI) stuck below $50 per barrel since August — and closer to $40 recently — the industry has responded with deeper cuts to capex and a greater focus on efficiency (EIF Nov.4'15). However, experts say this won't be enough to avoid a bloody reckoning with persistent low oil and gas prices, as the sector grapples with some $200 billion-plus in high-yield debt, which it absorbed to finance the shale oil boom. Credit quality has been steadily deteriorating since June 2014, when WTI peaked at $108/bbl. Standard and Poor's says there have been 19 defaults so far in 2015 across the US oil and gas industry, while another 15 companies have filed for bankruptcy. Besides those that have missed interest or principal payments, the default category also includes companies that have entered into "distressed exchanges" with their creditors, including Halcon, SandRidge, Midstates, Goodrich, Warren, Exco, Venoco and Energy XXI (EIF Jul.8'15). 

Of the 153 oil and gas companies that S&P applies credit ratings to, roughly two-thirds are E&P firms. Among these E&Ps, 77% now have high-yield or "junk" ratings of BB+ or lower. 63% are rated B+ or worse, and 31% — or 51 companies — are rated below B-. What does this all mean in layman's terms? "Quite frankly it's a lot of gloom and doom," says Thomas Watters, managing director of S&P's oil and gas ratings. "I lose sleep over what could unfold." He says companies with ratings of B- or below are "on life support," while those further down the ratings scale at C+ or lower are "maybe looking at a year, year-and-a-half before they default or file for bankruptcy." While capital markets were still open to struggling E&P firms in the first half of the year, they are closing fast as investors accept a "lower-for-longer" oil price scenario. High-yield E&P firms raised $29 billion from 44 issuances of public debt in 2014. So far in 2015, $13 billion in junk-rated debt been raised from 23 issuances — but only two have come after June (EIF Jul.29'15)....MORE

Previously:
Nov. 20
 "Thirty-six North American oil and gas producers filed Chapter 11 bankruptcies this year"
Good News! In Commodity Bear SuperCycles™ Most Of The Damage Is Done In The First Six Years
August, 2015 
Oil & Gas Bites Private Equity: KKR Looking At A $4.1 Billion Wipeout 
July 2015 
"UBS Exposes The 'Scary Reality' Of High Yield Energy"
"It’s Happening: Debt Is Tearing up the Fracking Revolution"
April 2015 
Oil: Here Come the Shale Bankruptcies
January 2015
Oil: "The First Shale Casualty: WBH Energy Files For Bankruptcy; Many More Coming" (the most leveraged energy companies)
Citigroup Goes All Medieval On the Energy Sector, Takes Quarterstave and Broadsword to Estimates
These Shale Companies Will File For Bankruptcy First: Goldman's "Best And Worst" Shale Matrix 

And from March 2015's  "Cash Strapped Chesapeake Reduced to Acting as Real Estate Broker for Shale Property Buyers (CHK; KKR)"  

Always remember: In the short run balance sheets don't move stocks, in the long run they rule.

So You've Rewired Your Brain To The Point You Can't Read A Book. Idiot

From the New York Times:

Addicted to Distraction

ONE evening early this summer, I opened a book and found myself reading the same paragraph over and over, a half dozen times before concluding that it was hopeless to continue. I simply couldn’t marshal the necessary focus. 

I was horrified. All my life, reading books has been a deep and consistent source of pleasure, learning and solace. Now the books I regularly purchased were piling up ever higher on my bedside table, staring at me in silent rebuke.

Instead of reading them, I was spending too many hours online, checking the traffic numbers for my company’s website, shopping for more colorful socks on Gilt and Rue La La, even though I had more than I needed, and even guiltily clicking through pictures with irresistible headlines such as “Awkward Child Stars Who Grew Up to Be Attractive.”

During the workday, I checked my email more times than I cared to acknowledge, and spent far too much time hungrily searching for tidbits of new information about the presidential campaign, with the election then still more than a year away.

“The net is designed to be an interruption system, a machine geared to dividing attention,” Nicholas Carr explains in his book “The Shallows: What the Internet Is Doing to Our Brains.” “We willingly accept the loss of concentration and focus, the division of our attention and the fragmentation of our thoughts, in return for the wealth of compelling or at least diverting information we receive.”

Addiction is the relentless pull to a substance or an activity that becomes so compulsive it ultimately interferes with everyday life. By that definition, nearly everyone I know is addicted in some measure to the Internet. It has arguably replaced work itself as our most socially sanctioned addiction.

According to one recent survey, the average white-collar worker spends about six hours a day on email. That doesn’t count time online spent shopping, searching or keeping up with social media.

The brain’s craving for novelty, constant stimulation and immediate gratification creates something called a “compulsion loop.” Like lab rats and drug addicts, we need more and more to get the same effect.

Endless access to new information also easily overloads our working memory. When we reach cognitive overload, our ability to transfer learning to long-term memory significantly deteriorates. It’s as if our brain has become a full cup of water and anything more poured into it starts to spill out.

I’ve known all of this for a long time. I started writing about it 20 years ago. I teach it to clients every day. I just never really believed it could become so true of me.

Denial is any addict’s first defense. No obstacle to recovery is greater than the infinite capacity to rationalize our compulsive behaviors. After years of feeling I was managing myself reasonably well, I fell last winter into an intense period of travel while also trying to manage a growing consulting business. In early summer, it suddenly dawned on me that I wasn’t managing myself well at all, and I didn’t feel good about it.

Beyond spending too much time on the Internet and a diminishing attention span, I wasn’t eating the right foods. I drank way too much diet soda. I was having a second cocktail at night too frequently. I was no longer exercising every day, as I had nearly all my life.

In response, I created an irrationally ambitious plan....MORE

TL;DR

(kidding)

Probably related:

You Aren't Imagining It: People Are Getting Dumber

"Were the Victorians cleverer than us? The decline in general intelligence estimated from a meta-analysis of the slowing of simple reaction time"

 

Climateer Line of the Day: Mental Entropy Edition

 

Thanks, I think, to a reader.

"I would be willing to wager that if an average citizen from Athens of 1000 BC were to appear suddenly among us, he or she would be among the brightest and most intellectually alive of our colleagues and companions. We would be surprised by our time-visitor’s memory, broad range of ideas and clear-sighted view of important issues. I would also guess that he or she would be among the most emotionally stable of our friends and colleagues."...

"People Are Going to Have a Lot of Sex in Driverless Cars"

Following up on yesterday's "Switzerland Begins Two-Year Trial of Driverless Buses" (plus money, art, glory and sex).

From Inverse:

We asked Google about it. They said that they have "no official position" on the looming highway bang boom.

It’s a truism: If you create a scenario in which two willing people share a space that offers even the illusion of privacy, they will do sex stuff to each other. Vehicles are not exempt from this principle. The Mile High Club, to cite the prime example, was founded in the early 1900s by pilot Lawrence Sperry, who created a precursor to the autopilot system and promptly bet both his and a lady friend’s life on it working. It did work and the next autopilot, the one set to drive our cars, will as well. That will free up time sure, but also our hands.

The inevitability of driverless car sex isn’t just a consequence of opportunity. It’s also a matter of tradition. In an essay in 1983’s Automobile and American Culture, Ford Motors historian David Lewis highlighted the early years of car sex, describing flappers consummating their lust in Model Ts and a risque postcard from the ‘30s that depicted a woman asking her driver to use “both hands.”

“If only the car would steer itself,” the driver replied.

This is to say that even lecherous, pre-WWII cartoonists realized that when autonomous cars materialize, so does autonomous car sex. There is no question about “if” — there are only questions about logistics.

How will this work?

People have sex in cars for all the same mundane or exceptional reasons they have sex anywhere else: It’s thrilling; there’s nothing better to do; they’re getting paid; they’re exhibitionists, or they’ve carved out a moment of privacy. The only difference here is that driverless cars will be in motion and, at least on highways, within sight of other cars. Presumably, the old euphemism, “parking,” will be replaced with a new one: “commuting.”

What sort of timeline are we talking?

That’s the big question. The guiding principle behind the Google driverless car is that the computer is benevolently in control — certain recent models even lack steering wheels. That being said, completely conking out in a post-coital interlude will remain illegal and inadvisable for the foreseeable future, if regulators have anything to do with it. (They have lots to do with it.)...MORE

How Demographics Rule the Global Economy

From the Wall Street Journal:

The developed world’s workforce will start to decline next year, threatening future global growth

Ever since the global financial crisis, economists have groped for reasons to explain why growth in the U.S. and abroad has repeatedly disappointed, citing everything from fiscal austerity to the euro meltdown. They are now coming to realize that one of the stiffest headwinds is also one of the hardest to overcome: demographics. 

Next year, the world’s advanced economies will reach a critical milestone. For the first time since 1950, their combined working-age population will decline, according to United Nations projections, and by 2050 it will shrink 5%. The ranks of workers will also fall in key emerging markets, such as China and Russia. At the same time the share of these countries’ population over 65 will skyrocket. 

Previous generations fretted about the world having too many people. Today’s problem is too few. 

This reflects two long-established trends: lengthening lifespans and declining fertility. Yet many of the economic consequences are only now apparent. Simply put, companies are running out of workers, customers or both. In either case, economic growth suffers. As a population ages, what people buy also changes, shifting more demand toward services such as health care and away from durable goods such as cars....MUCH MORE

HT: Abnormal Returns

Previously:

"China’s Demographics at a Turning Point"
The one rule of demographics is: demographics rule....

Demographics Rule: The Coming Battles Between The Juvies and The Geezers
Not exactly Crips and Bloods.
Or even Sharks and Jets, but important nonetheless.

I've forgotten who first explained the central truth of demographics to me but in a nutshell: you can't have more native-born 25-year-olds in 24 years than you have 1-year-olds today.

This is something Frau Merkel had already incorporated into her political weltanschauung when the news Germany reached a lower birthrate than Japan hit the press earlier this year.

No wonder they call it "Old Europe".

(Repost) Barron's Interview--Rob Arnott: Demographics Are the Markets' 800-Pound Gorilla
"Are robots and aging demographics self-cancelling problems?"

And many more.

"It is Now Legal to Own an Asteroid in the U.S."

You know the first things they want to mine are those things with the highest price per ounce back on earth which ex-truffles and saffron probably means the so-called precious metals.
However, with all that gold and platinum coming back, you might want to bone up on Another Post On Glass, This Time With "The Alchemist's Fallacy" (And Professor Nordhaus).

The miners will probably also keep an eye peeled for Californium-252 at $27 million per gram, but finding any is a bit of a long shot, 8 grams known to date.

From Economic Policy Journal:

Professor Walter Block, who has recently completed (with Peter L. Nelson) a book on  private property ownership of water, Water Capitalism: The Case for Privatizing Oceans, Rivers, Lakes, and Aquifers and who is working on a book on capitalism and private property in space, may have something to say about the U.S. Commercial Space Launch Competitiveness Act (H.R. 2262).

Christian Nordqvist reports:

Owning an asteroid is now legal in the Unites States, after President Barack Obama signed the U.S. Commercial Space Launch Competitiveness Act (H.R. 2262) into law, effectively reversing decades of space law. Before the new law was signed, space had been largely treated as publicly owned, i.e. nobody could claim commercial ownership of anything in outer space.

Now, US citizens have the right to own the asteroid resources they obtain, which several companies, including Planetary Resources Inc., say will encourage the commercial exploration and utilization of resources from asteroids....MORE

We've had some posts on this subject:

The U.S. House Of Representatives Just Passed An Asteroid Mining Bill
Here Comes Another Asteroid Mining, 3D Printing, Robotic, Start-up
Asteroid Mining: "A Start-Up Sees a Gold Rush Among the Stars"
"Are Ross Perot Jr. and Google's Founders Launching a New Asteroid Mining Operation?"
 X Prize Founder Wants to Mine Asteroids
 Rocket Men: A unique gathering of 13 companies showcases a coming year of launches
"We Are About to Start Mining Hydrothermal Vents on the Ocean Floor" (now with added alchemist's fallacy" 
"Asteroid a MILE wide to hurtle past Earth in 48 HOURS - as experts warn of MASS EXTINCTION"
"The companies vying to turn asteroids into filling stations"

Hi Italy! "Islamic State Entrenches in Sirte, Libya"

Sometimes I kinda miss old Muammar.
Sirte was his hometown and is also the place the Islamic State guys chopped off the heads of the 21 Coptic Christians last February.

From the Wall Street Journal, Nov. 29, 2015:

City across the Mediterranean from Europe is first outside Syria or Iraq to come under the group’s control 

Even as foreign powers step up pressure against Islamic State in Syria and Iraq, the militant group has expanded in Libya and established a new base close to Europe where it can generate oil revenue and plot terror attacks.

Since announcing its presence in February in Sirte, the city on Libya’s Mediterranean coast has become the first that the militant group governs outside of Syria and Iraq. Its presence there has grown over the past year from 200 eager fighters to a roughly 5,000-strong contingent which includes administrators and financiers, according to estimates by Libyan intelligence officials, residents and activists in the area.

The group has exploited the deep divisions in Libya, which has two rival governments, to create this new stronghold of violent religious extremism just across the Mediterranean Sea from Italy. Along the way, they scored a string of victories—defeating one of the strongest fighting forces in the country and swiftly crushing a local popular revolt.

Libya’s neighbors have become increasingly alarmed.

Tunisia closed its border with Libya for 15 days on Wednesday, the day after Islamic State claimed responsibility for a suicide bombing on a bus in the capital Tunis that killed 12 presidential guards.

Tunisia is also building a security wall along a third of that border to stem the flow of extremists between the countries. Two previous attacks in Tunisia this year that killed dozens of tourists were carried out by gunmen the government said were trained by Islamic State in Libya, which has recruited hundreds of Tunisians to its ranks.

This burgeoning operation in Libya shows how Islamic State is able to grow and adapt even as it is targeted by Russian, French and U.S.-led airstrikes in Syria as well as Kurdish and Iraqi ground assaults in Iraq.

In Libya, Islamic State has fended off challenges from government-aligned militias, crushed an uprising in Sirte and called for recruits who have the technical know-how to put the nearby oil facilities into operation.

Libyan officials said they are worried that it is only a matter of time before Islamic State attempts to take over more oil fields and refineries near Sirte to boost its revenue—money that could fund attacks in the Middle East and Europe.

Sirte is a gateway to several major oil fields and refineries farther east on the same coast and Islamic State has targeted those installations over the last year.

“They have made their intentions clear,” said Ismail Shoukry, head of military intelligence for the region that includes Sirte. “They want to take their fight to Rome.”...MORE

The Islamic State has posted some handy maps with annotations:

An image posted by an Islamic militant on Twitter with this description: “The distance between Sirte and Rome is 1250 km, like the distance between Jeddah and Dammam. In other words, a Scud missile can reach Rome. The distance to the edge of Italy [its southern border] totals 450 km.”

Last December Pope Francis fired the head of the Swiss Guard for being "too strict".

Previously:

July 2914
Heads Up For The Swiss Guards: ISIS Says They're Coming to Rome

al-Baghdadi may find the real Swiss Guards a bit more challenging than the guys pictured in the Vatican's World Cup tweet.

From HuffPo UK:

ISIS Head Abu Bakr al-Baghdadi Warns 'We Will Conquer Rome' 

Terror group ISIS will march on Rome in its quest to establish an Islamic state from the Middle East across Europe, its self-proclaimed 'caliph' has announced.

In an audio recording Abu Bakr al-Baghdadi called on Muslims to rally to his pan-Islamic, which ISIS now simply calls 'Islamic State'.

"Those who can immigrate to the Islamic State should immigrate, as immigration to the house of Islam is a duty," he said....MORE

After talking to Muslims who advise not using the self-designation 'Islamic State', in future I'll probably be referring to IS as "The state formally known as ISIS".

Besides being fashionable, the court jester uniforms of the Swiss Guard are voluminous enough to hide a sandwich as well as the Guard's favorite close quarters equipment, the Heckler & Koch MP7A2 room broom.

Possibly related:
Pope Francis Endorses Use of Force Against ISIS
The Vatican's Argentina v. Switzerland World Cup Tweet
"Con men stopped entering Vatican bank with €3 trillion of fake bonds"

"Commodity prices and exchange rates"

From Econbrowser:

The dramatic decline in the prices of a number of commodities over the last 16 months must have a common factor. One variable that seems to be quite important is the exchange rate.

Dollar prices of five commodities along with dollar cost of one euro. Source: Financial Visualizations.

Here’s a graph over a longer period of the dollar price of oil, the dollar price of copper, and the dollar price of a weighted average of other countries’ currencies with weights based on the volume of trade between the U.S. and each country. The graph is plotted on a logarithmic basis, so for small changes the height of each series corresponds to the percent difference between the price at the indicated date and the price at the end of June 2014 (see my primer on the use of logarithms in economics if you’re curious about those statements or why it might be helpful to plot series this way). The plunge down in all three measures since June 2014 that was highlighted in the first set of graphs is seen to be a broader pattern of striking positive co-movements among these variables.

Price of West Texas Intermediate (black), copper (green), and inverse of trade-weighted value of the dollar (blue), end of week values April 20, 2007 to November 20, 2015. Graph plots 100 times the difference between the natural logarithm at the indicated date and the natural logarithm on June 27, 2014. A value for the blue series below zero means that the dollar was worth more on that date than it had been on June 27, 2014.

One would expect that when the dollar price of other countries’ currencies falls, so would the dollar price of internationally traded commodities. But it is a mistake to say that the exchange rate is the cause of the change in commodity prices. The reason is that exchange rates and commodity prices are jointly determined as the outcome of other forces. Depending on what those other forces are, one might see stronger or weaker co-movement between commodity prices and exchange rates.

For example, the most striking episode in the graph above is the Great Recession in 2008-2009. Falling GDP around the world meant falling demand for commodities. It was also associated with a flight to safety in capital markets, which showed up as a surge in the value of the dollar. It’s not the case that the strong dollar then was the cause of falling dollar prices of oil and copper. Instead, the Great Recession was itself the common cause behind movements in all three variables.

One way to get a sense of how the driving factors have changed over time is to look at a regression of the weekly logarithmic change (approximately the weekly percentage change) of the dollar price of oil on the weekly logarithmic change in the exchange rate using a rolling 2-year window. Each point in the graph below plots that estimated coefficient using a sample of two years’ data ending at the indicated date. The coefficient was above two during and after the Great Recession– if the dollar appreciated 1% during the week in that period, you would expect to see more than a 2% decline in oil prices. The coefficient fell below one in the first half of 2014 but has since risen back above one.

I had been giving a similar interpretation to the correlation since June 2014 as to the data from the Great Recession– news about weakness in the world economy seemed to be a key reason for strength of the dollar over the last year and a half, and would also be a reason for declining commodity prices.

However, developments of the last three weeks call for a different explanation. The October 28 FOMC statement and subsequent statements by Fed officials have made clear that a hike in U.S. interest rates is coming December 16. An increase in U.S. interest rates relative to our trading partners is the primary reason that the dollar appreciated 4% (logarithmically) since October 16. Over that same period the dollar price of oil and copper each fell 16%....MORE

"Switzerland Begins Two-Year Trial of Driverless Buses" (plus money, art, glory and sex)

From FastCompany:

Switzerland's New Self-Driving Buses Will Probably Run Like Clockwork
Driverless public transportation may lift off well before private cars.

Excellent chocolate, accurate clocks, a criminal-friendly banking system. These are all things Switzerland is famous for. Now it might soon add driverless buses to the list: The Swiss city of Sion will begin a two-year trial of two autonomous buses beginning in spring 2016.

The buses come from startup BestMile and will be operated by SwissPost transport subsidiary Car Postal. The company’s name hints at the purpose for these small, nine-person shuttles. They are designed to cover the "last mile," the gap between a regular bus or metro stop and the passenger's own front door.

Unlike Google’s private self-driving vehicles, BestMile’s focus is public transport. It also takes a different approach suited to a network of vehicles running on known routes: the network controls the buses "the same way a control tower does in an airport," writes BestMile. The company is also working with the Swiss Federal Institute of Technology in Lausanne to improve the technology for better control and routing.

This hub-and-shuttle model might prove an excellent alternative to the other commonly-imagined scenario of fleets of driverless "taxis"—a robotic Uber network, offering a similar level of convenience but without putting so many vehicles on the road....MORE

You can see where this stuff gets very political, very fast.
I shall probably have to study up on the history of fraud and graft in the development of the traction railways in the U.S. and elsewhere to be on top of the coming game.

Or maybe just skim through Theodore Dreiser's 'Trilogy of Desire'.
Volume I: The Financier:

"..a thinly fictionalized account of the life of Charles Yerkes, a 19th century street-car magnate, creator of the original Chicago Loop, and a major benefactor of the University of Chicago. The story takes place in the 1870s and 1880s and involves insider trading, government loans to banks, and brokers and insurance companies failing and causing financial panic....." 

- Douglas Baird

Here's the Journal's 100th anniversary review of the first volume of the trilogy:

Masterpiece  

'The Financier' (1912) by Theodore Dreiser

A Life Driven by Desire 

Money, art, glory and sex in the greatest of all American business novels

We remember Theodore Dreiser mainly for his deeply felt tales of have-nots who yearn for much more than the world gives them. In "An American Tragedy," his 1925 masterpiece, a young man's longing for money and social standing leads him to the electric chair. But Mr. Dreiser also wrote admiringly of the wealthy, and this year marks the 100th anniversary of "The Financier," his sweeping and minutely observed story of an enormously successful capitalist.

"The Financier" centers on Frank Algernon Cowperwood, whom the author repeatedly describes as possessing "force." Cowperwood proves himself both skilled and resilient in the financial marketplace. He also keeps a cool head when he's discovered sleeping with his business partner's daughter. Mr. Dreiser so insistently interleaves stock-market intrigue with sex, in fact, that one critic described Cowperwood's story as a club sandwich of "slices of business alternating with erotic episodes."

But Cowperwood is no Gordon Gekko. He's suave, not rapacious. And unlike Gekko, who celebrates greed, Cowperwood asserts simply, "I satisfy myself."

Mr. Dreiser drew Cowperwood from life—specifically, the life of Charles Tyson Yerkes, one of the more freewheeling Gilded Age robber barons. Mr. Yerkes made his fortune in municipal rapid transit, but before he started buying up cable-car companies he was a stock and bond broker and speculator.

Mr. Dreiser fictionalizes Mr. Yerkes's personality, but follows his business life closely in the novel. The result is an amazingly intricate description of high-rolling 19th-century finance.

 Cowperwood practices a situational morality that "varies with conditions, if not climates." Invited into shady parley with the Philadelphia city treasurer, he cuts a backroom deal that anoints him an investment banker for the city, allowing him to speculate with the city's short-term loan issues. Although he does so prudently, investing in local street railways (the rapid transit of the time), he gets caught short when the Great Chicago Fire of 1871 triggers a run on his secret holdings before the usual end-of-month settlement. Thus exposed, Cowperwood and the treasurer are convicted of embezzlement and sent to prison....MORE