The Week-end Economists 4/11-13. Fuddniks Taxi ride to Hell Edition.
Taxi to the Dark Side is a gripping investigation into the reckless abuse of power by the Bush Administration.
A documentary murder mystery that examines the death of an Afghan taxi driver at Bagram Air Base, the film exposes a worldwide policy of detention and interrogation that condones torture and the abrogation of human rights.
This disturbing and often brutal film is the most incisive examination to date of the Bush Administration’s willingness, in its prosecution of the war on terror, to undermine the essence of the rule of law.
The film asks and answers a key question: what happens when a few men use the wartime powers of the executive to undermine the very principles on which the United States was founded?
http://vimeo.com/19952563
And I thought picking up fares in Pinellas County Zone 17 was bad!
As most of you know, I got an insurance bill that was astronomical, and had to take a break from being a lousy retired golfer to a taxi driver. Well, I'm back. Paid the bills, got a new dishwasher and Springsteen tickets in the deal, and told my asshole boss to shove it.
The taxi industry as it sits, hasn't changed much in about 80 years. Things are starting to change with internet based transportation start-ups like Lyft and UberX. The industry as it exists now is a dinosaur that doesn't know it's extinct.
We'll explore that, DeNiro's Taxi Driver and more along with our usual economics this week-end.
But, for now, Harry Chapin. Pocket the tip.
= new reply since forum marked as read
The silence is deafening still about the ongoing collapse in the Baltic Dry Index among mainstream media types (as it just might challenge the hope/hype that growth is coming back). At the dismal level of 1002, BDIY is at 8-month lows and has fallen 14 days in a row... but now it is having a real world impact. As Sea News reports, Korean shipping companies are failing to place orders for large vessels and anxiety over the future is forcing some local companies to dispose of their assets despite the relatively low shipbuilding costs as of late.
The Baltic Dry is down 14 days in a row at $1002 - its lowest in 8 months (and worst start to a year on record)
http://www.zerohedge.com/news/2014-04-11/shipbuilding-orders-evaporate-baltic-dry-collapses
Posted earlier in the week on GD.
MEXICO CITY—On a rainy Friday night in Mexico’s capital, Antonio ‘Gritón’ Ortiz poured himself a glass of tequila. Across the room, “The Girl from Ipanema” quietly seeped from a paint-splattered radio. “I’ll listen to almost any music while I’m working,” the 60-year-old artist said. “Like Yes! I really like Yes. The progressive rock band. You know them, right?” Water was boiling on the stove, and he poured it into a pre-packaged Korean noodle bowl. It was 10 p.m., time for dinner in Mexico. “I’ve been painting since I was 22, and not all of those years were easy,” he said. “But I do what I enjoy, and so far I’ve been able to make that work.”
For the past 28 years, Gritón has not paid a dime to the Tax Administration Service (SAT), the Mexican equivalent of the IRS. But he is no criminal. In fact, in a country that has lost an estimated $872 billion to money laundering and tax evasion over the past four decades, Gritón is in good standing with the law. Like more than 700 artists across Mexico, he takes part in a Pago en Especie (Payment in Kind) program—the only one of its type in the world—that allows artists to pay federal income taxes with their own artwork.
The program was hatched in 1957, in the throes of the so-called “Mexican Miracle,” a period of 40 years that saw sustained annual economic growth of between 3 and 4 percent. As legend has it, muralist David Alfaro Siqueiros, one of the most influential artists of his generation, approached the secretariat of finance in 1957 with a proposal to keep a friend and fellow artist out of jail for tax evasion: Let him pay his debt in art. The agreement laid the foundation for Pago en Especie, which today is a public collection of nearly 7,000 paintings, sculptures, and graphics accepted as tax payments from some of Mexico’s best-known artists.
When President Enrique Peña Nieto took office at the end of 2012, the outdated and mismanaged Mexican tax system was one of his first targets. He announced sweeping tax reforms last September, promising to end special programs, close corporate loopholes, and increase the taxpayer base in a country where, in 2012, tax revenue accounted for 8.5 percent of GDP. The proposed reforms were unpopular with business elites and the country’s most conservative politicians, who threatened to abandon the political coalition that Peña Nieto had so carefully assembled.
http://www.theatlantic.com/international/archive/2014/04/in-mexico-artists-can-pay-taxes-with-artwork/360519/
Russia will not import GMO products - PM Medvedev — RT News
Russia will not import GMO products, the country’s Prime Minister Dmitry Medvedev said, adding that the nation has enough space and resources to produce organic food.
Moscow has no reason to encourage the production of genetically modified products or import them into the country, Medvedev told a congress of deputies from rural settlements on Saturday.
“If the Americans like to eat GMO products, let them eat it then. We don’t need to do that; we have enough space and opportunities to produce organic food,” he said.
The prime minister said he ordered widespread monitoring of the agricultural sector. He added that despite rather strict restrictions, a certain amount of GMO products and seeds have made it to the Russian market.
http://rt.com/news/russia-import-gmo-products-621/
And damn, are they mocking the empire again? 
Or maybe it's just RT making shit up? 
US corn exports to China drop 85 percent after ban on GMO strains – industry report — RT USA
China’s rejection of shipments of US corn containing traces of unapproved genetically modified maize has caused a significant drop in exports. According to a new report, US traders have lost $427 million in sales.
Overall, China has barred nearly 1.45 million tons of corn shipments since last year, the National Grain and Feed Association (NGFA), an American industry association, said Friday.
The tally is based on data from export companies and is significantly higher than the previous numbers reported by the media, which said roughly 900,000 tons were affected. US corn exports to China since January are down 85 percent from the same period last year, the report says.
China has been blocking shipments of American corn from its market since November. This was caused by the presence of the MIR162 genetically modified corn strain in the shipments. It was developed by the company Syngenta and has not been approved by the Chinese government since an application was submitted in March 2010.
http://rt.com/usa/china-gmo-corn-ban-120/
The stock market isn't rigged, but it is taxed.
It always has been. As Justin Fox points out, for as long as people have been trading stocks, there have been middlemen taking a cut of the action. Now, that cut has gotten smaller as markets have gotten bigger and more technologically-advanced, but it's still there. It's the implicit fee that intermediaries charge for making sure there's a buyer for every seller, and a seller for every buyer—for "making markets."
But there's a new kind of middleman today. They don't work at stock exchanges or banks. They work at hedge funds, and trade at whiz-bang speeds. These "high-frequency traders" (HFT) use computer algorithms—a.k.a., algobots—to arbitrage away the most infinitesimal price discrepancies that only exist over the most infinitesimal time horizons. You can see just how small and how fast we're talking about in the chart below from a new paper by Eric Budish and John Shim of the University of Chicago and Peter Cramton of the University of Maryland. It uses 2011 data to show the price difference between futures (blue) and exchange-traded funds (green) that both track the S&P 500. These should be perfectly correlated, and they are—at minute intervals. But this correlation disappears at 250 millisecond intervals, a little more than half the time it takes to blink your eyes. This is the "inefficiency" that HFT makes less so.
This rise of the robots certainly seems to have helped ordinary investors. Bid-ask spreads—the difference between what buyers want to pay and sellers want to be paid—have fallen dramatically the past 20 years. Part of this is because, since 2001, stock prices have gone from trading in fractions to pennies—which has allowed them to be increasingly precise. Another part is that electronic trading, though not super-fast, has made markets more liquid. And the last part is that HFT has added even more liquidity, eliminating bid-ask spreads that would have been too small to do so before. Indeed, researchers found that Canadian bid-ask spreads increased by 9 percent in 2012 after the government introduced fees that effectively limited HFT.
That doesn't mean, though, that HFT is unambiguously good. It's not. In fact, it might not even be ambiguously good. As Noah Smith points out, we just don't know enough to do any kind of cost-benefit analysis. Now, we do know that smaller bid-ask spreads, which cut the cost of trading, are one benefit. But how much of one is it? Bid-ask spreads are down to around 3 basis points today—from 90 basis points 20 years ago—so even if curbing HFT increases them, say, 9 percent like it did in Canada, we're not talking about a big effect. There might be diminishing returns to liquidity that we've already hit, and then some.
