Eideard

Consumers will not need any form of wallet to go shopping by 2016, the online payment firm Paypal says. But it is not the UK or the US that is leading the march to empty their pockets, it is Turkey, not known for its early adoption of new technology.

The death of cash has been talked about for a while. Claims were made by Visa a few years ago that the date would be 2012, which now seems unlikely. Now analyst firm Forrester, in a report paid for by Paypal, is the one wading in on the debate saying the tipping point is just five years away.

Near-field communication (NFC) on both mobile phones and in cards allows quick payments for smaller purchases by using a radio signal that activates when the chip is placed near a reader.

Market research company Allied Business Intelligence thinks that the watershed – or wallet-shed – moment will be even earlier, in 2014…

The countries which most prominently use credit cards – the US, the UK and Canada – have been relatively slow to change their ways. But one surprising country is amongst the leader in trialling the way forward for mobile payments – Turkey…

There are not that many branches of banks outside Istanbul so, until very recently it has been a cash-based society. ATMs are a fairly new concept. Not all cards work in all machines and the banking industry has been very fragmented.

In a country which is still classed as a “developing nation”, no one system of electronic transfer has yet become established so new ideas have less of a problem getting accepted. Another advantage it has is that the country has a relatively young population, willing to try new things who have not developed long-term habits which are notoriously difficult to change.

Mobile phone operator Turkcell is responsible for one of the success stories. Within four months of launching, 100,000 pre-paid cards registered on mobile phones were sold. They are used to buy goods from shops or for sending money and can be used without a bank account. Money can even be taken from ATMs.

Ironically, there is no money to made from cash transactions so making it as easy as possible to spend digital money is in a company’s interest, taking small percentages of the cost of payment as a transaction fee and lowering the cost of processing physical money.

It is those smaller transactions, still predominantly in cash, that could be the biggest change…

It’s all OK with me. As long as I am assured by my bank these transactions are secure – and insured by the bank – I only foresee one problem. As much of a geek as I am, since I’ve retired I have no need for a smartphone. So, my cell phone is capable of nothing more than voice calls.

An Australian woman is suing the nation’s top four banks for their alleged role in laundering money from her teenage son’s $200,000 eBay scam that afforded him a $6,000-a-day playboy lifestyle.

Australian media reported that in 2007, the then 14 year old boy was making so much money selling non-existent laptops, mobile phones and watches on eBay he could afford to book a $4300-a-night penthouses overlooking Sydney Harbour, fly friends interstate for lavish parties and hire limousines to take him to the beach…

Reports said she was seeking an apology from the Commonwealth Bank, ANZ, Westpac and NAB for ”unconscionable conduct” after allegedly allowing her son to open numerous bank accounts with debit cards “without reasonable scrutiny”.

She claims the banks ignored her or refused to discuss the matter for privacy reasons when she warned them they had issued accounts that were being used by a minor to bank illegal funds, reports said.

”He was an intelligent boy who worked out how to cheat the system and play it for all it was worth,” she told Australia’s Sun Herald newspaper. ”As his parent and legal guardian, I begged the banks to stop giving him accounts and debit cards but each time I got nowhere because of the Privacy Act…”

Police eventually arrested the boy at school after many of the frauds were linked to an IP address attached to a classroom computer.

Reports said that during the past four years, she had reluctantly handed her son to the police 15 times.

Sounds like banks in Oz would have been happy to help out Bernie Madoff given half a chance.

Go for it, Mom. Make them own up for their scandalous lack of standards.

Greece would be in much better shape now if it had never joined the euro zone, or if it had been kicked out in 2004 when it admitted that it had lied about its finances to join the club. So would the rest of Europe.

So why not get out now?

One answer is the same one that was given when Greece’s cheating was revealed: Legally, there is no way out. The euro was designed to be the Roach Motel of currencies. Once you enter, you can never leave. There is no provision for departure.

The sophistry in this article is that the lies, the cheating, was “revealed”. Hogwash. Everyone knew what was going on. Including the Greek politicians who stood in line to gobble up the Euro dole.

But, of course, there is a way out. It would be messy, and perhaps disastrous. But no one is going to send an army to Athens to force it to keep the euro.

If Greece were to follow the example set by Argentina nearly a decade ago, it would simply convert its debts from euros into its old currency, the drachma, at the old exchange rate of 340.75 drachmas to one euro. It could also convert euro currency in the country at the same rate. So if you owned one million euros in Greek bonds, they would be converted to bonds with a face value of 340.75 million drachmas.

With a printing press available, Greece could meet those obligations. Of course the drachma would soon be worth a lot less — perhaps 1,000 to the euro. So bondholders would have lost two-thirds of face value…Greece would suddenly be forced to run a balanced budget, or to borrow from its own citizens, whose savings would have lost much, if not most, of their value.

For Greece to pull that off, it would probably have to do it over a weekend, without leaks of what it was planning. If people got wind of what might be coming, there would be an immediate run on Greek banks…

Think there are any Euro politicians who could keep that kind of secret?

…Greece remains woefully uncompetitive in export markets, and there is no credible plan to get its economy growing. The rest of Europe uses the threat of cutting off funds to force more and more austerity on the Greek government.

The message from Greece now may be summarized as, “I’m small. I’ve suffered. You can afford to rescue me. If you don’t, I can create chaos for all of you.”

Part of the earlier spring agreement Greece agreed to included – eventually – a replacement rate of 1 for 10 as civil servants retired. Some of the hacks on board before the government began the hiring tsunami that followed EU membership. Well, 18-20,000 retired who should have been replaced by 2,000 tops. The government hired 24,000.

Uncle Sam could use better debt collectors. Fraudsters, polluters and other corporate and white-collar miscreants owe government agencies more than $65 billion in fines. Only pennies on the dollar are ever paid. With private firms like Contrarian Capital making millions buying claims from creditors, maybe they and the feds should do business.

Some wrongdoers are going to be write-offs from the start. In 2009, a court ordered officers of National Century Financial Enterprises, an Ohio healthcare finance company, to cough up a whopping $2.38 billion for defrauded investors. They’ve paid only about $3.1 million, and with many in prison, there’s little hope for more…

Even with billions at stake during crunching budgetary times, the feds are bad at dunning deadbeats. A just-released study found that courts scatter responsibility for collecting criminal judgments across the nation’s 94 U.S. attorneys’ offices. The result has been a 4 percent payment rate. Other agencies have been similarly inefficient. The chief mining regulator has collected about 5 percent of fines. Customs, about 31 percent…

There may be a better way. Banks and hedge funds make big bucks buying bankruptcy and other claims at a discount and then pursuing debtors for a higher payout. Distressed-asset firms like Contrarian bid for shares of the potential recovery from Bernard Madoff’s Ponzi scheme. Silver Point Capital and other funds similarly traded in Lehman Brothers bankruptcy claims. Why not federal claims against corporate wrongdoers?

The government still wouldn’t get paid in full. Lehman claims traded recently at 18 to 21 cents on the dollar, and Madoff shares at around 30 cents. But that’s a lot better than 4 percent, and figures are higher for better risks.

Let’s work at getting something back from the creeps who have been stealing from the public pot. It ain’t going to hurt too many friendships at the electoral country club, guys.

I’m sorry, Congressman, you’re small-minded, too!
Daylife/Reuters Pictures used by permission

Elizabeth Warren, it’s not you they hate. It’s what you represent. You want to be an honest cop when so many before you in Washington have looked the other way and pretended that the banking industry could police itself.

I can’t think of a better reason why this presidential adviser shouldn’t be the new chief of an unfettered Consumer Financial Protection Bureau…

As the debate about Warren — and what she stands for — rages on, here’s a look at why the banks despise the idea of her as a strong regulator:

Weak consumer regulation was the norm, but banks love the status quo – Prior to the Dodd-Frank financial reform law, which established the consumer bureau, there simply was no real consumer watchdog over banks…

Mortgage abuses were rampant – More than three years after the biggest financial meltdown since 1929, we’re still trying to unravel what the banks did to foul up the global financial system. Did the banks fudge mortgage documents simply to grease the way to securitizing loans? Did they trigger foreclosures even when homeowners were paying their bills? Did they push people into bad loans they knew they would default on? If any or all of these things were true, it certainly wasn’t because the banks were over-regulated…

Credit abuses are rampant – Take a look at your credit card disclosure statement. Do you have any idea how much you will owe if you’re late or lose your job and can’t pay? This is not a mystery to the banks, who have conceived elaborate formulas for charging you more money for credit…

Junk fees are abundant – You ever wonder what all those fees are that creep into your mortgage closing statement? They seem to come out of nowhere. A lot of them are negotiable or completely unnecessary…

Making simple math simple again – Do you know what a LIBOR index is and “lifetime maximum rates?” The banks don’t want you to know this because this is how much your monthly payment can climb based on a variable index. If the index goes up, so does your payment…

So nothing personal Elizabeth Warren.

It’s not the way you dress or the fact that you teach at Harvard and have been an advocate for banking customers. Or that you’re “so bloody disagreeable,” as one former Wall Street banker put it. It’s just that you’re so darned honest about banking abuses and are one of the best people in the country to enact change.

Bravo! RTFA. I probably disagree with John Wasik as often as I agree – about economics, investing, finance. That’s why it’s called the dismal science. This opinion piece is about honestly and competence. Something Congress knows little about – and cares even less.

In a major crackdown on online gambling, the FBI and U.S. Attorney’s Office have charged the founders of the three biggest Internet poker sites with fraud, illegal gambling and laundering billions of dollars in illegal gambling proceeds.

The FBI said Friday it’s indicting 11 defendants — including the founders of PokerStars, Full Tilt Poker and Absolute Poker — with bank fraud, money laundering, and illegal gambling offenses. The feds also seized five Internet domain names used by the companies to host their poker games and issued restraining orders against 75 bank accounts in 14 countries used to process payments. The U.S. attorney’s office is also seeking $3 billion in damages. The defendants could face maximum penalties of 30 years in prison $1 million fines.

Visitors to FullTiltPoker.com and AbsolutePoker.com Saturday were met with a notice from the FBI declaring the domain names had been seized by federal authorities — along with a reminder that illegal gambling is a federal crime.

PokerStars posted a statement early Saturday through its computer software and on Twitter saying the company has had to suspend real money play to customers based in the U.S., according to the Associated Press.

“Please be assured player balances are safe. There is no cause for concern,” the statement said. “For all customers outside the U.S. it is business as usual…

The feds say the sites violate the Unlawful Internet Gambling Enforcement Act passed in 2006. The offshore poker companies have argued they operate outside the reach of U.S. law. The U.S. government considers Internet gambling to be illegal. Still, it’s been estimated up 15 million Americans gamble up to $6 billion per year online.

Like most American morality the question comes down to money. It’s why most drugs – especially marijuana – were made illegal. And booze – for a spell. Leadership and ethics once again are missing in action from the arena of gaming and American politics.

People who want to gamble will find a way. One of the greatest temptations in archaic moralizing is the opportunity to violate a law you know is stupid.

Switzerland may soon be as famous for its haste at freezing shady money as for its zeal for looking after it.

After blocking bank accounts of the deposed Tunisian and Egyptian presidents, the country has done the same with what it calls the “possible assets” of Libya’s Muammar Gaddafi, whose family fortune, according to the wildest estimates, may be in the tens of billions of dollars.

But the problem of corrupt dictators isn’t new, and would be better addressed ahead of time. It’s nice to freeze the money. It would have been better not to accept it.

Doing so is not as tricky as it sounds. Banks and governments have the financial and legal tools to clamp down on dictators’ looting of their countries’ resources even while they’re still deemed legitimate leaders…

Those rules, agreed by all countries that are part of an international body called the Financial Action Task Force (FATF), impose a duty on banks to investigate whenever they suspect unusual financial activity by a political leader with past or present responsibilities. But in the case of sitting leaders, it seems that banks haven’t been looking very hard…

Another serious problem is international politics. It’s easy enough to freeze out discredited regimes like North Korea and Iran. But it would have been harder for, say, a French or Italian bank to treat Gaddafi as a pariah when he was setting up his tent in Rome or Paris before shaking hands with those countries’ leaders…

As long as western banks and governments deliberately look the other way and accept cash in the name of raison d’etat, there’s little hope the looting will stop. But if they really wanted to change, they could start by applying the existing rules.

They all should be filling out SAR’s [Significant Activity Reports] at a minimum. Keeping their government apprised of what appears to be suspicious funds entering the country’s banking system,

I don’t agree 100% with Pierre Briançon’s editorial. I’d rather see the money come in the door exactly so that it may be frozen when circumstances require it. Otherwise, who knows where it may be?

Daylife/Reuters Pictures used by permission
You get to know “this much”

Tony Blair made made a profit of at least £710,000 last year from a mysterious web of companies set up to further his business interests, it can be revealed.

The former prime minister’s companies also declared net assets of £2.2 million – four times what they were worth last year – suggesting Mr Blair’s “pulling power” is as strong as ever.

The profits, funnelled through an “opaque” and highly complex web of financial structures, was declared to Companies House as it closed for business for Christmas last week.

The money is believed to have come from his often controversial private work, including his six-figure speaking fees, his banking and insurance consultancies, including work for JP Morgan, and his pay from advising Middle Eastern and African regimes.

Mr Blair – who has made at least £20million since leaving Downing Street – has a commercial consultancy, called Tony Blair Associates, plus paid jobs advising a US bank and a Swiss insurer.

In addition, millions of pounds have passed through two parallel company structures, called Windrush Ventures and Firerush Ventures, in the last three years.

Mr Blair has so far refused to discuss what these financial structiures, centered on a pair of mysterious limited partnerships, are for…

The public declarations come in the wake of claims that Mr Blair is earning up to £100,000 for making guest appearance and was paid a reported £600,000 signing on fee by the prestigious Washington Speakers Bureau…

He is also said to have earned around £6 million in consultancy fees, including £500,000 a year from Zurich Financial Services, £2 million from JP Morgan, the investment bank, and another £1 million from the Kuwaiti Royal Family…

The accounts give no indication of how much Mr Blair pays himself from the fees and other money channelled through his companies.

The profitable sleaze that follows upon time in office is no surprise. No doubt, some of this may be legitimate charity, legitimate enterprise. I wonder, though, how much is payment for services rendered while in office?

For some Florida residents, the price of getting out of foreclosure will include taking on a second mortgage — payable this time to their lawyers.

The new mortgage, which takes effect only if the foreclosure is dismissed and the homeowner’s debt to the bank is reduced, is controversial among defense lawyers, some of whom call it “creepy” and “crass.” Yet even they acknowledge it offers a solution to a vexing question: How do they get paid?

After recent revelations that banks were sloppy in processing many foreclosures and in some cases lack standing to seize a house, potential clients seeking to challenge their lenders are flocking to lawyers. But while these distressed homeowners might have a case, they generally lack the resources to pay legal fees. Being in foreclosure usually means being broke…

Foreclosure defense is a new legal specialty whose strategies and techniques are still being worked out. Peter Ticktin, who has some 3,000 foreclosure clients, says his plan to collect fees by taking another mortgage on his clients’ properties has already been copied by other firms.

The Ticktin mortgages resemble the loans that the clients originally got from Countrywide, GMAC and other lenders. Each will be a contractual obligation with the law firm, labeled as a mortgage and structured like one, too, with the client paying a certain sum every month and using the house as collateral…

Mr. Ice, Mr. Ticktin and many other Florida foreclosure lawyers typically receive a few hundred dollars a month from each client. To supplement that, they seek legal fees from the banks they successfully challenge as well as contingency fees…

In foreclosure cases, however, the client pays the contingency fee. While such an approach is sometimes used in commercial litigation, this is a first for consumer cases, said Lester Brickman, a professor at Cardozo Law School in New York.

“For a lawyer to supplement or replace the banks as a long-term mortgage creditor of homeowners leaves me a little queasy,” said Mr. Brickman, an expert on contingency fees. “It’s an invitation for the public to say, ‘There go the lawyers again.’ ”

That’s exactly what I would say – here and now. When the only solutions to problems in a troubled economy guarantee reward to only one group of participants – lawyers – I’d say there’s something as corrupt with the solution as there was in the creation of the problems.

The South American giant is preparing to use its first locally-designed microchip in cattle earrings, a device that could eventually help authorities crack down on destruction of the Amazon rain forest caused by roaming herds.

Produced by state-funded firm Ceitec, the “Chip do Boi” or “Cow Chip” is part of home-grown innovation efforts that Brazil hopes will help it overcome challenges in its sprawling economy and over time make it an exporter of niche technology…

“Brazil has competitive advantages in areas like agriculture and clean energy, and it makes sense for the country to maintain those advantages through technological innovation,” said Ceitec chief executive Cylon Silva, a theoretical physicist with a PhD from the University of California, Berkeley.

“There’s no way that a country of Brazil’s size and influence can go without an electronics industry…”

The cattle trackers can help ranchers demonstrate their cows have not been exposed to illnesses and may be crucial for creating a database of cattle showing which animals grazed on recently deforested land.

Brazil’s state development bank said last year it will begin requiring the ranchers it finances to show where their cattle have grazed, possibly using such devices…

Brazil’s high-tech sector still faces challenges including weak and unequal education systems, notorious government bureaucracy, and chronic delays in project execution…

The country is working to make sure that doesn’t happen…

Silva says it will take decades for the country to be competitive in global chip markets but that the success of firms with high-technology products such as Brazilian aircraft maker Embraer shows Brazil can produce much more than just commodities.

“I think there is a real opportunity for a country with the resources that Brazil has to become a player in this market,” said Silva. “If we can manufacture planes, why not think that we can manufacture integrated circuits?”

Bravo!

BTW – this is being implemented around the world among significant cattle producing countries. Only a few, like here in the GOUSA, have managed to encounter lawsuits from Christian groups upset over “the number of the beast” being a satanic plot.