- Robin Hanson and his wife maintains 2 separate bank accounts, and his wife is down to Earth.

Marriage, despite its lack of clean edges and predictable outcomes, is one of the few institutions he seems to have no interest in reforming.

- Justin Wolfers’s money is managed by his wife.

The feminization of the society is a great scourge.

[E-mail me to direct me to English-speaking thinkers of feminization, so I can add them to this post, later on. The following videos are in French, apology.]

Eric Zemmour sur la féminisation de la société 1/3 par kepon86

Eric Zemmour sur la féminisation de la société 2/3 par kepon86

The basic points:

Gold does well when real rates of return are low. Real rates describe the price of gold much better than inflation alone. This is because real rates reflect the opportunity cost of holding a relatively useless asset. Part of the reason gold seems irrational is that this extrinsic pricing is unintuitive and largely unappreciated.

Gold does well when liquidity, measured for example by LIBOR, is not especially tight.

Sentiment can be predictive with gold.

The “extrinsic” way of thinking is natural in the fx world where all trades are two‐sided, and the idealized one‐sided currency , e.g. Dollar Index, is a weighted average of two‐sided rates. Other examples: the Fed Model and Dividend Discount models explicitly tie together the pricing of equities and interest rates. The housing bubble was to some extent already a mispricing of money in the form of interest rates. What was the “right” price for housing given the price of money?

Do people who claim that assets exhibit “irrational” moves have a clear idea of what level of volatility would be “rational”, especially given such cross‐influences? I do not endorse the Dividend Discount Model, but no-one can deny that it is a fundamental model, and it predicts higher volatility when rates are low. Given current levels, a 10% one day drop of the market is by no means absurd. The stock market should also have more idiosyncratic volatility when it is driven by “top-down” policy, rather than averaging many “bottom-ups.”

There is perhaps a “long-termism” fallacy. Even if prices change glacially, if you want to maintain a portfolio limited to 30 stocks out of a universe of 6000, it is easy to see how a sensible person might change the “best ideas” list with some frequency. The more prices change, the more frequent portfolio changes would be in order from a valuation standpoint. Again, asset prices are not hermetically sealed, one‐sided meanings and values. There is always some discount factor or relative valuation at play.

The easiest way to achieve a shock “20 standard deviation” move is to just not mark (or mis‐mark) for a while. Deferral of pricing is much more likely than active trading to originate an explosion large enough to affect the underlying economy. Deferral of pricing, not active trading, played a large role in the corporate credit crisis. Social Security and entitlement programs are also “off balance sheet” debt. At least banks failed to predict the future. Governments failed to predict the past. The basic demographic and longevity trend has been apparent since at least the 1960s.

Demographic trends suggest lower real returns than those seen in the 20th century. Do economists have a demographic blind spot?

The following was reported by eGaming Review:

Mastercard crackdown leaves US players unable to pay

US-facing operators have been hit by an overnight crackdown on online gambling payments by credit card giant Mastercard. The US company is believed to have toughened its stance on the widespread practice of operators coding egaming transaction as other kinds of online commerce, which will all (sic) its US customers from using their cards to gamble online.

Rival US card giant Visa is rumoured to have taken a similar measure, although this could not be confirmed at the time of writing.

The action is a sign that banks and payment companies are preparing for implementation of America’s Unlawful Internet Gambling Enforcement Act (UIGEA), which bans the facilitation of online gambling by payment companies. This was originally supposed to have been enforced from 1 December 2009, although the US treasury later approved a delay allowing companies until 1 June 2009 to comply…(more)

In the followup article, it was established that Visa was also implementing the restriction on US customers:

Visa declining US egaming payments

The crackdown on US online gambling credit card payments that began on Wednesday is being operated by Visa as well as rival US credit card giant Mastercard, EGRmagazine has now confirmed, with tens of thousands of US online gamblers likely to have been affected.

As reported yesterday, US-facing operators were hit by an overnight tightening of restrictions on the use of credit cards for egaming transaction ahead of the implementation of America’s Unlawful Internet Gambling Enforcement Act (UIGEA) law on 1 June, which bans the facilitation of online gambling by banks and other payment companies.

The action was at the time of writing confirmed as applying to US-registered cards issued by Mastercard, but rumours that a crackdown had also been launched by Visa had not been substantiated. However eGaming Review has now confirmed that these too are subject to the ban. Repeated attempts to use a US-registered Visa card by an eGaming Review reporter on PokerStars last night were declined, with the American poker giant sending an email in response that read:

“Status: DECLINED.

Your credit card transaction has been declined. If your credit card information was entered correctly and you have sufficient funds, your transaction was probably declined due to Internet gaming restrictions set by your credit card issuer…” (more)

So:

In order to better avoid of the USA anti-gambling radar, some gambling operators accepting US customers have been coding their Visa and Mastercard transactions in a manner as to not appear as gambling-related. The correct “internet gambing” merchant code is 7995; some operators have been putting their transactions through thus, and taking a chance as to whether or not the deposit goes through; others have not.

To put it another way: they’ve been trying to cheat the system.

Since the February crackdown appears to have been applied retrospectively to January, players now face the prospect that their deposits – with which they will have had plenty of time to play, and lose or win on accordingly – will now almost certainly not be honoured by Mastercard and Visa, resulting in an effective chargeback. This may have a knock-on effect when it comes to winning players receiving their payments.

And while the general tone of the internet discussion on this matter has been one of condemnation of the US administration in the wielding of its prohibitionist axe, I would personally like to ask this question: why should we not lay the blame for this squarely at the door of the online gambling operators, still dealing to US customers, who tried to cheat the system in the first place?

Their motives were purely profit-driven in attempting to stay below the radar. But it is the players, who committed no wrongdoing, who may suffer as a consequence.

It is of course also the case that not all operators have been trying to cheat the system. Some, such as Pokerstars, have been coding their transactions upfront as “internet gambling”; in fact, in another EGR article they made a point of distancing themselves from the practice:

PokerStars does not, nor ever has engaged in the practices of mis-coded credit card transactions. We have therefore been unaffected by any crackdown by Visa or MasterCard to close down such mis-coded processing accounts.

So, all well and good for the folks who’ve behaved honestly.

But the casinos and sportsbooks that have been trying to put one over Mastercard and Visa, whatever the ultimate cost they pay as a result of this matter may be, do not deserve any sympathy.

They particularly do not deserve any sympathy from those players who may end up seriously inconvenienced, and possibly out of pocket, as a result of their duplicity.

There’s been, predictably enough, quite a lot of discussion of this move that has such potential sweeping effects on the industry: see the No more Mastercard article at Bookmakers Review, and the Mastercard blocks US poker discussion at 2+2 Poker (“Intentionally mis-coding a CC transaction is a crime in many places around the globe.” – I quite agree); also my own Mastercard and Visa online gambling crackdown article, and one tiny piece of mainstream media coverage, the Timesonline online gambling comment – actually, quite funny, so I’ll quote it:

Operators including PokerStars which continue to defy the US ban have been hit by a crackdown on internet gambling payments by Mastercard and Visa, the credit card companies.

Great. The one piece of mainstream media coverage gets it completely wrong.

The One Percent – by Jamie Johnson