Cryptonite January 2024
A roundup of all things crypto!
Markets this Week
More here: country ETFs, fixed income, currencies and commodities.
Links
Research
Has the Rise of Work-from-Home Reduced the Motherhood Penalty in the Labor Market? (drive)
A 10% increase in WFH is shown to increase mothers employment by 1%. This is particularly true in professions which are more family unfriendly, like finance and marketing. The rise of WFH transformed a broader set of jobs into more family-friendly occupations.
Optimists, Pessimists and Stock Prices (SSRN)
Under a binding short-sale friction high-disagreement stocks underperform. In an extreme case, a portfolio of constrained stocks loses about 50% against the market over a 5-year horizon. These stocks have experienced a price run-up up before the crash and exhibited classic “bubble” features.
Why Not 100% Equities (AQR)
Diversification works, theory works (eventually), owning one asset is suboptimal, extrapolating the winning country over a period of valuation increases is dangerous.
Behavioral Responses to Wealth Taxation (NBER)
We find compelling evidence that taxpayers instantly reduce the wealth they declare in response to a wealth tax. Moreover, these effects can persist for years even after the wealth tax is no longer in place, providing the first evidence of a hysteresis effect for a temporary tax policy.
Crypto
Governance of Permissionless Blockchain Networks (federalreserve)
Implications of a U.S. CBDC for International Payments and the Role of the Dollar (federalreserve)
The RBI plans to introduce additional functionalities of programmability in CBDC retail payments to facilitate transactions for specific/targeted purposes. (thehindubusinessline, economictimes)
$40 billion worth of crypto crime enabled by stablecoins since 2022 (arstechnica)
In the banking system, you have no privacy from your banker or the government, but at least your neighbour Ted doesn’t see every transaction you’re making
- on Binance’s decision to delist monero (ft)
Investing & Economy
India
As the demand for nurses surged globally in an ageing and post-pandemic world, Kerala seized the opportunity to export its most valuable human capital. The migration of nurses from Kerala as well as the rest of India has reached unprecedented levels. About 20,000 nurses graduate every year in Kerala, but more than 36,000 nurses leave the country. (livemint)
Farm union leaders are seeking guarantees, backed by law, of more state support or a minimum purchase price for crops. (reuters)
MSP caters but to a minuscule segment of the farm sector with only 14% of the farm produce benefitting from this, and in terms of number of people dependent on farming only kulaks or rich/large scale farmers with resources at its command hogging bulk of the government support. (cnbctv18)
Supreme Court scraps Electoral Bonds (reuters, economist) Electoral bonds were a good idea and I largely agree with this article: Analyzing the Benefits of Electoral Bonds (carnegieindia)
The RBI ordered card companies to stop routing some commercial payments through third-party intermediaries. These payments are layered with the business at one end making a card payment to the intermediary, which then transfers money to the recipient's bank account. While regular card transactions can be tracked end-to-end, going via an intermediary can make it difficult to identify the recipient of the funds. (reuters, rbi)
The Enforcement Directorate is seeking details on overseas transactions by Paytm Payments Bank. The Directorate is looking into various matters, including the use of third party platforms to transfer funds from Paytm Payments Bank's platforms overseas. (reuters)
Govt panel examining Chinese FDI flow into Paytm Payments Services (livemint)
Abandon Paytm now. (rbi)
Why Louis Vuitton and Dior can't bring their shoes to India (livemint)
RoW
I do not expect to see the U.S. dollar lose its status as the world's reserve currency anytime soon, nor even see a significant decline in its primacy in trade and finance. Recent developments that some have warned could threaten that status have, if anything, strengthened it.
The Dollar's International Role (federalreserve)
Governments are mis-selling the energy transition if they fail to acknowledge the shift to a less-polluting system will lead to higher energy costs. (ft, telegraph)
Once-bustling office buildings are empty. Inevitably, some landlords will go bust. And banks that lent to developers will get burned. (cnn)
The UK slipped into a mild recession in the second half of 2023 (bloomberg)
Tax cuts can never deliver growth. They just make the rich richer.
Austerity cannot deliver growth. It just crushes public services and the pay of those who work for them.
Interest rate hikes have never delivered growth. They just boost bankers bonuses whilst crushing the wellbeing of those households who have mortgages and those who pay rent.
Pay restraint cannot deliver growth. In fact, it is designed to deliver the exact opposite.
Sunak promoted everything that created a recession. (taxresearch)
Farmers’ protests swept Brussels, blocking the European district and crashing Place Luxembourg in front of the European Parliament. The protests were also happening in other countries: France, Italy and earlier in January in Germany. (feps-europe)
Health
Over 100 nations falling below the replacement rate fertility of 2.1 births per woman. (The Last Baby)
Women in China aren't having kids (businessinsider)
Increasingly, measles outbreaks have been taking place in wealthier countries, largely because of vaccine refusal. (nature)
Why Americans Suddenly Stopped Hanging Out (theatlantic)
Exercise for the treatment of depression: even low intensity activities such as walking or yoga are beneficial. (bmj)
A.I.
Sora is a data-driven physics engine. It is a simulation of many worlds, real or fantastical. The simulator learns intricate rendering, "intuitive" physics, long-horizon reasoning, and semantic grounding, all by some denoising and gradient maths. (@DrJimFan)
Air Canada must honor refund policy invented by airline’s chatbot (arstechnica)
US patent office confirms AI can’t hold patents (theverge)
Young Chinese women turn to AI boyfriends (straitstimes)
Meme of the Week
