Since the late 2010s there has been re- newed debate about the merits and demer- its of progressive wealth taxation. This debate has largely been motivated by the increase in wealth concentration in recent decades. In the United States, the share of total household wealth owned by the 0.0001% wealthiest Americans—a group that includes 18 individuals with more than $50 billion in wealth in 2021—has been mul- tiplied tenfold since Forbes started publish- ing data on the richest Americans in 1982. Wealth concentration has increased partic- ularly fast during the Covid-19 pandemic (see Figure 1). All estimates show a dra- matic increase in wealth concentration since the late 1970s (see Saez and Zucman, 2020 for a discussion of the data and reconcili- ation of the various estimates). Moreover, as wealth concentrated, the ratio of wealth to national income doubled from less than 3 in the late 1970s to over 6 in 2021. Top- end wealth is large relative to the economy, and therefore a sizable potential tax rev- enue source (Saez and Zucman, 2019).

To shed light on the practicality and de- sirability of taxing wealth, this paper stud- ies the historical experience with wealth taxation in Europe. Using new research on the distribution of wealth over time in Eu- rope, we show that the European wealth taxes had a narrow base, due to large exemptions, tax avoidance, and tax eva- sion. We explain why such exemptions were granted and how they undermined Euro- pean wealth taxes, leading in many cases to their repeal.

Wealth Taxation: Lessons from History and Recent Developments (Emmanuel Saez / Gabriel Zucman)

1. Politics
Jair Bolsonaro will be defeated in Brazil's 2022 presidential election.

The US GOP will still suffer identity and leadership issues, despite a surge in conservative popularity.

Roe v Wade will suffer a defeat, adding to the GOPs identify issues going further.

The border will remain a political issue and will likely not improve during 2022.

American hegemony will take further hits, as battles with Russia and China continue on.

Boris will remain in power.

The UK monarchy will not fail.

2. Economics
American society will not become more equitable.

American jobs will continue to unbundle from the previous era's form of employment. More for less. 

In America, Cities will continue to step up to fill the void left from the lack of proper governance from states and the federal government. 

Influencers, a new phenomenon, will be replaced by virtual influencers. 

Work from home (WFH) will continue on, presenting new problems and new joys for the workforce, landlords and employers. 

Antitrust will prevail in the battle between politics and technology companies.

ETH will overtake BTC in usability, utility and eventually price per unit. 

NFTs are here to stay. 

Inflation will pass. 

3. Environment
Plastic will continue to come under fire and suffer bans en masse, but plastic companies will not stop making plastic (at least this year).

Ecocide will official become law in some nations.  

Animals rights will increase in the rich world and in developing nations dependent on tourism. 

 

 

A Legal Framework for Decentralized Autonomous Organizations

This analysis was written by David Kerr (Principal, Cowrie LLC) and Miles Jennings (General Counsel, Crypto, Andreessen Horowitz). Special thanks to Marc Boiron, Aaron Wright, Molly McQueen and Connor Spelliscy for their contributions and insights. David Kerr is a recipient of a research grant from the DAO Research Collective.

Introduction The United States regulatory environment surrounding digital assets presents an extraordinary challenge for blockchain and smart contract-based protocols. In the absence of comprehensive legislation addressing the complexities of this developing technology, individual regulatory agencies have been forced to provide their interpretations of how regulations should be applied to situations and technologies, well beyond what was considered when the current laws and regulations were enacted. Although it is universally agreed that comprehensive reform and new legislation is a necessity, the reality exists that the developers and users of blockchain technology have been left to navigate a patchwork regulatory environment insufficient to address relatively simple issues related to digital assets, let alone the additional complexity accompanying the decentralized alternatives to traditional financial service offerings available through smart contract-based protocols. The vast majority of blockchain networks and smart contract-based protocols are organized as, or intend to implement, DAOs, which are member controlled organizational structures that operate absent a centralized authority. 3 While blockchain networks utilize a number of different consensus mechanisms, DAOs of smart contract-based protocols are typically facilitated by a set of governance-related smart contracts that have specified control rights with respect to the smart contracts making up the underlying protocol, all of which are built on distributed ledger technology, most commonly the Ethereum blockchain. These governance smart contracts disintermediate transactions between counterparties by automating the decision-making and administrative processes typically performed by traditional management structures. Decentralization of a given protocol occurs when control (e.g., governance) of the non-immutable aspects of a protocol’s smart contracts is passed from the developers to the members of a DAO via the activation of governance smart contracts. Decentralized Finance (“DeFi”) protocols are one example of smart contract-based protocols. DeFi protocols provide alternative mechanisms to perform many traditional financial services that are, often times, highly regulated themselves (i.e., payments, swaps and derivative transactions, insurance, asset trading, lending and investing). As the functionality of many DeFi protocols deviates significantly from traditional financial services, significant interpretive obstacles exist in determining the manner and extent that existing statutory authority is applicable. Although the SEC, CFTC, FinCEN, OFAC, IRS, Department of Treasury and state regulators have issued guidance and interpretations concerning digital assets, the issues highlighted in that guidance and the concentration of accompanying enforcement actions has resulted in a prioritization of the following: (i) identifying the applicability of SEC and CFTC registration requirements, (ii) taxation of virtual currency as property and the need for taxpayers to include virtual currency activities on their tax returns and (iii) the implementation of BSA compliant Anti-Money Laundering (“AML”) and Know Your Customer (“KYC”) programs.

Read more at a16z

It turns out Amazon collects a striking amount of information from customers. Perhaps more than we expected. U.S. Amazon customers can obtain their data by filling out a form on Amazon.com, here is the link. - Editors

"A look at the intimate details Amazon knows about us"

Friday, 19 November 2021 11:27 GMT

By Chris Kirkham and Jeffrey Dastin

Nov 19 (Reuters) - As a Virginia lawmaker, Ibraheem Samirah has studied internet privacy issues and debated how to regulate tech firms' collection of personal data. Still, he was stunned to learn the full details of the information Amazon.com Inc has collected on him.

The e-commerce giant had more than 1,000 contacts from his phone. It had records of exactly which part of the Quran that Samirah, who was raised as a Muslim, had listened to on Dec. 17 of last year. The company knew every search he had made on its platform, including one for books on "progressive community organizing" and other sensitive health-related inquiries he thought were private.

"Are they selling products, or are they spying on everyday people?" asked Samirah, a Democratic member of the Virginia House of Delegates.

Samirah was among the few Virginia legislators who opposed an industry-friendly, Amazon-drafted state privacy bill that passed earlier this year. At Reuters' request, Samirah asked Amazon to disclose the data it collected on him as a consumer.

The company gathers a vast array of information on its U.S. customers, and it started making that data available to all upon request early last year, after trying and failing to defeat a 2018 California measure requiring such disclosures.

Seven Reuters reporters also obtained their Amazon files. The data reveals the company's ability to amass strikingly intimate portraits of individual consumers.

Amazon collects data on consumers through its Alexa voice assistant, its e-commerce marketplace, Kindle e-readers, Audible audiobooks, its video and music platforms, home-security cameras and fitness trackers. Alexa-enabled devices make recordings inside people's homes, and Ring security cameras capture every visitor.

Such information can reveal a person's height, weight and health; their ethnicity (via clues contained in voice data) and political leanings; their reading and buying habits; their whereabouts on any given day, and sometimes whom they have met.

One reporter's dossier revealed that Amazon had collected more than 90,000 Alexa recordings of family members between December 2017 and June 2021 – averaging about 70 daily. The recordings included details such as the names of the reporter's young children and their favorite songs.

Read the rest at Thompson Reuters Foundation.

 

OVERVIEW: OUTLOOK REMAINS STABLE
GDP growth has likely lost some momentum in the third quarter, after accelerating slightly in Q2 on the back of stronger private consumption and rebounding exports. In August, the Chicago Fed National Activity Index—a leading indicator for GDP—moderated notably from July due to weaker industrial output and private consumption activity. Moreover, consumer confidence dropped to its lowest level since February in August, while the increase in nonfarm payrolls eased notably in the same month and average retail sales declined in July–August—all further pointing to a slowdown in private consumption in the quarter. Furthermore, despite remaining upbeat in July–August, the ISM manufacturing PMI was below Q2’s average. On the Covid-19 front, daily new cases of the virus have remained elevated in recent weeks, despite solid vaccination progress, which is likely dampening GDP prospects for Q4.

GDP will expand rapidly this year as the impact of the pandemic fades and the labor market recovers. In 2022, growth should moderate on a less favorable base effect, but recovering household consumption and pentup demand will likely keep momentum upbeat nonetheless. Uncertainty over new Covid-19 variants and ongoing tense relations with China pose downside risks. FocusEconomics panelists see GDP growing 6.1% in 2021. In 2022, our panel sees the economy expanding 4.1%, which is unchanged from the previous month’s forecast. • Inflation ticked down to 5.3% in August from 5.4% in July. This year, inflation is seen overshooting the Fed’s 2.0% target due to ultra-low interest rates and rebounding economic activity. In 2022, price pressures are seen moderating as some supply chain disruptions ease and output normalizes. FocusEconomics panelists see inflation averaging 4.2% in 2021. In 2022, our panel expects inflation to average 2.9%, which is up 0.2 percentage points from the previous month.

At its 21–22 September meeting, the Fed kept the target range at 0.00%– 0.25% in order to spur the economy, but hinted at some tightening in the form of tapering its QE purchases due to healthier economic indicators and stronger price pressures in recent months. Most panelists see the first rate hike in 2023, although a minority expect some tightening in 2022. Our panelists project the federal funds rate to end 2021 at 0.25% and 2022 at 0.33%.

The dollar index appreciated slightly in recent weeks, likely due to a more hawkish tone from the Fed. On 24 September, the dollar index traded at 93.3, strengthening 0.4% month-on-month. Looking ahead, the course of the pandemic, the trajectory of the U.S. 10-year yield rate and geopolitical tensions will have a key bearing on the direction of the USD.

REAL SECTOR
ISM manufacturing index rises slightly in August The Institute for Supply Management (ISM) manufacturing index ticked up to 59.9 in August from 59.5 in July, consequently the index remained wellabove the 50-threshold that separates expansion from contraction in the manufacturing sector. August’s slightly stronger expansion was the result of faster growth in new orders and production. That said, employment levels decreased notably relative to the previous month. On the price front, input prices continued to rise on the back of higher raw material prices but at a slower rate compared to the month prior.

FocusEconomics Consensus Forecast panelists expect industrial production to increase 6.0% in 2021, which is unchanged from last month’s forecast. In 2022, panelists see industrial production rising 4.0%, which is down 0.1 percentage points from the previous month. FocusEconomics Consensus Forecast panelists expect GDP to grow 6.1% in 2021, which is down 0.3 percentage points from last month’s estimate. For 2022, the panel expects the economy to expand 4.1%, which is unchanged from last month.

Retail sales rebound in August Retail sales grew 0.7% in month-on-month seasonally-adjusted terms in August, which contrasted July’s 1.8% decrease. Looking at the details of the release, August’s pick up was broad-based. Food and beverages and general merchandise stores output gained steam, while motor vehicle and parts dealers production contracted at a softer rate. Lastly, non-store retailer sales rose at a stronger rate, while gasoline stations sales moderated. On an annual basis, retail sales rose 15.1% in August, which matched July’s expansion. Meanwhile, the trend improved significantly, with the annual average growth of retail sales coming in at 15.3% in August, up from July’s 14.3% reading. Commenting on August’s print, Francis Généreux, a senior economist at Desjardins, stated: “The growth in retail sales in August, particularly if we exclude motor vehicles, is encouraging and suggests the new wave of the pandemic is not having a major impact on the economy. This could further reassure Federal Reserve officials.” FocusEconomics Consensus Forecast panelists see private consumption growing 7.9% in 2021, which is down 0.1 percentage points from last month’s forecast. For 2022, the panel sees private consumption increasing 3.8%, which is down 0.3 percentage points from the previous month.

GDP Growth

GDP growth lost some momentum in Q2, after hitting an over 10-year high in Q1. The slowdown was predominately driven by a weaker external sector as export growth tapered and import growth strengthened. However, domestic demand rebounded notably in the quarter—hitting an over 11- year high—as both private consumption and fixed investment surged. Turning to Q3, year-on-year growth is likely losing further momentum due to a slightly less favorable base effect, but the economy should be strengthening on a sequential basis. In August, the government began disbursing electronic vouchers of HKD 5000 to permanent residents, which should be stoking private spending. Moreover, the private sector PMI continued to point to an expansion in activity for July, boding well for GDP. Nevertheless, the government’s “zero Covid-19” strategy continues to hamper the tourism sector amid prolonged travel restrictions. GDP should expand robustly this year, after a two-year-long recession exacerbated by political unrest and Covid-19. A recovering global economy should power external demand, while domestic activity should gradually strengthen, supported by government stimulus. That said, uncertainty over the spread of the Delta variant poses a downside risk to the outlook. 

Real Sector

The IHS Markit Purchasing Managers’ Index (PMI) fell to 51.3 in July from June’s 51.4. As a result, the index remained above the 50-threshold, but pointed to a moderating improvement in the private sector from the previous month. The slight moderation was predominately due to falling employment levels due to rising wage costs. Nevertheless, output and new orders were relatively unchanged accelerating slightly over the previous month. Commenting on the latest reading, Jingyi Pan, economics associate director at IHS Markit, noted: “Demand and output growth accelerated, which had been positive signs, although foreign demand appeared to have softened once again as Covid-19 disruptions remained a prevalent issue abroad. Price pressures also persisted for Hong Kong SAR private sector firms.”

Retail sales grew 2.8% year-on-year in June (May: +7.8% yoy). The outturn marked the worst reading since January. The reading reflected a broad- based downturn across the major sectors, with fuel, supermarkets and food and alcoholic beverages all contracting in June. Lastly, jewelry, watches and valuables sales moderated, while clothing and footwear sales increased. Meanwhile, the trend improved notably, with the annual average variation of retail sales coming in at minus 1.7% in June, up from May’s minus 4.0%.

Gold prices decreased over the past month, as an improving U.S. labor market and expectations for a more hawkish Fed ahead weighed on demand. On 6 August, gold closed the day at USD 1,764 per troy ounce, which was 2.2% lower than on the same day of the previous month. However, the price was down 7.1% on a year-to-date basis and was 14.1% lower than on the same day last year. In mid-July gold prices increased due to a gradual fall in the U.S. 10-year Treasury yield rate, which hit the lowest level since early February at the start of August. Moreover, concerns over the Delta variant spreading to the U.S. and parts of Europe over the past few weeks likely cast a cloud over the economic recovery and supported safe-haven demand, in turn pushing prices higher. Nevertheless, gold prices fell notably since the start of August as healthy U.S. labor market data weighed on safe-haven demand. Moreover, markets are now expecting the Fed to begin tapering its QE purchasing program, which should have further weighed on demand for gold. Gold prices are forecast to stay close to their current level later this year as easing safe-haven demand is offset by higher global inflation and still-accommodative monetary policy. The ongoing pandemic and the path of global bond yields are key factors to watch.

There is a wide range of price scenarios among our panelists, due to gold’s vulnerability to shifts in global sentiment and events. The minimum forecast sees gold averaging USD 1,650 per troy ounce in Q4 2021, whereas the maximum forecast sees gold averaging USD 2,020 per troy ounce.

Thank you Focus Economics

 

Hungary's Economic Outlook Improves

Overview
The recovery should have continued in Q2, after improving domestic demand and a more upbeat external sector underpinned the economy in Q1. A month-on-month rebound in industrial production in May and significantly higher business confidence in the quarter suggest that private sector activity gained steam. Meanwhile, rising consumer confidence throughout the period, rebounding retail sales and a lower unemployment rate on average in April−May hint at strengthening household spending. Moreover, a significantly expansionary fiscal stance—as confirmed by budget data up to June—likely further supported activity. Meanwhile, in mid-July, the government approved a raft of measures to support credit extensions to small businesses and attract foreign investment. Less positively, the European Commission recently proposed further delaying its verdict on Hungary’s recovery plan amid elevated bilateral tensions. • The economy is poised to bounce back robustly this year. The gradual removal of restrictions domestically and abroad, expansionary fiscal and monetary policies, and sizable inflows of EU funds should rekindle domestic and foreign demand. However, the spread of new Covid-19 variants clouds the outlook. FocusEconomics analysts see GDP growing 6.0% in 2021, which is up 0.1 percentage points from last month’s forecast, and 4.8% in 2022. • Inflation rose to 5.3% in June from 5.2% in May, marking the strongest print since October 2012 and moving further above the upper bound of the Central Bank’s 2.0%–4.0% target range. A low base effect, higher energy prices, recovering activity and loose fiscal and monetary policies will see inflation trend higher this year than in 2020. - Focus Economics

Monetary Policy

At its 27 July meeting, the Monetary Council of the Hungarian National Bank (MNB) decided to raise its base rate to 1.20% from 0.90%, marking the second consecutive increase. Moreover, the Bank hiked the overnight deposit rate, the overnight collateralized lending rate and one-week collateralized lending rate by 30 basis points to 0.25%, 2.15% and 2.15%, respectively. Additionally, the Bank decided to terminate the use of the long-term collateralized lending facility. The MNB’s decision was again aimed at curbing persistent inflationary pressures, re-anchoring inflation expectations and reducing upside risks, amid a robust recovery and buoyant wage growth. Headline inflation rose to 5.3% in June, moving further above the Bank’s target range of 3.0% plus or minus 1.0 percentage point, while core inflation accelerated further to 3.8%. The Bank now expects inflation to remain above its tolerance band until the end of this year, before falling back into that range at the beginning of 2022. On the growth front, the economy seemingly continued to perform strongly in Q2 amid a fast vaccine rollout and the gradual lifting of restrictions. As such, the Bank sees the economy expanding by around 6.0% this year and 5.5% in 2022. Looking ahead, the Bank sees supply disruptions, higher commodity prices and international freight costs, along with recovering activity, as the main upside risks to inflation. Therefore, it outlined that July’s rate increase will be the second of a cycle of hikes designed to “ensure price stability, avoid second-round inflationary effects and to anchor inflation expectations”, which will last until “the outlook for inflation stabilizes around the Central Bank target and inflation risks become evenly balanced”. - - Focus Economics

Since Orban won reelection, however, his behavior has called into question not only his democratic bona fides, but also his basic trustworthiness as an ally of the United States and member of the democratic Western world. Increasingly, Hungary is behaving like a rogue state. - Brookings Institute

 

Brent crude prices continued to gain ground over the past month, hitting an over two-and-a-half-year high in early July, boosted by a tight production becoming increasingly outstripped by demand amid a sustained global economic recovery. On 9 July, oil traded at USD 75.6 per barrel, which was up 4.6% from the same day last month. Moreover, the benchmark price for global crude oil was up 78.0% from the same day last year and was 45.8% higher on a year-to-date basis. The preliminary agreement that emerged from the OPEC+ meeting on 1 July pointed to an output increase of 400 million barrels per day (mbpd) per month for the August–December period, which was softer than the expected rise of 500 mbpd for August. This, coupled with the group’s plans to extend the output cut deal from April 2022 until end-2022, bolstered prices. That said, the final agreement fell through due to objections from the UAE over the calculation of production targets, fueling fears of a supply crunch in August if a deal on higher production is not reached, which further boosted prices in turn. This came amid a sustained global economic recovery which bodes well for oil consumption, although the spread of new Covid-19 variants likely bruised prices somewhat. Crude prices are forecast to retreat from their current levels by year-end, as global production gradually rises. Despite July’s roadblocks, OPEC+ is expected to agree on the easing of output cuts for H2 by the end of the month, which will likely restrain oil prices from climbing further in the remainder of the year. That said, recovering economic activity and the release of pent-up travel demand thanks to widespread vaccination efforts bode well for oil demand in H2, which should keep prices elevated. New Covid-19 strains, volatile output in some countries, a potentially prolonged OPEC+ standoff and geopolitical tensions are all major risks to the baseline scenario. 

Job Openings and Labor Turnover 

The number of job openings reached a series high of 9.3 million on the last business day of April, the  U.S. Bureau of Labor Statistics reported today. Hires were little changed at 6.1 million. Total separations increased to 5.8 million. Within separations, the quits rate reached a series high of 2.7  percent while the layoffs and discharges rate decreased to a series low of 1.0 percent. This release  includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm  sector, by industry, by four geographic regions, and by establishment size class.   

Job Openings 

On the last business day of April, the job openings level and rate increased to series highs of 9.3 million  (+998,000) and 6.0 percent, respectively. The job openings series began in December 2000. Job  openings increased in a number of industries with the largest increases in accommodation and food  services (+349,000), other services (+115,000), and durable goods manufacturing (+78,000). The  number of job openings decreased in educational services (-23,000) and in mining and logging (-8,000).  The number of job openings increased in all four regions. (See table 1.)  Hires  In April, the number of hires changed little at 6.1 million. The hires rate was unchanged at 4.2 percent.  Hires increased in accommodation and food services (+232,000) and in federal government (+10,000).  Hires decreased in construction (-107,000), durable goods manufacturing (-37,000), and educational  services (-32,000). The number of hires was little changed in all four regions. (See table 2.)  Separations  Total separations includes quits, layoffs and discharges, and other separations. Quits are generally  voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of  workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers  to other locations of the same firm.  In April, the number of total separations increased to 5.8 million (+324,000). The total separations rate  was little changed at 4.0 percent. The total separations level increased in retail trade (+116,000) and in  transportation, warehousing, and utilities (+60,000). Total separations increased in the West region. (See  table 3.)  

In April, the quits level and rate increased to series highs of 4.0 million and 2.7 percent, respectively.  Quits increased in a number of industries with the largest increases in retail trade (+106,000),  professional and business services (+94,000), and transportation, warehousing, and utilities (+49,000).  The number of quits increased in the South, Midwest, and West regions. (See table 4.)  In April, the number and rate of layoffs and discharges were little changed at 1.4 million and 1.0  percent, respectively. Both the number and rate reached new series lows. The number of layoffs and  discharges decreased in finance and insurance (-24,000). Layoffs and discharges were little changed in  all four regions. (See table 5.)  The number of other separations was little changed in April at 364,000. Other separations increased in  transportation, warehousing, and utilities (+16,000) and in durable goods manufacturing (+7,000). The  other separations level was little changed in all four regions. 

Review tables and read more at:

BLS APRIL 2021

A new book by Chaganomics founder Chad Hagan on Global Family Office Investing has been published by Palgrave.

Family offices are currently the most attractive group of investors and their structure is more permanent that many of the world’s strongest companies. They are the next hedge funds of the world, if not more. The family office is at the backbone of global commerce, primarily from permanent capital, which results in a different system of management and investing, a hybrid that combines families directly investing in companies to diversify or to build current portfolios with customized returns on investment, vastly different investment goals and investment time frames. 

While “family office” is a new term for many in the industry, the basis and framework behind the family office has existed for more than 500 years. It is wildly important for this system of investing to be understood. In the past decade, billions in profits have been made in technology, let alone other industries, and most of these fortunes will find themselves managed by a family office of sorts. They are also competitors with one another and at times highly influential in the ways of wealth management, wealth creation and associated practices. 

This book offers a global snapshot of family offices, using case studies of family offices like the Rockefeller’s “Room 5600” and covers important direct investment styles of family offices—all supported by hard research and statistics from intelligence partners covering family office investing extensively. It will be of interest to anyone in finance, wealth management, management consulting, market research and investing as a whole. Diving headfirst into the practice of family offices and family office structures, Global Family Office Investing covers the secretive world of family offices around the world, sharing best practices, the culture, history and future of modern global family offices.

Read More At Palgrave