Most Recent Posts

The chairman of the Bank of Cyprus abruptly stepped down after a special administrator was appointed to oversee its restructuring in the wake of a painful bailout of the island nation by international lenders.

Andreas Artemis' resignation, The New York Times reports, was "not wholly unexpected," but "still caught the market by surprise and was a further reminder of how volatile and uncertain Cyprus' financial system has become in recent days."

John Psaropoulos, reporting for NPR from the capital, Nicosia, says Artemis' resignation comes as the Bank of Cyprus prepares to absorb the country's second-biggest lender, Laiki Bank. In the process, depositors with more than $130,000 in their accounts will be levied a one-time charge of as much as 40 percent of their savings.

"But while both banks are crunching the numbers, nobody knows what their assets will be at the end of the day," Psaropoulos says. "Today's resignation [of Artemis] could throw a wrench in the entire process."

He says employees, unsure about their jobs, protested outside the Bank of Cyprus headquarters in Nicosia.

On Monday night, Cyrpus' central bank appointed Dinos Christofides to act as a special administrator for the Bank of Cyprus. He tells Reuters he will oversee "the restructuring of the bank and the absorption of part of Cyprus Popular Bank," known as Laiki Bank.

"It means that from now until further notice I will be running the bank," he said. "It could be short term ... or it could be longer."

Meanwhile, Greece's Piraeus Bank agreed Tuesday to buy the Greek operations of three Cypriot banks for $678 million, according to The Associated Press:

"Piraeus, which was selected last Friday to take over the Greek units of the Bank of Cyprus, Laiki and Hellenic ... says the Cypriot bank branches in Greece would reopen Wednesday, a day earlier than in Cyprus."

On Wednesday, the U.S. Supreme Court will hear a challenge to the Defense of Marriage Act — the federal law that defines marriage as between a man and a woman. And among those asking the justices to strike it down is a broad cross section of corporate America.

Nearly 300 companies have filed a brief arguing that the law — called DOMA for short — hits them where it counts: their bottom lines.

Boston lawyer Sabin Willett smiles, remembering when he sent the brief to be printed at a shop in New York.

"The printer, he said: 'All these pages and pages of corporations,' he says, 'you know what that's going to cost? My God,' he says, 'You have to list them all?!' I said, 'That's the whole point!' " Willet recalls.

On the list are Johnson & Johnson, Starbucks and Citigroup. There's Apple, Nike and Morgan Stanley, too. And it even includes municipal employers — Boston, Seattle and Los Angeles, and some counties and chambers of commerce. So many signed up — 278 in all — that the appendix listing them is longer than the written argument itself.

Jack Christin, associate general attorney at eBay, says the case against DOMA is pretty simple. "It's bad for business," he says. "It's bad for our company and our employees. And it simply needs to go."

The Defense of Marriage Act prevents same-sex couples from getting medical coverage and other tax and retirement benefits that other employees receive for their spouses. And that complicates things for any business that employs people in any of the nine states and Washington, D.C., where same-sex couples are lawfully married.

"We're basically treating people differently," says Mark Roellig, general counsel at MassMutual Financial. He says DOMA forces his company to keep track of a dual system, and that costs time and money.

"You have to keep separate sets of books. You've got to continually be adjusting. And then also picking up the potential legal risk if you make a mistake," he says. "So it's ongoing administrative costs that are pretty significant."

His company does not want to discriminate, Roelling says. So MassMutual uses a workaround to give employees benefits for their same-sex spouses. But then DOMA forces those employees to pay more in taxes and MassMutual pays more, too.

Profit cuts are not the only reason businesses are complaining about the law — it's also about the work environment. Hannah Grove, executive vice president at State Street, a financial firm, says DOMA is hurting company's ability to create an inclusive atmosphere.

"In order to compete in today's global competitive environment, our employees are one of our greatest assets," Grove says.

“ Cultural change takes time, and I think this is the time."

The news of Yahoo's purchase of Summly, the news-summarizing app created by 17-year-old British wunderkind Nick D'Aloisio, rippled through the news world on Tuesday.

The acquisition, while notable for going to an entrepreneur so young, is hardly the largest or most surprising. The app had millions of downloads after its November release, but it had no real monetization strategy. And unlike, say, Facebook buying Instagram and leaving it intact, Yahoo said it is killing the app (in fact it is already gone from the iOS App Store); so Yahoo isn't buying an audience or a user base, either.

What the Internet company appears to be taking a big gamble on is a good story, some young talent and an algorithm. It bought math.

While Yahoo did not disclose the amount of the deal, Kara Swisher of All Things D told NPR's Jeff Brady that it was "about $30 million ... 90 percent in cash and 10 percent in stock." She says the purchase is part of the restructuring under new CEO Marissa Mayer and her plan to bolster Yahoo's mobile efforts.

Increasingly, technologies, like finance, and, in Summly's case, news aggregation, are becoming algorithm based; an algorithm simply being a set of step-by-step instructions to produce an output. So could these algorithms, math essentially, be the next tech bubble?

In his TEDx talk, Christopher Steiner, author of Automate This: How Algorithms Came to Rule Our World, said, "The story of the next 20 years is the story of big data and algorithms."

Including finance and the tech world, algorithms and algorithmic science is already finding heavy use in medicine, sports and the music industry, Steiner says, and that is only going to increase.

"Just how much will we allow algorithms to take over?" Steiner wonders.

Part of that might depend on whether other companies follow Yahoo's lead and begin doling out large payouts for algorithms that solve their problems. One can posit a future in which computer science and math students simply create and sell algorithms, and not products, to the highest bidder. Why go through the trouble of bringing an app to market when you can just sell the science?

During the dot-com bubble, you saw companies pouring huge amounts of money into unproven websites of all stripes, based on the hype of the Internet boom. Many of those sites failed, and companies lost billions.

As we saw in the "Flash Crash" of 2010, algorithms can also fail to huge consequences. As we increasingly integrate these algorithms into things that drive our daily lives, failures are inevitable.

Writing on Slashdot, however, Nick Kolakowski isn't sure we're quite headed for a new bubble quite yet:

"It's tempting to view all that acquisition and IPO activity and think, 'bubble.' But a true tech bubble occurs only when irrationality takes over, and otherwise-sane investors start pouring fortunes into, say, Websites that specialize in pet accessories. While much of the current activity appears bubbly, many of the companies shelling out the billions also boast solid fundamentals: nobody is going to confuse Google, Apple, or Amazon with Pets.com. Even Facebook, which saw its stock price tumble from its IPO heights, still makes money thanks to a viable corporate strategy."

Outside the Supreme Court, lines began forming nearly a week ago. By Monday, the line had snaked down the court steps and to the corner, with people braving freezing temperatures and snow in anticipation of the historic arguments on same-sex marriage on Tuesday and Wednesday.

The justices are first hearing a constitutional challenge to California's ban on same-sex marriage. A second day is devoted to the federal Defense of Marriage Act, which denies federal benefits to same-sex couples married in the nine states where such unions are legal.

The two cases fall into the category of the truly momentous. So much so that Supreme Court advocate Tom Goldstein literally pounded the table when speaking to law students last month. "This is special," he declared, observing that there were no cases like it when he was in law school." This will be a "foundational decision" that "is going to be decided for centuries."

On one side of the argument in these cases is the idea of equality. On the other, traditional notions of how society has ordered itself.

The same-sex-marriage cases come in the face of a shift in public opinion that even opponents of same-sex marriage admit is unprecedented. Polls show that support for gay marriage has jumped from percentages in the low 40s just four years ago to majorities now as high as 58 percent. And 13 other countries, from Canada to Argentina, have legalized same-sex marriage.

The Voter Initiative

California's Proposition 8, known simply as Prop 8, was enacted by voter initiative in 2008 to ban same-sex marriage. Challenging the constitutionality of the ban are Kristin Perry and Sandy Stier. They have been together 13 years and raised four boys — Perry's twins, and Stier's two sons from a heterosexual marriage many years ago.

Perry, a children's advocate, and Stier, a technical systems expert, got married in 2004, when same-sex marriage was briefly legalized in San Francisco, but the marriage was later voided by the state courts.

They contend that California's ban on same-sex marriage amounts to a badge of inferiority, a stigmatizing mark on all gay couples. "There is no more important decision as an adult than who you choose to love and build a family with," Perry says. "And I'm not allowed to enter into that institution simply because of the gender of who I love — not because I've done anything illegal, not because I'm not contributing, not because I've done anything other than end up this way."

Perry says that Proposition 8 not only hurts her; it hurts her parents, her kids and her community.

The sponsors of the proposition declined to be interviewed for this piece, as did their lead lawyer, Charles Cooper. But in briefs filed in the case, Cooper defends the constitutionality of Proposition 8 this way: "Marriage owes its existence to the undeniable biological reality that opposite-sex unions — and only such unions — can produce children."

Society, he says, has no interest in regulating other relationships, no matter how close. Cooper told a federal appeals court during oral arguments that "the name of marriage is effectively the institution, and the issue here is whether it will be redefined, essentially to be genderless in that it bears little or no ... relationship to the traditional historic purpose of marriage."

Rebutting that argument in the Supreme Court Tuesday, lawyer Ted Olson will tell the justices that "the ability or willingness to procreate or the interest in having children sexually has never, ever been a condition for entry into marriage anywhere in this country."

Olson, who represents Perry and the other challengers to Proposition 8, notes that people too old to have children, or who don't want to have children, have a constitutional right to marry. Even people in prison have a right to marry. And yet, as he puts it, "The state of California is saying you can marry whoever you want, provided it must be a person of the opposite sex."

He argues that just as the U.S. Supreme Court struck down state laws banning marriage between people of different races, it should strike down laws banning marriage between people of the same gender.

State Power And Equal Protection

Those defending Proposition 8 point out that the citizens of California have twice, since 2000, voted to ban same-sex marriage. "We are claiming that the Supreme Court should not try to remove the decision on the future of marriage from the hands of the people, that the people are sovereign, that they do have a right to maintain marriage as one man and one woman," says Austin Nimocks, counsel for the Alliance Defending Freedom, one of the groups involved in defending Proposition 8.

Olson replies that the 14th Amendment of the Constitution stands in the way of that argument because it guarantees all citizens equal protection of the law. It was "specifically enacted as a check on the power of the states," Olson observes, "whether exercised by the people directly, as in Proposition 8, or by a state legislature."

Same-Sex Marriage And The Supreme Court

The Same-Sex Marriage Cases: A Primer