Weapons...

So the French built helicopter carrier deal with Russia is still on.  Shocking.  With the possibilities and spectrum of action being discussed constantly, my mind is on other players.

This incursion provides nice cover to accomplish some politically unpalatable goals for countries unaffected by the conflict.

The Bitcoin saga...

...a continuing farce...

After taking an observational interest in this newfound coin, it appears as though the problems discussed here will be too much for the fledeling "currency".

Powerful enemies cause powerful problems...particularly when you question their legitimacy and threaten to de-scale their influence.

And now some bitcoins have been "stolen".  When the list of suspects includes some of the world's most powerful countries, good luck.

Dear MtGox Customers and Bitcoiners,

As you are aware, the MtGox team has been working hard to address an issue with the way that bitcoin withdrawals are processed. By "bitcoin withdrawal" we are referring to transactions from a MtGox bitcoin wallet to an external bitcoin address. Bitcoin transactions to any MtGox bitcoin address, and currency withdrawals (Yen, Euro, etc) are not affected by this issue.

The problem we have identified is not limited to MtGox, and affects all transactions where Bitcoins are being sent to a third party. We believe that the changes required for addressing this issue will be positive over the long term for the whole community. As a result we took the necessary action of suspending bitcoin withdrawals until this technical issue has been resolved.


Addressing Transaction Malleability
MtGox has detected unusual activity on its Bitcoin wallets and performed investigations during the past weeks. This confirmed the presence of transactions which need to be examined more closely. 

Trade balance wars...

...a continuing saga...

Insularity goes both ways.  With Europe contiuing along the (well treaded) path of mercantilistic policy, the rest of the world has already gotten the joke.  Pre-emptive depreciation strikes in a global financial war, indeed.  I have written about this in a slightly different context before, but its instructive to note the tone of policy makers.

(Arnaud Montebourg, French Minister of Industry)

What is your view on the level of the euro?

As Minister of Industry, I believe that the euro is out of his nails
(french phrase: "sorti de ses clous", meaning way outside the norm) in
an overstatement that has become problematic in the eyes of all our
businesses. Between 2012 and 2013, it has appreciated over 10% against
the dollar and more than 40% against the yen. All while between the
third quarter of 2012 and the third quarter of 2013, the growth
rate was 3.4% accumulated in the United States, 2.3% in Japan and -
0.2% in the euro area! We have the most depressed area in the world and
the currency appreciates most in the world. This is grotesque.
...

Do not you afraid to start a currency war?

But it already exists this war! We are the victims and we are the only
ones not to react!

To laugh or cry...

A well-known University increases its profits by providing an "education" that serves no other purpose but to keep the revenue wheels greased.  I have written about the NCAA previously on this blog.  The Universities of the U.S.A. should be banned from providing athletic talent for professional sports.  The lack of a well-developed market here is causing these absurd distortions.  What a farce.  And, of course, the fact that this University practiced these methods guarantees that its competitors employ similar tactics.

Also note that the University if dealing with these issues during a massive and uncharacteristic snow-storm in the area...literally snowing over this news to some degree.

As the great Lily Tomlin said "No matter how cynical you become, its never enough to keep up"

That painful history consists of the transformation of UNC's former
African and Afro-American Studies Department into a factory churning
out fake grades from phony classes disproportionately attended by
varsity athletes. No one is disputing that anymore. What's still
unclear is the degree to which Chapel Hill's powerful Athletic
Department initiated and/or exploited the fraudulent Afro-Am
department. (It has since been reformed and "rebranded," Dean pointed
out, as African, African-American, and Diaspora Studies.)

In the most important piece of actual news he delivered during his
visit to New York--news that as far as I can tell has not been reported
anywhere else--Dean said he had commissioned an internal study on the
entire history of African and African-American studies at UNC. He said
he's determined to get to the bottom of what forces and personalities
caused the program's ugly corruption. He also vowed to "look at"
whether athletes were "clustering" in other departments and classes
reputed to be the source of easy grades. If these inquiries are
thorough and followed by changes, UNC could go from outlaw to leader
in cleaning up the relationship between Division 1 "revenue sports,"
as they're known, and the provision of real undergraduate education.

Unfortunately...

...all laws are not created equal.  In countries with a strong history of accountability and oversight (which include, at least nominally, countries of anglo saxon tradition) such laws can increase transparency and competition.  In other countries that have history steeped less in rule-sets, such laws increase arbitrary enforcement and generally lead to further concentrations of power within the ruling class (in this case, the Communist Party)

From The Economist:

China’s government has always made life difficult for firms in some sectors—it has restricted market access for foreign banks and brokerage houses and blocked internet firms, including Facebook and Twitter—but the tough treatment seems to be spreading. Hardware firms such as Cisco, IBM and Qualcomm are facing a post-Snowden backlash; GlaxoSmithKline, a drugmaker, is ensnared in a corruption probe; Apple was forced into a humiliating apology last year for offering inadequate warranties; and Starbucks has been accused by state media of price-gouging. A sweeping consumer-protection law will come into force in March, possibly providing a fresh line of attack on multinationals. And the government’s crackdown on extravagant spending by officials is hitting the foreign firms that peddle luxuries

Bitcoin.

Who has the capital, both financial and political, to withstand this pressure?  Nobody.  If you are going to challenge, even tangentially, the primacy of the prevailing currency of the country in which you reside, expect retaliation by any and all available means with "extreme prejudice".  Challenging the local Lord has been a guaranteed way to lose life and/or property for centuries.

Charlie Shrem, the CEO of Bitcoin exchange company BitInstant and a well-known voice in the virtual currency community, has been charged with scheming to sell and launder $1 million worth of Bitcoin to users of the illegal drug website Silk Road.

The criminal complaint, unsealed today in Manhattan federal court, says that the 24-year-old Shrem conspired with Robert Faiella, a 52-year-old who used the handle "BTCKing." Faiella allegedly obtained Bitcoins from Shrem, then sold them anonymously to Silk Road users at a markup through the site.

The prosecutors say Shrem was aware of the illegal activity and even bought drugs on Silk Road himself. "Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act," US Attorney Preet Bharara said in a statement.

The Paper Dragon solves the problem...

...so we have visual confirmation of what were previously merely optical backstops.  This of course "solves" nothing and the massive imbalances continue to weigh on internal stability.  It is one thing to have a few million people living in poverty, as in the United States...but inequality scales heavily with population.

1.2 Billion angry Chinese await the eventualities here.

The cost of insuring China’s bonds against non-payment fell the most since September and debt linked to municipalities gained after the bailout of a troubled trust product averted a default that may have spooked markets.

Credit-default swaps protecting Chinese sovereign bonds for five years slid nine basis points, or 0.09 percentage points, to 96 yesterday in New York, according to data provider CMA. The average yield on five-year notes rated AA, the most common grade for so-called local-government financing vehicles, dropped two basis points to 7.58 percent, the biggest decline in more than two weeks, ChinaBond figures show.