Singapore is the safest.
2:15 into
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Like putting up his damn name in the title tag of his blog…- 
Google Search fuels on keywords (and reputation).
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Robin Hanson debates a Mencius Moldbug on prediction markets, decision markets, and…- futarchy:
Foresight 2010 debate: Futarchy from Monica Anderson on Vimeo.
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Credit cards Mastercard and Visa have recently imposed restrictions on online gambling transactions to US customers, in preparation for the implementation of the anti-gambling legislation in June this year.
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 relationship between William Hill and the betting exchanges has not been a good one. On January 29, 2003, David Harding on the subject of Betfair’s impact on the the over-round said- “Some racecourse markets now return overrounds of only 1.2 to 1.3 per cent per runner. That is not sustainable. I cannot have a price mechanism for 50% of my business being desecrated.
In a recent interview with Betview magazine Ralph Topping, Hills’ current head had this to say of Betfair-
“‘I call Betfair the choirboys of the betting industry – “look at us we’re so innocent” – actually the exchanges are the biggest Masonic lodge there is. They’re a massive secret society where illegal gambling is taking place. What would throw a spanner in the works is if William Hill came up with an exchange model which could be offered in our betting shops or through our telephone business.”
A fascinating portrayal of one of the most transparent betting companies in the world.
EDITOR’-S NOTE: BetFair’-s Mark Davies has his own take on the Topping statement.
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Great products, according to Mr. Jobs, are triumphs of “taste.” And taste, he explains, is a byproduct of study, observation and being steeped in the culture of the past and present, of “trying to expose yourself to the best things humans have done and then bring those things into what you are doing.”
His is not a product-design philosophy steered by committee or determined by market research. The Jobs formula, say colleagues, relies heavily on tenacity, patience, belief and instinct. He gets deeply involved in hardware and software design choices, which await his personal nod or veto.
I am filing this post in the “-INDIVIDUAL INTELLIGENCE –- ANTI CONSENSUS”- category (opposing the “-COLLECTIVE INTELLIGENCE –- WISDOM OF CROWDS”- category) —-following a remark I made privately to David Pennock, Mike Giberson and Mike Linksvayer.
The specific points at issue are ownership or sponsorship of hedge funds and private equity funds, and proprietary trading — that is, placing bank capital at risk in the search of speculative profit rather than in response to customer needs. Those activities are actively engaged in by only a handful of American mega-commercial banks, perhaps four or five. Only 25 or 30 may be significant internationally.
“-Not inflation”-, the gold critics will shout, in one of their go-to arguments. This is what we hear from CNBC’-s Mark Haines at every possible chance: since 1980, gold has not kept up with the CPI and so shouldn’-t be used as an inflation hedge. One would point out to Mark that this is analogous to arguing for global cooling based on that one 2005 start date. If you pick basically any other start date but the one corresponding to gold’-s 1980 peak, you see something different, even giving CPI a long head start over floating gold prices:
| Cumulative Increase Through December 2009 |  - | ||||
|  - | CPI | Gold | Gold/CPI Increase Ratio | ||
| From: |  - |  - |  - |  - |  - |
| Jan-55 | 808.3% | 3129.5% | 3.87 |  - |  - |
| Jan-70 | 476.9% | 3113.9% | 6.53 |  - |  - |
| Jan-75 | 320.1% | 514.8% | 1.61 |  - |  - |
| Jan-80 | 185.0% | 143.8% | 0.78 |  - |  - |
| Jan-85 | 105.4% | 254.2% | 2.41 |  - |  - |
| Jan-90 | 71.8% | 176.3% | 2.45 |  - |  - |
| Jan-95 | 44.5% | 197.8% | 4.44 |  - |  - |
| Jan-00 | 28.5% | 298.5% | 10.46 |  - |  - |
| Jan-05 | 13.3% | 155.6% | 11.74 |  - |  - |
But in shorter time-frames gold critics do have half a point. Since 2003, on a daily basis, gold returns have only been 12.5% correlated to changes in the inflation rate implied by 10-year TIPs. On a monthly basis, gold returns are 9% correlated to those of the TIPs spread.
We can look back further if we examine the the monthly performance of gold versus year-over-year changes in the CPI index. The CPI index for a given month is released in the subsequent month, so CPI monthly values are shifted forward in this study to correspond to the month of their release. The YoY change in CPI is further assumed to be the market’-s expectation of future inflation. All gold prices here are daily averages based on the London PM fix through December 1974, and Comex/CME spot thereafter.
Ignoring the fact that gold generally rose in this period, it doesn’-t do particularly well when inflation is elevated by this definition. A cut-off of 4% was used because it was the round number that most nearly bisected the 501 months in question, but the pattern holds-up when this parameter and other assumptions are varied:
| Monthly Gold Price Changes By Inflation Rate, Apr 1968 –- Dec 2009 | ||||||
|  - | Sum | Number of Months | Average |  - |  - | |
| Months where inflation: |  - |  - |  - |  - | ||
| >- 4% | 180.4% | 225 |  - | 0.80% |  - |  - |
| <-= 4% | 232.3% | 276 |  - | 0.84% |  - |  - |
So what does gold hedge against? Gold does well when real returns are low. You can’-t consider inflation without looking at prevailing rates and growth. The rates used below are the average of daily 10yr constant maturity rates (GS10) within a given month. As Larry David would say, “-pretty …- pretty good”-:
| Monthly Gold Price Changes By Real Rate, Apr 1968 –- Dec 2009 | ||||||
|  - | Sum | Number of Months | Average |  - |  - | |
| Months where real rate: |  - |  - |  - |  - | ||
| <- 3% | 414.0% | 268 |  - | 1.54% |  - |  - |
| >-= 3% | -1.3% | 233 |  - | -0.01% |  - |  - |
3% was used because it is again the round number that most nearly bisects the observations, but it can be varied without changing the essential result. There are also simple ways to define low real returns without a fixed parameter that show similar performance breakdowns with very different distributions of months. Now, these are retrospective studies, not trading systems, but obviously there is little chance that those returns were drawn from populations with the same mean.
It’-s surprising that thoughtful types like Nouriel Roubini and Martin Feldstein have questioned gold’-s inflation hedging, but didn’-t mention this point —- it seems glaring: people hold the relatively useless metal when real rates and opportunity cost are low. This simple point somehow never comes through in the noise surrounding gold: the glib Spam-sagacity vs. the Fall of The Republic, all the go-to arguments.
Clearly there are other factors that may throw the model off for long stretches of time. These may be false positives (e.g. non-dollar weakness) or false negatives (e.g. if gold is monetized to the point that it rises in deflation).
Putting aside the current weakness related to the Euro and elevating risk aversion, since I’-m expecting real rates to be on the low end compared to the late 20th century, my bias is still long gold. If yields should rise, especially if they are driven by vigilance, gold might make less sense.
[Cross-posted with minor changes from Seeking Alpha]