14/6/2013: Weekend reading links: Part 1

Weekend reading links as usual, and as in previous week - in two posts.

Let's start with some fun. After a week of reading economics on this blog, why not leaf through 12 "random and obscure laws" that still exist. I know the USofA is a liberty paradise but… allegedly, not in Maine and not when it comes to Christmas lights and wreaths… or in Wisconsin as it goes for margarine...
http://likes.com/facts/totally-random-and-obsucre-laws-that-actually-exist?pid=95328&utm_source=mylikes&utm_medium=cpc&utm_campaign=ml&utm_term=25124720


My favourite visualisation of Big Data this time around comes from North Korea

And do check out the rest of the fab pics here…
http://likes.com/facts/wtf-north-korea?v=eyJjbGlja19pZCI6IDExMTkzMDIyNzksICJwb3N0X2lkIjogMjUxMjQ3MjB9

Note: on a serious side, I do find the above pic almost artistic - in the same vein as Andreas Gursky's real art: http://artblart.com/tag/andreas-gursky-tokyo-stock-exchange/

which (the above) also came from DRNK… and his very famous
http://artblart.files.wordpress.com/2008/11/gursky-99cent.jpg
My students from UCD courses in Masters in Management programme would remember the linked image.


From the sublime above to the atrocious below: The Kitsch of Ashgabat http://www.theatlantic.com/infocus/2013/06/the-city-of-white-marble-ashgabat-turkmenistan/100528/
My favourite is

The bizarre, tortured, almost shredded geometry of the totalitarian PhysEd comes to memory. No, the true derangement of the tyrant is measured not so much by thousands starved or banished or destroyed, but by grandiose waste of beauty, the more forced, the more permanent, the better. It is hard to explain, but violence to intrinsically beautiful is more characteristic of the delusion than violence to human. perhaps because nature usually poses no political threat, thus defacing nature is purely violent without any purpose.

Perhaps this would do for a better explanation: by Joseph Brodsky

 

Space is memory. The above photo records the former to sustain the latter.


A more modern - almost real-time - Duchampianization in Cyprus:
http://www.reuters.com/article/2013/06/10/us-cyprus-toilets-idUSBRE9590IA20130610
and it's inspiration:
http://www.tate.org.uk/art/artworks/duchamp-fountain-t07573
I could have chosen to term this Duchampianism - and almost did - except some attribute Duchamp's inspiration to a positive value - the ready made reproduction of the curvature similar to Constantin Brancusi's marbles, which obviously would not have been an appropriate allegory for Nicosia's installation. So perhaps we have amore ad hoc ready made analogy in two pieces, hence, Duchampianization term.


Take this quote for a teaser: "Most people have no clue that quantum computing exists. Even fewer know how it works. But once you understand it, and its vast processing power, you'll understand that this new Digital Age we're living in has barely scratched the surface of the computer potential."
Read more: http://www.businessinsider.com/what-is-quantum-computing-2013-6#ixzz2WE8s9ZjW
You will want to read more... I know - I did. And here's the source: http://dwave.wordpress.com/ Just awesome!


Two sets of links on time:

The first one is of two watches - the diametrically opposing works of art:
2013 - Vianney Halter

http://basel.watchprosite.com/show-forumpost/fi-636/pi-5864183/ti-862138/
But do watch the video - a fascinating story, also told in the article linked below:

http://live.wsj.com/video/the-most-important-watch-of-2013/62A235B4-BF3A-4BA0-B500-21048E3B3C30.html?mod=WSJ_article_outbrain&obref=obnetwork#!62A235B4-BF3A-4BA0-B500-21048E3B3C30
http://online.wsj.com/article/SB10001424127887324063304578523182943531780.html


And Ukraine's brilliant entry to Basel 2013:
http://basel.watchprosite.com/page-slide.new/ti-867538/pi-5909858/msid-26618318/fi-/nalbumforum.all_bLoB_s-/
and more pics:
http://basel.watchprosite.com/?show=photo&fi=636&imgid=3355653&msid=26618318&ti=867538&pi=5909858


But time (we are on dimensions theme here - following the note about space) is also linked to memory:

http://lifehacker.com/how-your-brain-perceives-time-and-how-to-use-it-to-you-511184192

And thus - to round up the first post of weekend reading links: of space and time... together:

http://www.poets.org/viewmedia.php/prmMID/19072

14/6/2013: EU's FTT: One Tax, Multiple Problems

FTT - Financial Transactions Tax - has been the pet project of pure love for Eurocrats and Socialistas in the Member States, hungry for revenue. It has been labelled a 'Robin Hood Tax' because the politicians attempted to sell it as a tax on filthy-rich financial services to redistribute to starving unemployed, presumably, despite the simple fact that in the un-competitive and fragmented market for financial services that is Europe, such a tax - any tax - will be fully passed onto ordinary savers, investors, depositors and in general onto the users of financial services.

The EU Commission published volumes of commissioned - made-to-order - research that shows just how brilliant an idea the FTT really is: it will raise loads of revenues, harm no one and will not reduce financial markets efficiency. Stopping just short of declaring the FTT to be a panacea to common cold, the EU enthusiastically propagandized the idea despite the simple fact that vast majority of academic research on the topic of transactions taxes finds that they are either ineffective as means for revenue raising or costly in terms of economic efficiency.

I wrote about this (see link at the bottom of this post below) and will continue to write, not because I long for an easy life for the bankers or financial investors, but because I recognise the fact that investment markets are necessary to the functioning of the society and the economy, and because I also recognise that more open, less restricted, but well-regulated and strictly enforced financial services are better than anything that Brussels et al can conceive in their technocratic dreams.

So in line with the past record, here's another study (http://www.cpb.nl/en/publication/an-evaluation-of-the-financial-transaction-tax) that explores "...whether the FTT is likely to correct the market failures that have contributed to the financial crisis, how well the FTT is likely to succeed in raising revenues, and how the FTT compares to alternative taxes in terms of efficiency."

The study finds (emphasis is mine) "... little evidence that the FTT will be effective in correcting

market failures. Taxing of transactions is not well targeted at behaviour that leads to excessive risk and

systemic risk creation. The empirical evidence does not suggest that the introduction of an FTT reduces

volatility or asset price bubbles. Transaction taxes will likely reduce investment in trading activity and

information acquisition, but also raise the costs of insurance against currency and interest risks by

companies, insurers and pension funds. The welfare effect of that is unclear."

"The FTT will likely raise significant revenues, in spite of the fact that the tax base is highly elastic. In the short term, the incidence of the tax will be chiefly on the current holders of securities. Ultimately, the tax will be borne in part by end users, and we estimate the likely effects on economic growth."

"When compared to alternative forms of taxation of the financial sector, the FTT is likely less efficient given the amount of revenues. In particular, taxes that more directly address existing distortions (such as the current VAT exemption for banks, and the bias towards debt financing) provide more efficient alternatives."

And here's a report from the Open Europe think-tank on the FTT, assessing the EU Commission response to the concerns of the eleven - that right, eleven - member states: (http://openeuropeblog.blogspot.co.uk/2013/05/if-you-had-kept-quiet-you-would-have.html)

Quote: "The Commission's response ranges from weak to capricious to outright ridiculous. For example, when it says that "we're not aware of any credit crunch" in Europe."

What else is new?

Note: I wrote about the concerns around the issues of repos and hedging here: http://trueeconomics.blogspot.ie/2013/05/3052013-ftt-up-down-down-again-climbing.html


Links to past articles on FTT: http://trueeconomics.blogspot.ie/search?q=FTT&max-results=20&by-date=true
You can search this blog for key words and sort the posts by relevance or date.

14/6/2013: Detroit suspends payments on unsecured debt

I recently wrote (albeit in distinct context) about Detroit's bankruptcy. Here's the latest on the saga:
http://www.bloomberg.com/news/2013-06-14/detroit-on-bankruptcy-s-brink-stops-paying-some-debts-orr-says.html

I love this city because it gave me (via Chicago) my greatest partner in the crime of life. And my students in Smurfit Graduate School of Business are certainly familiar with the imagery of the urban collapse from Detroit and Flint, Michigan on foot of my lecture notes slides penchant for dramatic photography.

Sadly, it is totally, comprehensively, irreparably destroyed. Its only hope is a structured and comprehensive default followed by a bottom-up restructuring of its economy, demographics, politics, policies and institutions. Let's hope Michigan State will not commit the errors committed by the Euro area 'leaders' in Greece, Ireland, Portugal, Cyprus, Spain, Italy...

14/6/2013: G8 Summit: pure laughs

G8 Summit has been transforming Northern Irish country towns into prosperous villages... (see the first image in this post: http://trueeconomics.blogspot.ie/2013/05/3152013-bank-holidays-links-on-art.html), but all along, the real winners in the Best Bizarreville News Contest was the host resort itself:

14/6/2013: Scary table of the week: Irish Property Prices 'Recovery' Dating

Updating my databases, I came across an old exercise of estimating the property prices recovery paths for Ireland based on the CSO Residential Property Price Index. Here's an updated table of dates of expected recovery according to three basic scenarios:

There is virtually no point of repeating the same exercise for real values, albeit the closest this comes to such an attempt is Scenario 3.

All calculations are based on CSO data.

13/6/2013: Irish Construction Sector Activity Post Some Better News: Q1 2013

Some good news for Irish construction sector (not as impressive as German stuff, but... much more welcome, given the sector dynamics so far through the crisis).

Per CSO: "The volume of output in building and construction was 4.4% higher in the first quarter of 2013 when compared with the preceding period.

• This reflects increases of 6.8% and 1.2% respectively in residential building and non-residential building. 
• There was a decrease of 0.7% in the volume of civil engineering.  The change in the value of production for all building and construction was +1.9%. 
• On an annual basis, the volume of output in building and construction increased by 10.7% in the first quarter of 2013.  
• There was an increase of 9.5% in the value of production in the same period. 
• The annual rise in the volume of output reflects year-on-year increases of 26.8% and 2.4% respectively in civil engineering and non-residential building work. 
• Output in residential building decreased by 2.5%"

Now, graphs and a summary table for more detailed analysis: