Frozen coins


Its cost of ‘production’ or mining can only go up because of the nature of the 21 million cap.

When the cost of mining exceeds bitcoin’s price, miners will shut down. What happens then? You can’t transact bitcoin if miners won’t validate the deal. You can’t even have your Minsky Moment.

Ok, it becomes a Disney asset: Frozen. It will be a winter of discontent.


Bitcoin and bubble gum

Taleb is right, and Bitcoin is no bubble.

Maybe it’s gum.

A “bubble” becomes a bubble when you run out of nonbankrupt people calling it a bubble. ~ Nassim Taleb

The hard part is deciding when the bubble will pop.

So, when a rich guy tells you something is fundamentally great, he’s enticing you to do the bubble; but it’s not, until he shuts up. Think Buffett and Coke.

If the same guy tells you it’s a bubble, it isn’t, because he wants to slow you down so he can get in. When he shuts up, then it’s bubble time. This goes for seemingly staid banker types.

The rich guy then shuts up when he’s selling and laughing.

Sum-up: A bubble has two elements – a rising price, and an inevitable but unpredictable crash. It doesn’t mean that the smart money can’t get rich at others’ expense.

Disclaimer: I call Bitcoin a bubble. But then my opinion doesn’t count. After all, I’m just an economist, and Nassim Taleb says economists don’t know anything. He’s right.

Economics 2.0


IF there is dumb, there’s dumber; smart, smarter; thievery, plunder; good, saint; plain Jane, invisible; pretty, beauty; etc.

The point is that we can use these gradations to better understand economics.

When you do things for status, that’s social order driving the economy.

But what kind of good is status? It’s not rival, because you can’t eat it; but it’s exclusive. A club good?

Citizenship is a club good. So is formal education. So is the opinion of your peers. We strive for and shed these things, depending.

And that makes the economy, micro or macro, somewhat unpredictable. Yet, understandable.

Perhaps status is an informal club good, akin to Groucho’s inexistent club. And as an informal club good, status is like fiat money, valuable only on the prevailing whim of a society that confers that value.

But unlike fiat money, status can’t just be printed. There is no central bank that can create status.

This kind of thinking leads us nowhere, doesn’t it? Still, better to know that we’re not anywhere, than to pretend we’ve arrived.

Contracts –Waiver of liability for fraud (bar review note) – repost

[originally posted in July, 2009]

Here comes a “movement” that proclaims itself to be “apolitical, inclusive … based on the principle of volunteerism.”  It calls itself AKO MISMO, and it vows the greatest of intentions (to promote “positive change”), but it is run by an advertising agency, DDB Philippines.  A number of celebrities have lent their names and images as supporters of this movement, among them Arnel Pineda (a vocalist), Ely Buendia (a musician), and Maxene Magalona (an actress).

Continue reading “Contracts –Waiver of liability for fraud (bar review note) – repost”

Senior Citizens of Makati – Know Your Rights in Traffic

[Blast from the past: April 25, 2013 at 1:29am]

The traffic law has since been re-written (see below).  But a bit of this post is still relevant.

This is almost a tongue-in-cheek note.

On April 23, 2013, I was stopped by a traffic enforcer on Buendia in Makati. He claimed that my car was “smoke belching.” Quietly, I argued that I maintained my car in good shape and smoke belching is not an issue. He asked for my license and car registration, which I politely and promptly gave him to inspect.

He then talked about a “manual test” of my exhaust, and informed me that if the car failed the test he would confiscate my car’s license plate. I protested that as far as I knew there was no authority for him to confiscate my car’s license plate.

After a little bit of hemming and hawing by the enforcer, I gave him my senior citizen ID, and informed him that I am a resident of Makati. His response was to consult with another traffic enforcer. His tone of voice changed from one of threat to one of exasperation. Finally, he said he would let me go because, according to him, senior citizens were “exempted” from traffic violations.

In my mind I hadn’t heard of such a rule, but I simply thanked him for letting me go. I don’t know whether what the enforcer told me was true or correct.

Still, I have the following suspicions:

One, the smoke-belching story is just another ruse to extort money. It may work against public use buses and jeepneys, but an informed motorist should resist such an extortion attempt (politely, of course).

Two, the enforcer did not have any authority to apprehend a private car on smoke belching. (Subsequently, from the MMDA website, I learned that as a motorist, I have the right to ask for the enforcer’s mission order, and the scope of his authority in this regard.)

Three, the idea that senior citizens are exempt from traffic rules is ridiculous. But let it be. Perhaps this was just the enforcer’s way of saving face because by then he decided that I would not offer him a bribe.

Four, the traffic enforcer was abusing his position. A reading of official pronouncements from the MMDA suggests that the authority of an enforcer to issue a TVR while confiscating a driver’s license is limited to instances of a crime, accident, or certain administrative violations by the motorist, such as a tampered taxi meter in the case of a taxi. Outside these circumstances, the enforcer may not confiscate a driver’s license. The official rules also state that under certain conditions, the enforcer may detach the car’s license plate. One such condition is when the motorist refuses to surrender his driver’s license. (I am not sure what other conditions will allow a traffic enforcer to confiscate a car’s license plate.)


NB.  The new traffic law of 2014 has changed some of the rules of traffic enforcement.

New Rules for 2014

The new rules do not allow the confiscation of license plates, but allow the impoundment of vehicles if they operate with smoke belching (determined by observation), or have modified equipment (presumably, illegal modifications).  The penalties are the same for cars, trucks, and motorcycles, which means that those with motorcycles are vulnerable for impoundment for even very minor equipment violations, such as those pertaining to mirrors, mufflers, and lights. A motorcycle owner with three equipment violations faces a fine of P15,000 and impoundment on the spot.

(Whether this is an unreasonable deprivation of property without due process seems a proper constitutional challenge, as well as a violation of equal protection since the fine for a truck with faulty brakes or unsafe tires is P5,000, the same as for a motorcycle with ‘modified’ wheels or tires.  Also, the determination of what is street-legal for equipment seems to be vulnerable to abuse of discretion on the part of the enforcement officer.)

The old traffic violation receipt (TVR) is back, even for minor violations, but now called TOP (temporary operator’s permit).  The penalties are lesser for driving without carrying the driver’s license, relative to driving without any license at all.  This means that  the old TVR/TOP extortion schemes won’t work so well if you carry only a copy of the original license with you.  You may show the enforcing officer the copy of your driver’s license, so he can charge you with not carrying the ‘real’ license, but he can’t inconvenience you with having to go to LTO to retrieve your license.  You now have 30 days to pay the fine, after which the LTO can suspend the license, whereas the TOP (if the enforcement officer has ‘confiscated’ your license) is valid for only 3 days.

The LTO is in charge of collecting fines, and allows a motorist five days to file a written contest of the charges.  After that period, the motorist is deemed to have admitted the violations on the traffic ticket. The five-day period seems to be there to provide a kind of due process protection, and test cases of contests raised on appeal to a higher authority than the LTO can be raised by concerned citizens.