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Metaverse still not ready for virtual weddings and legal proceedings

Since the legislative framework surrounding the Metaverse is quite gray, experts still don’t see the technology being used to settle legal issues.

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Since the legislative framework surrounding the Metaverse is quite gray, experts still don’t see the technology being used to settle legal issues.

As the global Web3 ecosystem continued to evolve at a staggering pace, so have the various use cases associated with this niche. In a striking new development, a high-ranking Singaporean government minister recently noted that legal marriage proceedings, court case disputes, and government services could one day be conducted using Metaverse platforms.

While delivering a keynote address at Singapore’s TechLaw Fest 2022 late last month, the country’s second minister for law, Edwin Tong, was quoted as saying that he would not be surprised if, in the future, intimate events such as the solemnization of marriages as well as legal disputes “could take place within the Metaverse,” adding:

“It would not be unthinkable that, besides registration of marriages, other government services can soon be accessed online via the Metaverse. There's no reason why the same cannot be done for legal services. The pandemic has already shown us that even dispute resolution — once seen to be a physical, high-touch process [...] can be held online.”

Expounding on his stance, Tong used a hypothetical example of a dispute involving an accident on a construction site, which he believes could be viewed in a 3D environment using augmented reality technology, thus allowing for a better reimagining of the accident. “You can put yourself into the actual tunnel or the oil containment facility to look at the dispute,” he added.

A hybrid outlook such as this, Tong believes, could make the dispute resolution process extremely convenient and efficient for governments across the planet.

Could digital legal proceedings become the norm?

According to Joseph Collement, general counsel for cryptocurrency exchange and wallet developer Bitcoin.com, dematerializing government services that require in-person attendance is the next, most coherent step for nations across the globe, especially as the world shifts from an analogous age to a digital one in this post-covid era. He added:

“Nowadays, approximately one-third of legal agreements worldwide are signed electronically. Therefore, it comes as no surprise to see modern nations such as Singapore adopt all-inclusive technologies like the Metaverse for government services. The same thinking should apply to certain civil court cases, which are still subject to extreme delays due to backlogs. While justice is delayed, the involved parties often have to suffer.”

A similar view is shared by Alexander Firsov, chief Web3.0 officer for Sensorium — an A.I.-driven Metaverse platform. He told Cointelegraph that as a space dedicated to bridging the gap between the real world and digital experiences, it’s only logical that the Metaverse will one day transform into a medium where legal proceedings can take place. 

In his view, by adopting immersive technologies, virtual legal proceedings won’t feel much different from real-life events. In fact, he believes the use of photorealistic avatars can bring a degree of humanization and presence that online meetings fail to meet. Lastly, Firsov noted that justice systems all over the world are notoriously slow, costly and the Metaverse can help address these inefficiencies, adding:

“The Metaverse can have a positive impact when it comes to the work of law enforcement agencies and other legal entities on issues such as cooperation, record keeping, and data transmission, as it holds the ability to improve important processes through the use of emerging technologies such as blockchain.”

Not everyone is sold on the idea

Dimitry Mihaylov, A.I. scientist, UN expert contractor and associate professor at the National University of Singapore, told Cointelegraph that the first problem when talking about digitally facilitated legal proceedings is that of intellectual property (IP) based legislation — since geographical borders do not factor into proceedings taking place in the Metaverse, least as of yet. He explained:

“When you get a patent, it’s valid only within a particular territory. Yet, with the Metaverse, it will be used by people worldwide. People can accidentally violate laws by using a patent in the Metaverse that is outside its area of legalization. Here’s where relevant authorities need to determine who owns the IP and under which court’s jurisdiction it falls.”

The second issue, in his opinion, pertains to data collection and ownership. This is because mainstream tech conglomerates have for the longest time been abusing the data of their clients and, therefore, it will be important that regulations pertaining to the storing and use of legal data on the Metaverse are developed before any court proceedings can take place on it.

Collement believes a physical courtroom presents features that cannot be replicated in the Metaverse. For example, the cross-examination of a witness in front of a jury to attack his credibility is an important strategy in certain cases. Even with advanced video-conferencing, some important cues and details from a witness examination can be missed by the jury. He added:

“It is unclear to me that the Metaverse is ready to host trials. Uncertainty remains as to the enforceability of Metaverse-held judgments in countries that are a member of the Hague Convention but who have not yet issued any guidance or laws in regard to these virtual proceedings.”

Furthermore, Mihaylov noted that the question of copyright is quite pertinent in this regard since it protects digital works across many countries. He explained that nowadays, companies like Google are extremely swift with their copyright actions and block any sites that infringe on their rights. “Copyright covers more than 100 countries, and it's very close to the model that the Metaverse should use. But it has no applications yet, and no such precedents have arisen so far,” he added.

Are the masses willing to accept court proceedings on the Metaverse?

Mattan Erder, associate general counsel for public blockchain infrastructure provider Orbs, told Cointelegraph that as things stand, it is actually a question of whether people are truly willing to believe the outcome of what occurs on the Metaverse as being real, especially from a legal perspective. In his view, most individuals are quite detached from a reality where they can ever see trials deciding the future of an individual, adding:

“I think we have some time before these things become real. However, the more people live their lives in the Metaverse, the closer we will get to a mental shift. There are a variety of elements that need more development before it will be really possible to have these types of core social institutions exist there.”

In Erder’s opinion, the situation being discussed here is one that is usually dealt with by governments almost exclusively. Therefore, it makes sense for the masses not to get ahead of themselves in thinking that any of these changes are going to come in the near term. He believes that legal systems have a clear preference when it comes to wanting the physical presence of all those involved in a trial, adding:

“Most people have the belief that being in the same room with someone, such as a witness, and looking them in the eyes, seeing their mannerisms, etc., is important in evaluating their credibility. Democracies grant defendants the right to directly confront the witnesses and the evidence against them, and litigants have the right to confront each other and the judge/jury.”

Lastly, a key driver when it comes to people and governments getting onboard with Metaverse-based legal proceedings and marriages is their definition of reality. To this point, Erder thinks that as the Metaverse becomes an integral part of people’s lives, the things that happen there will start to matter to people. “The Metaverse will become a microcosm of human society where there will be a natural need for things like dispute resolution,” he concluded.

The future looks “Metaverse ready”

Similarly, quite recently, the South Korean government announced that it had been actively taking steps to bolster its Metaverse ambitions by setting aside $177 million from its coffers. The country is looking to devise a platform for its citizens that grants access to a wide array of government services in a completely digital fashion.

Back in July, Metaverse infrastructure company Condense closed a seed funding round to continue the development of a 3D live streaming technology. The technology underlying the firm’s digital offering utilizes “cutting-edge computer vision, machine learning and proprietary streaming infrastructure to capture and embed a live 3D video (Video 3.0).” In the near term, the firm hopes to stream this unique live video experience into various Metaverse games and mobile applications, as well as other platforms that have been created using Unity or the Unreal Engine.

Earlier this year, Metaverse platform Decentraland laid claim to the distinguished honor of hosting the world’s first wedding on the Metaverse, with the event being attended by a total of over 2,000 guests. The proceedings were administered and solemnized by the law firm Rose Law Group.

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Economics

Roubini: The Stagflationary Debt Crisis Is Here

Roubini: The Stagflationary Debt Crisis Is Here

Authored by Nouriel Roubini via Project Syndicate,

The Great Moderation has given way to…

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Roubini: The Stagflationary Debt Crisis Is Here

Authored by Nouriel Roubini via Project Syndicate,

The Great Moderation has given way to the Great Stagflation, which will be characterized by instability and a confluence of slow-motion negative supply shocks. US and global equities are already back in a bear market, and the scale of the crisis that awaits has not even been fully priced in yet.

For a year now, I have argued that the increase in inflation would be persistent, that its causes include not only bad policies but also negative supply shocks, and that central banks’ attempt to fight it would cause a hard economic landing. When the recession comes, I warned, it will be severe and protracted, with widespread financial distress and debt crises. Notwithstanding their hawkish talk, central bankers, caught in a debt trap, may still wimp out and settle for above-target inflation. Any portfolio of risky equities and less risky fixed-income bonds will lose money on the bonds, owing to higher inflation and inflation expectations.

How do these predictions stack up? First, Team Transitory clearly lost to Team Persistent in the inflation debate. On top of excessively loose monetary, fiscal, and credit policies, negative supply shocks caused price growth to surge. COVID-19 lockdowns led to supply bottlenecks, including for labor. China’s “zero-COVID” policy created even more problems for global supply chains. Russia’s invasion of Ukraine sent shockwaves through energy and other commodity markets. And the broader sanctions regime – not least the weaponization of the US dollar and other currencies – has further balkanized the global economy, with “friend-shoring” and trade and immigration restrictions accelerating the trend toward deglobalization.

Everyone now recognizes that these persistent negative supply shocks have contributed to inflation, and the European Central Bank, the Bank of England, and the US Federal Reserve have begun to acknowledge that a soft landing will be exceedingly difficult to pull off. Fed Chair Jerome Powell now speaks of a “softish landing” with at least “some pain.” Meanwhile, a hard-landing scenario is becoming the consensus among market analysts, economists, and investors.

It is much harder to achieve a soft landing under conditions of stagflationary negative supply shocks than it is when the economy is overheating because of excessive demand. Since World War II, there has never been a case where the Fed achieved a soft landing with inflation above 5% (it is currently above 8%) and unemployment below 5% (it is currently 3.7%). And if a hard landing is the baseline for the United States, it is even more likely in Europe, owing to the Russian energy shock, China’s slowdown, and the ECB falling even further behind the curve relative to the Fed.

Are we already in a recession? Not yet, but the US did report negative growth in the first half of the year, and most forward-looking indicators of economic activity in advanced economies point to a sharp slowdown that will grow even worse with monetary-policy tightening. A hard landing by year’s end should be regarded as the baseline scenario.

While many other analysts now agree, they seem to think that the coming recession will be short and shallow, whereas I have cautioned against such relative optimism, stressing the risk of a severe and protracted stagflationary debt crisis. And now, the latest distress in financial markets – including bond and credit markets – has reinforced my view that central banks’ efforts to bring inflation back down to target will cause both an economic and a financial crash.

I have also long argued that central banks, regardless of their tough talk, will feel immense pressure to reverse their tightening once the scenario of a hard economic landing and a financial crash materializes. Early signs of wimping out are already discernible in the United Kingdom. Faced with the market reaction to the new government’s reckless fiscal stimulus, the BOE has launched an emergency quantitative-easing (QE) program to buy up government bonds (the yields on which have spiked).

Monetary policy is increasingly subject to fiscal capture. Recall that a similar turnaround occurred in the first quarter of 2019, when the Fed stopped its quantitative-tightening (QT) program and started pursuing a mix of backdoor QE and policy-rate cuts – after previously signaling continued rate hikes and QT – at the first sign of mild financial pressures and a growth slowdown. Central banks will talk tough; but there is good reason to doubt their willingness to do “whatever it takes” to return inflation to its target rate in a world of excessive debt with risks of an economic and financial crash.

Moreover, there are early signs that the Great Moderation has given way to the Great Stagflation, which will be characterized by instability and a confluence of slow-motion negative supply shocks. In addition to the disruptions mentioned above, these shocks could include societal aging in many key economies (a problem made worse by immigration restrictions); Sino-American decoupling; a “geopolitical depression” and breakdown of multilateralism; new variants of COVID-19 and new outbreaks, such as monkeypox; the increasingly damaging consequences of climate change; cyberwarfare; and fiscal policies to boost wages and workers’ power.

Where does that leave the traditional 60/40 portfolio? I previously argued that the negative correlation between bond and equity prices would break down as inflation rises, and indeed it has. Between January and June of this year, US (and global) equity indices fell by over 20% while long-term bond yields rose from 1.5% to 3.5%, leading to massive losses on both equities and bonds (positive price correlation).

Moreover, bond yields fell during the market rally between July and mid-August (which I correctly predicted would be a dead-cat bounce), thus maintaining the positive price correlation; and since mid-August, equities have continued their sharp fall while bond yields have gone much higher. As higher inflation has led to tighter monetary policy, a balanced bear market for both equities and bonds has emerged.

But US and global equities have not yet fully priced in even a mild and short hard landing. Equities will fall by about 30% in a mild recession, and by 40% or more in the severe stagflationary debt crisis that I have predicted for the global economy. Signs of strain in debt markets are mounting: sovereign spreads and long-term bond rates are rising, and high-yield spreads are increasing sharply; leveraged-loan and collateralized-loan-obligation markets are shutting down; highly indebted firms, shadow banks, households, governments, and countries are entering debt distress.

The crisis is here.

Tyler Durden Tue, 10/04/2022 - 17:25

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Economics

Oil Spikes After OPEC+ Hints At 2 Million B/D Production Cut

Oil Spikes After OPEC+ Hints At 2 Million B/D Production Cut

Oil prices are extending their recent gains following headlines from Vienna that…

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Oil Spikes After OPEC+ Hints At 2 Million B/D Production Cut

Oil prices are extending their recent gains following headlines from Vienna that OPEC+ is considering a reduction in its production limit of as much as 2 million barrels a day.

However, the impact on actual production could be smaller since several members are already pumping far below their officials quotas, meaning they could automatically be in compliance with their new limit without having to curb production.

Nevertheless, it could still result in the cartel's largest reduction since the deep cuts agreed at the outset of the Covid-19 pandemic in 2020 and WTI surged up to $87 on the news...

Notably, Saudi Aramco CEO Amin Nasser told the Energy Intelligence Forum in London this morning that the world is misinterpreting the oil market by worrying too much about a potential recession in the near future.

Current oil prices indicate a focus on "short-term economics rather than supply fundamentals."

"If China opens up, [the] economy starts improving or the aviation industry starts asking for more jet fuel, you will erode this spare capacity," he said.

"And when you erode that spare capacity the world should be worried. There will be no space for any hiccup — any interruption, any unforeseen events anywhere around the world."

The timing could not be more interesting as it comes just weeks after Biden begged the Saudis to hike production and just weeks before the Midterms... with gas prices at the pump beginning to rise again (to record highs in California)...

Finally, Biden's political emptying of the SPR has left it with a record low of just 22 days supply...

Source: Bloomberg

Let's hope we don't have a real emergency - other than collapsing poll numbers we mean of course...

And given the resurgence in crude and wholesale gasoline prices, regular pump prices are set to soar again...

By the way, whatever happened to that Ridiculous Buyers' Cartel idea? 

Tyler Durden Tue, 10/04/2022 - 11:00

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Economics

Consumer Savings Shrink to 2008 Lows

Americans are saving less money than ever as inflation and higher interest rates have impacted their budgets.

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Americans are saving less money than ever as inflation and higher interest rates have impacted their budgets.

The American consumer is accumulating less money each month and tapping into their savings to pay for basic necessities and bills such as utilties, adding to fears of a recession

The personal savings rate in the U.S. for August was down to 3.5%, which is flat compared to July's rate, according to the Bureau of Economic Analysis that was released on Sept. 30. 

"It’s a natural consequence of high inflation that has been forcing individuals and households to raid their own savings accounts where they have them," Mark Hamrick, Bankrate’s senior economic analyst, told TheStreet. "Not everyone has been so fortunate. Others have had to cut back severely or rely more on credit."

Wage growth in many industries has fallen short as inflation has risen exponentially this year.

"The fact is that wage growth has not been keeping pace with inflation and has had a negative impact on savings," he said.

The savings rate is calculated by the income that is remaining aftter consumers pay for food, rent and energy as well as taxes.

The decline in the savings rate matches the low rate in August 2008. 

"As the economy reopened, consumers rushed to spend more of their past savings and current income," Anthony Chan, former chief economist for JPMorgan Chase, told TheStreet. "The yearly rise in the CPI has been outpacing the growth in average hourly earnings for all workers since April 2021. That has created another incentive for consumers to lower their savings rate to maintain their standard of living as inflation continues to outpace the growth in wages for all workers."

The percentage of disposable personal income was 3.6% in May, but fell to 3% in June as many Americans went on summer vacations. 

Inflation has eroded the amount of income workers have as the core personal consumption expenditures (PCE) Price Index increased by 4.9% in August from last year and by 0.6% on the month, the Bureau of Economic Analysis reported.

This reduced hopes that the Federal Reserve would halt its plans for at least another rate hike since the PCE is the Federal Reserve's preferred measure of inflation.

The headline PCE index rose 0.3% on the month, but fell to 6.3% on the year following the first month-on-month decline which was recorded last month -- since April 2020.

Personal income rose by 0.3%, while personal spending rose by 0.4%, the BEA noted.

Consumers received a slight reprieve when gasoline prices fell for 14 consecutive weeks.

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Gasoline Prices Rising Again

The streak of cheaper gasoline prices ended last week as a string of refinery issues pushed prices up higher slightly

For the second straight week, gas prices moved higher with the average gas price posting a rise of 11 cents from a week ago to $3.78 per gallon today, according to GasBuddy data compiled from over 150,000 stations nationwide. 

The national average is up 4 cents from a month ago and 59 cents higher than a year ago. The national average price of diesel has declined by 29 cents in the last week and stands at $4.86 per gallon.

“With gas prices continuing to surge on the West Coast and Great Lakes, the national average saw its second straight weekly rise," said Patrick De Haan, head of petroleum analysis, GasBuddy, a Boston-based provider of retail fuel pricing information and data. "But at the same time, areas of the Northeast and Gulf Coast have continued to see declines as the nation experiences sharp differences in trends between regions.

Along the West Coast, some states reported prices rose 35 cents to 55 cents a gallon as gasoline supply declined to its lowest level in a decade in the region, resulting in skyrocketing prices. 

Another price spike is possible, he said.

"While I’m hopeful there will eventually be relief, prices could go a bit higher before cooling off," De Haan said. "In addition, OPEC could decide to cut oil production by a million barrels as the global economy slows down, potentially creating a catalyst that could push gas prices up further.”

Consumer Confidence Increases 

The Consumer Confidence Index rebounded and rose to its highest level since April - it has increased by 12 points compared to just two months ago. 

"Falling gasoline prices and a still-tight labor market are the main reasons we have seen a recent rebound in confidence," wrote Tim Quinlan, senior economist at Wells Fargo Securities, and Shannon Seery, an economist at Wells Fargo Securities. "But as inflation persists and the Fed lifts rates to combat it, we are unlikely to see confidence approach pre-pandemic levels."

Optimism from consumers rose with both the Conference Boards Consumer Confidence Index or Consumer Sentiment from the University of Michigan despite higher inflation rates and uncertainty about the outlook on the economy.  

Consumers started cutting back on spending on both discretionary items and and staples earlier this year as retailers have reported a lower demand.

Target  (TGT) - Get Target Corporation Report and Walmart  (WMT) - Get Walmart Inc. Report were among retailers that reported weaker profits while the travel and leisure industries benefitted from pent up demand.

The Fed has raised rates five times this year, starting with a 0.25% hike in March. Its most recent hike was the third consecutive 0.75%.

Consumer confidence levels are not likely to remain at these levels, Quinlan and Seery wrote.

"Still-elevated inflation and the aggressive tightening path from the Federal Reserve to combat it will likely weigh on consumers financial prospects," he said. "The recent gain in confidence may be supportive of spending in the near-term, but as long as inflation persists and risks of recession remain confidence is unlikely to return to pre-pandemic levels."

A United Nations agency is now asking for central banks such as the Federal Reserve to stop its interest rate increases.

Additional tightening would only increase the odds of a global recession, the United Nations Conference on Trade and Development said in its annual report on the global economy. 

The agency estimates that a percentage point increase in the Fed’s key interest rate will decrease the amount of economic output by 0.5% in richer countries while the impact is greater in poor countries by a decline of 0.8% over the next three years.

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