Dorion Mode

November 14, 2019

Life on the Isthmus, 83 months in.

Filed under: Uncategorized — Robinson Dorion @ 09:22

November 2019 marks my 83rd month living in Panama City of the isthmian Republic of Panama. I arrived a month prior to my 23rd birthday which means I'm about 100 days away from turning 30. As such, the majority of my adult life and over 20% of my life in total has been spent here, unavoidably making a marked impact on who I am 1. Why I immigrated here and why I intend to stay for the foreseeable future will be covered in this article. This isn't about why you should come or stay away -- it's an overview of my subjective experience -- judge for yourself and drop me a comment if there's anything you'd like clarified or an important aspect you reckon I've overlooked.

First the context for why I chose Panama in the first place.

When I arrived in January 2013 I was on a mission working the best opportunity I was aware of. Where I was living was only important in the scope of how it would help support the prosecution of that mission. Worn out by the island nonsense, Panama's prospects were relatively bright: a competitive offshore banking industry, six month tourist visa for gringos, and centrally located in the geography of the western hemisphere.

My colleague Ashe and I took a six month lease on the first apartment we looked at and set up shop. We continued our hunker of grinding on our work and didn't get out much the first six months. The bank prevented us from dealing directly with clients in our country of residence 2 as the brokers were never required to obtain any sort of securities license.

After another year working the bank, I upgraded my mission upon correcting my evaluation to recognize the centralized nature of so-called offshore banking and learning enough about Bitcoin and Coinapult to take a job with the later in February 2014. Coinapult's office was across town, which caused me to hire a driver who picked me up everyday at 5am so I could avoid the traffic 3. After 8 months of that commute, I moved within walking distance. By March 2015, Coinapult folded, but unlike all the other gringos who worked the company, I stayed. So, why ?

While, Panama has made others of note and assuredly more refined tastes than your author ill, I've learned to like it.

Tú sabes, Panamá: corvina, patacones, ron Abuelo con agua de pipa, comida mala, tiempo peor, La India jodiendo Dormida, Panamá 4.

The first difficulty that'll hit you when you step from plane to jetway will be a wall of humidity. Panama City has two season: less sunny and more humid 5 and more sunny and slightly less humid 6. The temperature stays between ~23-33 degrees C and humidity between 80 and 90%. During rainy season mornings are typically bright, cool and pleasant, evenings clear with an afternoon storm ~5 days a week. The thunder and lightning can be quite impressive, with thunder seemingly setting off car alarms and chains of lightning that span the sky. Summer can pass months without rain 7 and the high skies bring more breeze to provide relief. While visitors are prone to shock from the heat and humidity, I've acclimated to not pay it much mind 8. So you bring an umbrella when you hit the street May-November, deal with breaking a light sweat when you walk across town midday 9 by throwing your suit coat over your shoulder 10 and hit the A/C to knock out the humidity a few times a day 11. While the city is hot and humid enough the cooler mountainous areas like El Valle de Anton 12 and Cerro Azul 13 are accessible enough 14.

The local food culture is quite rudimentary and so-called restaurants tend to pay waiters as opposed to servers 15. The relatively strong dollar against other fiats makes Panama relatively expensive in the region with restaurant prices comparable or more expensive to North American and Europe. The relatively weak dollar in dollar terms 16 combined with Panama's cooling economy generally means the streets are much quieter and restaurants much emptier 17 than they were a decade or two back -- so I'm told.

Why is the economy continuing to cool you ask ? Like most things, it's multi-faceted. The high-level summary of my understanding is gaining control of the canal combined with Greenspan/Bernanke/Yellen artificially low interest rates fueled a ~2 decade real estate boom that's run out of legs. Meanwhile, the competitive advantage Panama earned from a well advised legal asset protection regime has been eviscerated by outside pressure from the virtual fiat banking system. Trade volume in the Colon Free Trade Zone trade has fallen by 1/3 measured in nominal dollars since 2012. These cooling pressures have been offset somewhat by the canal expansion project, incentives for multinational corporations to headquarter here and relatively friendly immigration laws.

The Panama Canal Authority gained full control of that 7th wonder of the world after USG control phased out from 1977-1999 and much of the Canal Zone has become privatized 18. The 10 year expansion project 19 was finished in 2016. While in 2018, the canal transits were down 20 ~3.5% from 2010 21, cargo tonnage was up 24.5% 22 and tolls were up nominally 74% 23 It doesn't go without saying that virtual measuring stick misnamed dollars had its M1 diluted from ~$1.6T to ~$3.6T (125% (!!!)) over the same period because those counting at home already knew that. I dare you to price those revenues in the numeraire you ought to be using, the BTC, which experienced even greater inflation that the fed's thingamajig. The bottom line is, over the past decade they've moved more tonnage for less purchasing power.

For another data point on the logistics side, the Colon Free Trade Zone at the Caribbean entrance of the Canal has seen trade volume drop from $30B in 2012 - $19B by 2016 24 and was $20.5B in 2018 25. I'm embarrassingly not intimate with the causes here, but word on the street is trade has fallen off as the Venezuelan socialist shitfest continues to deteriorate combined with the Chinese and US establishing more direct trade routes with Colombia 26.

To paint a picture of the real estate bubble, up until 1996, there were 2 buildings taller than 30 stories 27. Today, there are 38 taller than 40 stories, 13 of which are greater than 60 stories. This looks cool in pictures, but the facts on the ground are the skyline frames a mostly hollow interior. I didn't find vacancy statistics published, but it's not unheard of for office and apartment buildings to remain 50% unoccupied and hotels are fortunate to have 30% occupancy 28. From my perch, this bubble has been fueled by the primary cause of all bubbles: artificially low interest rates 29, and is primarily being popped because former influxes of foreign capital that were attracted by Panama's formerly competitive legal self-defense mechanisms have since peaced out with those mechanism being eviscerated and secondarily because they've already overbuilt.

Before we get into the opportunities this may present, let's explore the problem further. In terms of the capital flight, back before Bitcoin started eating the world 30, tax neutral banking was a thing and Panama had a multifaceted legal framework that proved to be competitive for those who execute plans for self-defense. Sociedad Anonimas with Bearer Shares, the Panamanian Private Interest Foundation, zero capital gains tax, territorial taxation, no central bank or legal tender laws attracted substantial foreign capital for a country with a population of 3 million. The 2008 bubble that had to burst was a crisis not wasted by Hussein Bahamas and fellow bureaucrats of western demonocracies. Sure, it wasn't the first bankruptcy they've declared and won't be the last and like the others, they attacked individual privacy and continued to pressure the financial institutions they license to divulge more information. FATCA was passed by the failed European colonies in 2010 and yurop followed through with CRS 31 in 2014 ; with access to the virtual corresponding banks who remit the monopolized virtual fiats 32 as the sword of Damocles held to the neck of the smaller virtual banks in the smaller fiat jurisdictions. Despite reluctantly falling in line as the socialist continued their invasion 33, the Isthmian Republic continues to have an on-again off-again relationship with various gray and black lists. The tradition seemingly to be on-again as an inauguration gift to each incoming administration, with 2019 34 being no different. As everyone expected, substantial has capital walked away to take better deals and 'all of a sudden' more lawyers were seeing less fees for corporations and foundations and introductions to banks for new accounts.

So what does a bursting bubble look like ? Deals can be found today, though you've got to hunt for them. In my experience, for whatever reason, many owner's would rather leave a rental vacant for months, sometimes years, at a price that may have been filled in the market 3 years ago but is quite a ways away from today's market reality than have the apartment filled and cash flowing. Older buildings tend to have higher quality construction than the boom time shiny (!) high rises. Also, you're more likely to find a longer term owner who owns it outright rather than has it mortgaged. $4-6/square meter monthly payment deals 35 are available at present on the rental market 36. I've lived near the city center my entire time, namely in El Cangrejo 37, Punta Pacifica 38, Paitilla 39, San Francisco 40, Coco del Mar 41 and Obarrio 42. In my scale of values, Marbella is the other neighborhood I'd consider living. It's west of Obarrio and spans from Calle 50 to Avenida Balboa on the water. Other neighborhoods I'll note here that are rather towns on their own are Costa del Este 43, Casco Viejo 44 and El Dorado 45.

On the brighter side, Panama has maintained a more competitive stance attracting immigration of companies and people who run those companies or otherwise. A wise decision that's mitigated the logistics, real estate and financial contractions has been the Multinational Headquarter law first implemented in 2007, which provides substantial tax 46 and labor 47 law incentives to qualifying companies. Over 150 such companies 48 have obtained the license and many of which operate their Latin American headquarters under it. In a country with ~3 million and a city with ~1.5 million, ~12k residency visas for employees of multinationals and ~21k friendly nations visas 49 have been issued since 2012.

Since finding Bitcoin, I've not looked hard for employment with more traditional companies. On the one hand, there are less opportunities in the market, but on the other hand quality skill and work ethic do tend to be scarce. The future will tell how good of a decision that has been, but for better and worse that's my advantage/problem. What I can tell you is once you have a residency, work permits or operations license for your corporation are a few hundred bucks and some forms.

In terms of the general picture here moving forward, the Torrijos 50 political line was re-elected in this year with Laurentino Cortizo becoming the newest president. They were last in power 2004-2009 and there are high hopes of a turn around and return of the boom in the streets. As I understand, their agenda priorities include bringing transparency to the spending of the public purse 51, making labor laws more agreeable to management, and emphasizing tourism 52 and technology as emerging economic drivers to fill the hole in the chest of the golden goose the socialists' attack on licensed capital has made.

What they mean by technology isn't exactly clear to me. As far as I've seen, they're complete infected by the cultural cancer of tvphones. Cuckerburg and Bahamas were down here in 2015 shortly after Facegram acquired Whatbook for $20B or whatever it was. As far as I understand, since then, all the data used by usg.fb apps and twatter are 'phree' to the end luser, which has made whatsapps' use in particular ubiquitous 53, primarily as an asynchronous walkie talkie 54. I tend to think they mean fast food technology. While I've received numerous complements when I flash my Nokia feature phone 55 I can tell by looking at their faces that to not have whatsapp would be like shooting their family, friends and dog. On the other hand, ~no one has known the meaning of my GPG fingerprint on my business card. There are even several OTC brokers 56 here that trade several BTC at a time over whatsapp.

I'm currently of the position that sane computing is desirable politically, but to date, those with a chance to matter have allowed themselves to be DDOSed from learning what sane technology is. To a degree, this is understandable. The good 'ol days of competing globally on the strong privacy and asset protection front are sorely missed 57 ; the back office management of the information was largely paper based while the front office was largely face to face 58. My understanding is computers weren't necessarily central to the business. What is keeping me here on this isthmus is the opportunity I see to be useful in working with select individuals to better understand their computing environment to help them bridge the gap from the current socialism to sound money, sane computing and personal sovereignty through digital security.

  1. While I've spent more time in my childhood environment of Vermont's green mountains, I didn't choose to be born there. I've chosen to live here. You see the difference ? []
  2. Commission splitting agreements weren't prohibited, but also weren't encouraged. I believe I had some, but it never made up any substantial part of my book. Looking back, capitalizing on this to a greater extent would've been smart, but what can you do except learn ? []
  3. 'El tranque' in local parlance. On the one hand, it's a big fat tragedy of the commons problem with too many free roads and cheap financing for vehicles. On the other hand, observing the traffic tells you a lot about Panama itself. Traffic laws aren't strictly enforced and open space is filled to keep it fuckin' moving. Ever had a taxi drive 300 meters on the wrong side of a side street to bypass a 100 car line up ? Yeah, he'll pull over onto the sidewalk should oncoming traffic pressure him to, only to continue when it has passed. How many minutes did he save you ? He'll be more than pleased with a $1 tip on the standard $2 fare (never metered), believe me. []
  4. You've seen Snatch, yes ? []
  5. From May-November with October bringing the most rain. []
  6. From December-April []
  7. Can be a problem towards the end of summer if the hydro power reservoirs are low. []
  8. Perhaps this is an effect of growing up in America's northeast as an athlete where I'd shovel the driveway and shoot hoops past my hands being numb (makes it easier when you're in the gym), where baseball games could be snowed out midseason (or played through a light snow shower) and you're excited to buckle on the your chinstrap and shoulder pads during football's double sessions in the middle of August's hot, humid 15 hour days. That is, what you're doing is more important than what the weather is and if it sucks -- embrace the suck, winning will be that much better. []
  9. Walking mornings and evenings doesn't cause my skin to leak and I walk pretty much daily. For sure it's more of a driving than walking culture, but ~everyone apart from gringo tourists wears pants (and usually sleeves too) year round whether they're walking or not. []
  10. Wherever your destination is will likely be cold with locals pumping A/C like it's their job, so do guard against being cold inside. []
  11. I sleep fine with a ceiling fan and only occasionally run the A/C at night. []
  12. ~140 km drive from the city to the west. []
  13. ~41km drive to the east. []
  14. For that matter, San José, Medellín, Bógota and David in Panama's westernmost province of Chiriquí are all 1-2 hr flights away. []
  15. Cause they wait more so than serve, geddit ? On the one hand, this may annoy you, on the other, they're not going to be bugging you and won't care if you sit and talk for an hour after your meal prior to asking for the bill. They're not going to ask you, you've got to ask for it. A 10% tip is standard. []
  16. With all the Venezuelan style in principle inflation these past decades, the dollar hasn't bought a nickel for some time and how many bucks to buy a buckskin these days is an exercise for the reader. []
  17. The supply of cafes, restaurants and bars has at least tripled over the past decade I'd say. []
  18. The zone was an unincorporated US territory until 1979 and USG formerly headquartered SoComm here, cutting the country in two geographically. []
  19. So get this: instead of reusing the original design of the original canal which chains the ships to locomotives to guide them through the locks, in the expanded locks they use... tugbots. 15 of the 700 (~2% !!) transits of the expanded locks experienced damages the first 6 months. With the bigger ships there is less room for error, yet they chose the design with less stability. []
  20. Source: Georgia Tech University, Panama via The Panama Canal Authority. () []
  21. 14,230 in 2010 to 13,795 in 2018 []
  22. ~204M vs ~255M tons 2010-2018. []
  23. ~$1.5B vs ~$2.6B 2010-2018. []
  24. Source: Georgia Tech University, Panama via National Institute of Statistics and Census of Panama (INEC) (archived). []
  25. Source: Georgia Tech University, Panama via National Institute of Statistics and Census of Panama (INEC) (archived). []
  26. Dem COPs have been getting ragdolled these past years too. []
  27. Sourced via Wikipedia. []
  28. The oversupply of hotel rooms lead to a law prohibiting short-term rentals. Short-term rentals of course can be found. []
  29. In the 90s the Effective Fed Funds Rate was above 5% most of the time and only briefly touched below the 3 handle by a whisker in December '93; compared to these last decades where 5% was only breached those few fateful months in autumn 2007. []
  30. There's a Trilema quote about Bitcoin being an eater of world, but I wasn't able to track it down. If you recall it, please link me ! []
  31. They signed onto this "Multilateral Competent Authority Agreement" with 97 other countries which means they all automagically give the information they have on you to whatever other country claims you. []
  32. I don't have to tell you it's some one and zeros on some server plugged somewhere 'in teh cloud', you know all about that I'm sure. Tell me again how US-no-longer-dollars or GB-no-longer-pounds are fundamentally different than WoW Gold ? I know, I know, only weirdos and children have WoW Gold, whereas ... []
  33. The so-called Panama Papers (The leaky law firm was global and the majority of corps in the dump were BVI.) scandal (It certainly is scandalous to allow your client db and emails to leak from a derpy wordpress.), the stick up of Waked and the multi-decade attack on a fundamental characteristic -- fungibility -- of what competes to become the market's most marketable good were big raids in 2016. []
  34. Word on the street is the 2014 gray listing lead to the loss of upwards of 70 (seven zero) virtual fiat correspondent accounts. How you like 'dem apples ? []
  35. Encuentra24 and OLX are the primary online entry points locals use. Craigslist is essentially dead here apart from gringos not knowing the better places to look. I've also walked through the neighborhoods I'm interested in and asked the guards about vacancies in the buildings that appeal. []
  36. I've not considered buying here, would rather save the BTC, you know ? []
  37. Central, older, commercial, residential, very walkable. []
  38. Coastal, central but a bit isolated, more expensive. I only lived there to walk to the Coinapult office. []
  39. Coastal, residential, more central than Punta Pacifica. This is the primary Jewish neighborhood with 2 temples. It's a great walking neighbor on it's own and is adjacent to La Cinta Costera park which stretches the coast ~3km to Casco Viejo. []
  40. East Central, easy to walk, mix of commercial, restaurants and residential. Parque Omar forms San Francisco's northern hat. []
  41. Coastal sliver east of San Francisco. Very residential. []
  42. The most central neighborhood it lies between Via España and Calle 50, two primary tranque arteries. It's a blend of commercial and residential. The metro follows Via España so there tends to be a lot of foot traffic. []
  43. A relatively newer development between the city center and airport, best accessible via ~5km toll road. Many multinationals are headquartered here. []
  44. The primary nightlife and tourist destination west of the city center. []
  45. 5km North of the city center, this is Panama's China Town. While Chinese are ~everywhere in the world, they have a long history here, first as imported labor for the Canal. Every neighborhood (And every town in the interior I've visited for that matter) has multiple bodega's referred to as Chinos. []
  46. Not only in terms of corporate, but also executive compensation. []
  47. One of the more onerous labor laws is 9 of 10 employees are supposed to be Panamanian. There are traditional ways around this such as an employee contracting through a company he owns or having a consulting agreement that's less binding than an employment contract. []
  48. Archived version of original pdf. []
  49. Implemented in 2012, citizen of 50 countries are eligible. I obtained this visa in 2014 by a) forming a corporation, b) depositing $5k in a local bank (which can be immediately withdrawn), and c) submitting various documents along with the application including a police background check from your country of origin. It was really a piece of cake and provides me lifetime permanent residency status with the option to apply for naturalization after 5 years. []
  50. You know, the guy that managed to negotiate control of the canal with that Georgian nobody cares to remember. []
  51. Former President Ricardo Martinelli (2009-2014) was extradited from Miami on corruption charges after fleeing shortly after his term was over. []
  52. Primarily focusing wellness - e.g. medical tourism, adventure, ecology - e.g. vegan hunting stuff like bird watching, and digital nomads. []
  53. I wonder how much dirt on public officials, etc. has been collected and sent north for sillycon valley and co analysis.. []
  54. Who wants to type with thumbs when they can talk ? Who needs to read when they can watch the tv movie ? "People who don't want to end up being fuckin' waffle waitresses, that's who !" []
  55. Complete with flashlight, thank you very much! []
  56. The OTC market has some depth. Some volume is settled via internal bank transfers, but cash is king here. []
  57. And the imposed change deeply resented. []
  58. Even today I understand this to be so in some cases. []

12 Comments »

  1. The eater of worlds quote

    This article was the first one I thought of. It misses the quote, but the subject of the article is how Bitcoin is an 'all-devouring eater of worlds.'

    Comment by whaack — November 14, 2019 @ 13:37

  2. The high prices, real estate bubble, and shrinking actual economy all sound very Uruguayo.

    Comment by BingoBoingo — November 14, 2019 @ 14:44

  3. Thanks for the link, there it is; and damn, that's a good article.

    Your first thought was mine as well, so I'm glad you layered it on! Would you say it's the subject or the theme though ?

    I also searched for, but didn't find the point on stable state of Bitcoin being achieved when it is responsible for 50%+1 of global energy consumption. So in the spirit of the article happening in the comments, here's a solicitation to kind readers for help on that front.

    Comment by Robinson Dorion — November 14, 2019 @ 14:55

  4. I realized I neglected to actually link Her Ladyship The Lady Falconeer's article, so that's now fixed.

    @BingoBoingo I can see it. I have friends who visited .uy to report sticker shock.

    Panama has somewhat of a floor to stand on given the canal's strategic importance globally. However, purchasing power shifts from west to east may very well lower that floor.

    It's struck me as ridiculous how small the manufacturing base is here given the degree to which factors of production converge here, especially when contrasted with the empty skyscrapers that ~continue~ to be constructed. The Problem of Too Much Money and all.

    Comment by Robinson Dorion — November 14, 2019 @ 15:58

  5. http://logs.ossasepia.com/log-search?q=Hussein+Bahamas&chan=trilema%3EHussein%20Bahamas%3C/a%3E%20and%20fellow%20bureaucrats%20of%20western%20demonocracies.%20Sure,%20it%20wasn%27t%20the%20first%20%3Ca%20href=

    ^ that portion looks broken.

    Anyway, the whole point of the USG's "tech" "corporations" is this collection of dirt on naive/manalone/unathorized sovereigns, such as the state of New Jersey, the repubic of Panama, etcetera. Second hand actors on the international scene.

    Comment by Mircea Popescu — November 14, 2019 @ 16:35

  6. stable state of Bitcoin being achieved when it is responsible for 50%+1 of global energy consumption

    Comment by Diana Coman — November 14, 2019 @ 20:06

  7. @Mircea Popescu It sure was, thank you and fixed. I mentioned the dirt collection primarily to poke at any locals in the audience. Thanks for expanding and driving further.

    @Diana Coman Thank you, it's it. Not sure how I overlooked that myself when I went looking for it ; if it was a snake it would've bit me!

    Comment by Robinson Dorion — November 16, 2019 @ 04:43

  8. In my experience, for whatever reason, many owner's would rather leave a rental vacant for months, sometimes years, at a price that may have been filled in the market 3 years ago but is quite a ways away from today's market reality than have the apartment filled and cash flowing.

    By no means limited to Panama, nor even to LatAm. People are irrationally loss-averse, where loss maps to the bold print under their nose, while the meaningful loss is too large and obscure to be looked at.

    When folks are incredulous about my burner phone it's sometimes fun to throw the thing on the ground so they can watch it "break", battery go flying out, etc. Then put it back together, turn it on, observe the (quite genuine, I think) envy.

    Have you successfully talked any of the OTC action away from the whatsapp circus?

    Anyway, thanks for the read --it's good to fill in some of the blank spaces in my assessment of that place.

    Comment by hanbot — November 16, 2019 @ 13:12

  9. @Robinson Dorion

    Agreed, bitcoin being an 'eater of world' is better described as the theme for that article.

    Comment by whaack — November 16, 2019 @ 14:46

  10. [...] published Life on the Isthmus, 83 monts in. early Thursday morning1, which felt great to get [...]

    Pingback by RMD review, Nov 11th-Nov 17th « Young Hands Club — November 18, 2019 @ 02:13

  11. @hanbot On the irrational loss aversion, it shown to not always work when you rub their nose in the bold print, me: "Yo, you realize discounting to me 10% now is a better deal than losing another month's rent with this thing idle at your imaginary price, yes ?" Them: (blankout).

    While I've definitely evoked the envy by removing my burner phone battery, I've not yet escalated the dramaz to the throwing the thing, lol!

    Have you successfully talked any of the OTC action away from the whatsapp circus?

    Only nibbled to date, but some success, yes. Conversations so far have revealed the whatsapp/"blockchain" circus has been more of a negative heuristic for the more professional financial network here, i.e. those who own the banks. Those conversations are still newer and need to develop further, but that's in part why were starting with the fundamentals and aim at creating a new market.

    Glad to fill in the negative space. I don't dispute your take, just have chosen to focus more on what gold can be extracted and do my best to carry on the tradition of Spaniards who settled the place to begin with.

    Comment by Robinson Dorion — November 18, 2019 @ 17:07

  12. [...] I burned 4 hours of midnight oil and missed the moved deadline by 5 hours, but managed to publish Life on the Isthmus, 83 months in with which I'm [...]

    Pingback by RMD: Reconciling Plans and Execution « Young Hands Club — December 4, 2019 @ 19:25

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