1. The True Size of the Shadow Banking System Revealed (Spoiler: Humongous) →

    The shadow banking system is vastly bigger than regulators had thought, say econophysicists who have developed a powerful new way to measure its hidden impact

  2. Dan Kominsky: I Tried Hacking Bitcoin And I Failed →

    BitCoin is actually an exploit against network complexity.  Not financial networks, or computer networks, or social networks.  Networks themselves.

    To be quite specific:  BitCoin is a rejection of the regulation of monetary flows. 

    The cost of regulating any network actually goes up exponentially with the number of nodes that must be monitored (you need a hierarchy of systems to perform ‘guard labor’ to make sure systems are behaving within declared parameters).  

    But the cost of adding yourself to the BitCoin network is not exponential. 

    - Dan Kominsky for Business Insider

  3. Bloomberg: Bitcoin Really Is an Existential Threat to the Modern Liberal State →

    So far, Bitcoin is not a big deal. Its total value in circulation was $1.4 billion as of this week. That’s equivalent to the currency stock of a small nation — somewhere between Iceland and Uruguay — and just one-thousandth of the total value of U.S. dollars in circulation. The volume of transactions in Bitcoin is growing only slowly, relative to the massive increase in demand for the currency: This discrepancy is strong evidence that Bitcoin’s rise is a speculative bubble.

    Nonetheless, Bitcoin raises some interesting questions. One is whether it might undermine the modern state — which, for many of its libertarian-anarchist advocates, is the whole idea.

    - Evan Soltas for Bloomberg

  4. Reuters: U.S. plans to let spy agencies scour Americans' finances →

    The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters.

  5. Mapping the Alternative Financial SystemNew forms of finance powered by technological changes and higher social and environmental awareness slowly begin to arise and set up the basis of a very different financial system. The map depicts the fundamental reconfiguration of the existing financial system which is moving away from the current model of vertically-­integrated monoliths towards a financial ecosystem of firms that compete along different banking function, recreating a more distributed value chain of the industry.
-from AllSt. (via P2P Foundation)

    Mapping the Alternative Financial System
    New forms of finance powered by technological changes and higher social and environmental awareness slowly begin to arise and set up the basis of a very different financial system. The map depicts the fundamental reconfiguration of the existing financial system which is moving away from the current model of vertically-­integrated monoliths towards a financial ecosystem of firms that compete along different banking function, recreating a more distributed value chain of the industry.

    -from AllSt. (via P2P Foundation)

  6. Disruptor Chris Larsen Returns with a Bitcoin-Like Payment System →

    Chris Larsen, who disrupted consumer finance in the 1990s and 2000s with E-Loan and Prosper, is seeking to shake up the industry again with Ripple, a peer-to-peer payment and lending system.

    Ripple looks to improve on Bitcoin, the decentralized virtual currency and payment system that emerged three years ago and is beginning to gain some respectable traction. He’s teamed up with Jed McCaleb, a serial tech entrepreneur and a major figure in the Bitcoin community.

    - American Banker

  7. International Bank Transfers: Banks’ Ugly Secret and Why Bitcoin Really Matters →

  8. James Bond and the killer bag lady →

    Deak-Perera had been headquartered on the building’s 20th and 21st floors since the late 1960s. Nick Deak, known as “the James Bond of money,” founded the company in 1947 with the financial backing of the CIA. For more than three decades the company had functioned as an unofficial arm of the intelligence agency and was a key asset in the execution of U.S. Cold War foreign policy. From humble beginnings as a spook front and flower import business, the firm grew to become the largest currency and precious metals firm in the Western Hemisphere, if not the world. But on this day in November, the offices were half-empty and employees few. Deak-Perera had been decimated the year before by a federal investigation into its ties to organized crime syndicates from Buenos Aires to Manila. Deak’s former CIA associates did nothing to interfere with the public takedown. Deak-Perera declared bankruptcy in December 1984, setting off panicked and sometimes violent runs on its offices in Latin America and Asia.

  9. German man locked up over HVB bank allegations may have been telling truth →

    Gustl Mollath was put in a psychiatric unit for claiming his wife was involved in money-laundering at the Bavarian bank. But seven years on evidence has emerged that could set him free.

  10. Dollar-Less Iranians Discover Virtual Currency (Bitcoin) →

    Under sanctions imposed by the U.S. and its allies, dollars are hard to come by in Iran. The rial fell from 20,160 against the greenback on the street market in August to 36,500 rials to the dollar in October. It’s settled, for now, around 27,000. The central bank’s fixed official rate is 12,260. Yet there’s one currency in Iran that has kept its value and can be used to purchase goods from abroad: bitcoins, the online-only currency.

    Created in 2009 by a mysterious programmer named Satoshi Nakamoto, bitcoins behave a lot like any currency. Their value is determined by demand, and they can be used to buy stuff. Bitcoin transactions are encrypted and handled by a decentralized global network of tens of thousands of personal computers. Merchants around the world accept the currency, from a bakery in San Francisco to a dentist in Finland. Individuals who own bitcoins and wish to exchange them for physical currencies like euros or dollars can use exchange sites such as localbitcoins.com, a Finland-based site founded by Jeremias Kangas. “I believe that bitcoin is, or will be in the future, a very effective tool for individuals who want to avoid sanctions, currency restrictions, and high inflation in countries such as Iran,” Kangas wrote in an e-mail.

    - Mike Rasin, writing for Bloomberg Businessweek