Full Tilt Poker executives should have opened a bank

Business, Finance, Statism
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Federal prosecutors have alleged in their amended complaint against Full Tilt Poker that the gambling interest was a “Ponzi scheme,” apparently in part because of the company’s level of cash reserves.

FTP owed approximately $390 million to players around the world, with $150 million owed to U.S. players. FTP only had $60 million on deposit in its bank accounts, however, meaning over $300 million is owed to players worldwide.

This was the result of FTP’s payment processing channels becoming so disrupted that “the company faced increasing difficulty attempting to collect funds from players in the United States. Rather than disclose this fact, Full Tilt Poker simply credited players’ online gambling accounts with money that had never actually been collected from the players’ bank accounts. Full Tilt Poker allowed players to gamble with — and lose to other players — this phantom money that Full Tilt Poker never actually collected or possessed.”

$390 million in liabilities and only $60 million in the bank? That means that FTP had a little more than 15% in cash reserves. According to Wikipedia,

A depository institution’s reserve requirements vary by the dollar amount of net transaction accounts held at that institution. Effective December 30, 2010, institutions with net transactions accounts:

  • Of less than $10.7 million have no minimum reserve requirement;
  • Between $10.7 million and $58.8 million must have a liquidity ratio of 3%;
  • Exceeding $58.8 million must have a liquidity ratio of 10%

So because FTP had 15% in cash reserves, the whole operation is a Ponzi scheme. If only the proprietors had started a bank of the same size, they would have only needed 10% reserves!

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Keynesian Economic Policy Is a Negative-Sum Game

Humor, Nanny Statism, Taxation
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Keynesian economic policy is a negative-sum game: They essentially believe that you can take water from the deep end of the swimming pool with a bucket, carry it to the shallow end while sloshing water out onto the deck along the way, dump it back in, and somehow the water level of the swimming pool will rise.

(HT Robert Higgs, +Steve Ciciotti, and +Manuel Lora. I “stole” your ideas and remixed them.)

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Super-statists Love The Super State

Anti-Statism, Firearms, Political Correctness, Racism, Totalitarianism
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After a horrific and murderous weekend in NYC, Mayor Bloomberg, frustrated that folks determined on committing crimes are ignoring those magical incantations and spells enacted by local legislators, does what must necessarily follow in the mind of the statist: call the feds.

“We cannot tolerate it,” Bloomberg said while speaking at the Christian Cultural Center in Brooklyn. “There are just too many guns on the streets and we have to do something about it.”

New York has the toughest gun laws in the country, but Bloomberg said the city alone cannot stop the onslaught of shootings. “We need the federal government to step up,” he said.

The problem of crime is that it finds a way. And prohibitions are, at best, marginal; but they are totalitarian nonetheless and have no place in a free society. To try to control the means of the few by subjecting the entirety of society to the dictate of a despot is a symptom of desperation. After all, not every place experiences the same level of overall crime or the same numbers of crimes committed by firearms.

And then there is the elephant in the room. As Robert Wicks points out, “‘getting guns off the streets’ is just code for ‘getting poor urban minorities to disarm themselves.'” Indeed, NYC’s own government report on crime shows that minorities both commit and experience a higher percentage of crimes. Yet because most minorities are not criminals but potential victims, gun disarmament leaves minorities in a greater situation of peril. Of course, politicians do not understand economics or how incentives work so they would never think that ending drug (and gun) prohibition, welfare, taxes, zoning and licenses, rent control and compulsory education would radically lower crime across the board.

As for Bloomberg, his policies, and the policies of Albany, are–let’s face it–pretty much an epic fail. The last thing anyone needs is the federal government coming in to “fix” things.

 

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On the crime of being an anarchist

Anti-Statism, Police Statism, Totalitarianism
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It’s become rather clichéd to invoke the nightmarish police state envisioned by George Orwell in 1984, but damned if the old boy isn’t vindicated on an almost daily basis.  The most recent move to making thoughtcrime a reality comes, unsurprisingly, from the UK:

…next to an image of the anarchist emblem, the City of Westminster police’s “counter terrorist focus desk” called for anti-anarchist whistleblowers stating: “Anarchism is a political philosophy which considers the state undesirable, unnecessary, and harmful, and instead promotes a stateless society, or anarchy. Any information relating to anarchists should be reported to your local police.”

The move angered some anarchists who complained that being an anarchist should not imply criminal behaviour. They said they feel unfairly criminalised for holding a set of political beliefs.

This wouldn’t be so worrisome, had the police characterized anarchism in the uninformed and sensationalist fashion still common in mainstream media: that of radically leftist vandals intent on dismantling not just the state but the capitalist infrastructure that in their view props it up.  Violent thugs, in other words; the kind who show up at G-20 summits to smash windows and set fires.  Yet these people make up a minuscule fraction of anarchists, despite the disproportionate amount of TV time they receive.

Now, however, the police are prepared to view anyone who promotes a stateless society — from old hippies to free-market Rothbardians — as potential criminals, regardless of which values they promote, and what crimes they’ve actually committed.  Which, for the vast majority of anarchists, is none at all.

Given their Stasi-like call on citizens to serve as snitches (at least it’s still voluntary…for now), it makes one wonder what the police are truly afraid of: the infrequent real crimes of self-styled “anarchists”; or the growing popularity of the ideas advanced by peaceful radicals — property, prosperity, and the end of the criminal, Leviathan state.

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Keeping Rights on Paper, Losing Them on the Streets

Firearms, Legal System, Police Statism, Private Crime, Victimless Crimes
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While many people love to promote the various rights guaranteed by the Constitution, it is interesting to see how rights are restricted not through legislation or even an active judiciary, but simply by law enforcement not respecting them. Consider the right to keep and bear arms and this officer’s reaction to a man exercising his right. The Second Amendment has been upheld by the courts, and there have been recent landmark cases restoring that right to people unfortunate enough to live in places like Washington, D.C. Legal victories such at that have little effect on those supposedly hired to defend person and property, however:

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