Saturday, June 23, 2018

Okay, One More: An Art School of Fish

Couldn't leave the series at cockroach milk.

From John Atkinson at his Wrong Hands blog, where he has "Another Art School of Fish"

Also at Wrong Hands: 
Canadian security threats

Scientists Swear Cockroach Milk Is the Next Big Superfood

Rounding out today's Surf-n-Turf special, a repost form June 23, 2017:

But how do you milk the wee vermin?
From Grub Street:
Wonderful news, everybody: Scientists say milk from the world’s only species of lactating cockroach is showing real potential as a thing humans can ingest. The Diploptera punctata, or Pacific beetle cockroach, as this freaky bug is known, gives birth to live young instead of laying eggs, and a team that included researchers from India, Japan, France, Canada, and the NIH here in the U.S. has discovered that the momma roach’s milk secretions actually are a “fantastic” source of nutrition, as they contain “all the essential amino acids” and supposedly more than three times the energy a person can get from cow’s milk. Each individual milk crystal is basically a fully balanced meal unto itself: To quote one author of the study, which ran in the journal IUCrJ, “The crystals are like a complete food — they have proteins, fats, and sugars.”...MORE
Roach milk? I'm still having trouble with that picture of the prime ministers of Finland, Sweden, Denmark,  Iceland and Norway eating their bugs and plankton a couple weeks ago:

"Nordics could become 'Silicon Valley' of food" (and Norway goes big on seaweed cultivation)
Please don't
As the bumper sticker says: "Mealworms aren't food, mealworms are what food eats".
Or something.

From EU Observer:
 Plankton, seaweed and edible insects were on the menu, when the prime ministers of Finland, Sweden, Denmark,
 Iceland and Norway met in Austevoll, southwest of the city of Bergen in Norway on Tuesday (30 May).
They launched an initiative called Nordic Solutions To Global Challenges, which aims to achieve the UN's sustainable development goals for 2030....
Roboburger Review
"How Iceland Beat the British in the Four Cod Wars"

Roboburger Review

Following up on Bloomberg's deep dive: "The World’s First Robot-Made Burger Is About to Hit the Bay Area", TechCrunch weighs in:

Taste test: Burger robot startup Creator opens first restaurant
$6 of algorithmic deliciousness
Creator’s transparent burger robot doesn’t grind your brisket and chuck steak into a gourmet patty until you order it. That’s just one way this startup, formerly known as Momentum Machines, wants to serve the world’s freshest cheeseburger for just $6. On June 27th, after eight years in development, Creator unveils its first robot restaurant before opening to the public in September. We got a sneak peek…err…taste.

When I ask how a startup launching one eatery at a time could become a $10 billion company, Creator co-founder and CEO Alex Vardakostas looks me dead in the eye and says, “the market is much bigger than that.”

Here’s how Creator’s burger-cooking bot works at its 680 Folsom Street location in San Francisco. Once you order your burger style through a human concierge on a tablet, a compressed air tube pushes a baked-that-day bun into an elevator on the right. It’s sawed in half by a vibrating knife before being toasted and buttered as it’s lowered to conveyor belt. Sauces measured by the milliliter and spices by the gram are automatically squirted onto the bun. Whole pickles, tomatoes, onions and blocks of nice cheese get slices shaved off just a second before they’re dropped on top.

Meanwhile, the robot grinds hormone-free, pasture-raised brisket and chuck steak to order. But rather than mash them all up, the strands of meat hang vertically and are lightly pressed together. They form a loose but auto-griddleable patty that’s then plopped onto the bun before the whole package slides out of the machine after a total time of about five minutes. The idea is that when you bite into the burger, your teeth align with the vertical strands so instead of requiring harsh chewing it almost melts in your mouth....MORE
We'll be back with MIT Technology Review when they're done noshing.

Stanford CS230—Deep Learning: "Project Reports and Posters, Spring 2018"

Stanford Computer Science is pretty darn happenin'.

From Stanford University's Deep Learning course (CS230):
Course Description   Deep Learning is one of the most highly sought after skills in AI. We will help you become good at Deep Learning. In this course, you will learn the foundations of Deep Learning, understand how to build neural networks, and learn how to lead successful machine learning projects. You will learn about Convolutional networks, RNNs, LSTM, Adam, Dropout, BatchNorm, Xavier/He initialization, and more. You will work on case studies from healthcare, autonomous driving, sign language reading, music generation, and natural language processing. You will master not only the theory, but also see how it is applied in industry. You will practice all these ideas in Python and in TensorFlow, which we will teach. After this course, you will likely find creative ways to apply it to your work. This class is taught in the flipped-classroom format. You will watch videos and complete in-depth programming assignments and online quizzes at home, then come to class for advanced discussions and work on projects. This class will culminate in an open-ended final project, which the teaching team will help you on. 


  • LSTM Music Generation by Xingxing Yang: report poster
  • Extracting High-Quality Poster Images From Videos by Katie Fo, Nat William Gardenswartz, Tam N Dinh: report poster
  • Image Colorization by Alex Avery, Dhruv Amin: report poster
  • Sketch Classification by Sushan Bhattarai: report poster
  • DeepSecurity Cybersecurity Threat Behavior Classification by Giovanni Sean Paul Malloy, Isaac Justin Faber, Isha Thapa: report poster
  • Predicting the Success of Crowdfunding by Chenchen Pan, Yan Chen, Yiwen Guo: report poster
  • Classification of blood cell subtypes by Sharon Shin Newman, Therese Maria Persson: report poster
  • Simulating nanophotonic neural networks at a component level by Ben Bartlett: report poster
  • Image Restoration of Low-Quality Medical-Diagnostic Images by Fariah Hayee, Katherine Lee Sytwu: report poster
  • Automatic Chord Arrangement from Melodies by Shuxin Meng, Yulou Zhou: report poster
  • Project Sunroof by Pranjal Patil, Vedang Hemant Vadalkar: report poster
  • Brain Computer Interface: Using Neural Activity to Predict Cursor Kinematics by Jonathan Henry Zwiebel, Robert Terrell Ross, Samuel Lurye: report poster
  • Guaging Political Bias on Twitter by Catherine Frances Lee, Jacob Shiff, Sridatta Thatipamala: report poster
  • DeepFugue: a model to generate Baroquestyle fugues by Aditya Chander, Samantha Elinon Silverstein, Marina Barbara Cottrell: report poster
  • Deep Learning for Partial Differential Equations (PDEs) by Bella Shi, Kailai Xu, Shuyi Yin: report poster
  • ChexNet2: Improvements for The Detection of Pneumonia with Deep Learning by Alexander Kucy, Liam Hassen Neath: report poster
  • Neural Network based Building Earthquake Vulnerability Prediction by Haiwen Wang, Zhaozhuo Xu, Zhiyuan Li: report poster
  • Image Super-Resolution for Facial Recognition by Corey Tze-chung Shih: report poster
  • Neural Networks for Baseball Data Analysis by Yifan Pi: report poster

The kids are alright.

WEF: "Three scenarios for the future of geopolitics"

From the World Economic Forum:
To understand events in the international arena, it helps to distinguish whether our current period is essentially stable or in significant flux. In an article written a quarter of a century ago, during another time of rapid and relentless change, my co-author and I described the former type of period as a plateau phase, and the latter as one of historical transition.
A series of recent developments suggests that the domestic political situations of several key players in the international arena are undergoing significant shifts, as are relations between players. Everything seems to indicate that the world is in another period of historical transition.

A shortlist of the developments that point in this direction include: the breakdown of the political centre in several advanced democracies; centrifugal tendencies in the long-prevailing regional and international structures, of which the Brexit vote is one example; the accentuation of authoritarianism in Russia and China; and last, but certainly not least, the collapse of American moral leadership.
Against this backdrop, how might we expect strategic relations to evolve in the next 20 years? In the short to mid-term, the key issue is the relationship between those powers that have been largely responsible for creating the post-WWII order, and those that are challenging it, in an effort to erect a new paradigm calling that order into question. In which direction this relationship is moving should become clear within the next five to ten years, and perhaps much sooner. There are essentially three possible outcomes.

One is that the current Western-dominated paradigm manages to overcome its current weaknesses and disunity, creating space for and movement towards a renewed democratic revolution. In the process, it forges an environment in which the challenging powers can be successfully encouraged to integrate. Call this 'liberal internationalism renewed' - a revamped version of the paradigm that has prevailed since the end of the Second World War.
A second possible outcome has the challengers to the Western-led paradigm - primarily, but not exclusively, Russia and China - succeed in taking advantage of its contradictions, to more or less peacefully establish the basis for the multi-polar world for which they have long been militating. Call this '21st-century concert', after the 19th-century Concert of Nations.

A third possible outcome resembles the second, but with one crucial difference. The rise of the multi-polarists turns violent, characterized by spiraling patterns of conflict that encompass ever more regions of the world. The resulting situation is similar to the strategic free-for-all that prevailed as the Concert of Nations was weakened, and ultimately condemned, by inter-state conflict rising to critical levels. Call this 'geostrategic meltdown', a new period of global conflict.
As for the factors driving these developments, there are five key ones....

"The Political Power of Global Corporations"

From Progress in Political Economy, April 21:
We have long been told that corporations “rule the world”, their interests seemingly taking precedence over states and their citizens. Yet while states, civil society, and international organisations are well drawn in terms of their institutions, ideologies, and functions, the world’s global corporations are often more simply sketched as market actors which are mechanisms of profit maximisation.  In The Political Power of Global Corporations I seek to demonstrate why they should be seen as explicitly political actors with complex identities and strategies that should be more the focus of our analysis than is often the case.

According to Peter Nolan, Dylan Sutherland and Jin Zhang by the end of the twentieth century no more than five global corporations controlled each of the world’s major industries, with around a third of these having one corporation accounting for more than 40 per cent of global sales. Colin Crouch observes that there has been a “corporate takeover of the market” by these enormous entities. As such, the free market, not just ideologically but conceptually, is defunct for understanding them. They may have been aided in their growth and expansion by free market policies and the neoliberal ideology underpinning them, but by their nature and their actions, global corporations themselves give the lie to, and as such undermine the veracity of, this vision. With the evidence that markets are neither free nor competitive but controlled by global corporations, in identifying them as political actors we should also declare them anti-market actors.

If one of the ways in which their political power is hidden is in being cast in competitive market terms, another is in seeing them as truly ‘global’.  It makes them seem like one of the ‘forces’ of globalisation, when in reality they are not as global as is often claimed.  For example, Alan Rugman and Alain Verbeke demonstrate that only nine of the world’s top 500 global corporations have sales in so many regions of the world that they may be regarded as truly global, while 320 of them still derive 80 per cent of their sales from their home region. 

The same may often be said of where their productive assets are located (for example, see Hinrich Voss). They may have global interests, but we need to re-territorialise global corporations because their home states and regions are the geographical source of their political power, just as their market control is its economic source....MORE

The US startup is disappearing

From Quartz:
Historically, startups have been the engine of US economy. By creating new jobs and surfacing new ideas, startups play an outsized role in making the economy grow.
It’s too bad they are a dying breed.

The share of companies that are startups has been falling
While companies that were less than two years old made up about 13% of all companies in 1985, they only accounted for 8% in 2014.
Image result for The US startup is disappearing

A far smaller share of people work for startups

From around 1998 to 2010, the share of private sector workers in companies that were less than two years old plummeted from more than 9% to less than 5%.

The startup decline is happening across the economy

A new report from the Brookings Institution, finds that in nearly every industry, from agriculture to finance, the share of new companies is falling.

So what’s going on?

It’s not entirely clear, but the authors of the Brookings report have some ideas.

One possibility: Startups are struggling in this era of rising market concentration. In most industries, since the 1980s, the share of all sales going to the top firms is increasing. Startups may have a hard time competing with these mega firms, which can out pay them for the best talent and sometimes attempt to drive them out of the industry. Previous Brookings research found there are fewer startups in states where a smaller number of companies dominate the market (pdf).

Another related possibility is that the most-educated American workers are no longer attracted to entrepreneurship. In 1992, 4% of 25-54 year olds with a master’s degree or PhD owned a small company with at least 10 employees. In 2017, this was true of only 2.2%. Companies started by the highly educated are often unusually productive....MORE

January 2013 
One More Time: It's Not Small Businesses that Create Jobs...'s small YOUNG businesses.

Long time readers are probably getting sick of the topic but it really matters when targeting government efforts at job creation. The sole-proprietor attorney making a couple hundred K in Chattanooga is not going to be creating jobs even if you cut his top marginal tax rate to 5%.

There are millions of people who have small businesses as a way to create a job for themselves and don't want the headaches and/or risks of expanding. There are millions more that are in declining businesses that can't expand. And on and on.

Here's FT Alphaville with a couple different pieces of the puzzles:...

Something Odd Is Happening In the Arctic: At Midsummer, Tankers Get Trapped In the Ice

From The Barents Observer, June 21:

Shipping in the Gulf of Ob is paralysed and the situation complicated, icebreaker company Rosatomflot says. 
It is late June, but the winter has not abandoned the Gulf of Ob. The shallow bay, which houses two of Russia’s biggest Arctic out-shipment terminals for oil and gas, remains packed with fast ice.
It has created a  complicated situation, Rosatomflot says. The state company which manages the Russian nuclear-powered icebreakers, confirms that  independent shipping in the area is «paralysed» and that LNG carriers and tankers are stuck.

The shipping companies had expected the Gulf of Ob to be free of ice in the course of June and that icebreaker assistance would not be necessary. They were wrong.

According to Rosatomflot, there appears to be a need for icebreaker services in the area at least until after the first week of July. There are currently two nuclear-powered icebreakers in the Gulf of Ob, the «Taymyr» and the «Vaygach». In addition, there are several smaller tugs and icebreakers working in the waters around the Sabetta port.

According to the icebreaker company, this is the first summer in four years that the Gulf of Ob is packed with this much ice.

«The global warming, which there has been so much talk about for such a long time, seems to have receded a little and we are returning to the standards of the 1980s and 1990s,» says company representative Andrey Smirnov.

The Yamal LNG plant is fully dependent on smooth shipping to and from the port of Sabetta. A fleet of 15 powerful top ice-class carriers are being built for the project. The ships are capable of independently breaking through more than two meter thick ice. Commercial shipments from Sabetta started in early December 2017.

Further south, company Gazprom Neft is operating the Novy Port project, which is built to be able to deliver up to eight million tons of oil per year.  A fleet of six tankers are being built for the Novy Port....MORE
Possibly related:
"U.S. Navy Releases Proposal Request for Coast Guard’s New Heavy Polar Icebreaker"
Arctic Doings: "Teekay’s New Icebreaking LNG Carrier ‘Eduard Toll’ Makes Historic Northern Sea Route Passage"
"Russia Official Announces Plans to Build Space Age Nuclear Icebreakers"
"How To Avoid A Naval Cold War In The High North"

Here are the sea ice thickness and volume measurements for the Summer Solstice 2018 and for the same date in 2008

"How Iceland Beat the British in the Four Cod Wars"

From Gastro Obscura:

For decades, two island nations came to blows over fish.
Our Hero
In Icelandic, they were known as Þorskastríðin, “the cod strife,” or Landhelgisstríðin, “the wars for the territorial waters.” In English, they were simply “the Cod Wars.” Between the late 1940s and 1976, the two island nations of Iceland and the United Kingdom all but declared war—despite the fact that there were almost no casualties, and the former had no army.

In the frigid waters between these two nations, four confrontations took place between Great Britain, a world superpower, and Iceland, a microstate of just a few hundred thousand people. Each time, Iceland won. And it all happened because of cod—and the right to fish it. These were the Cod Wars.
Perhaps unsurprisingly, a nation surrounded by hundreds of square miles of ocean on all sides relies heavily on fish. It has long been Iceland’s main food supply and primary export product. But of all fish, cod is the most important: a raison d’etre, a source of national pride to rival their soccer team, and a favorite thing to eat. Sometimes, it’s dried into a kind of fish jerky and smeared with butter. Sometimes, it’s salted (one of Iceland’s biggest exports). Sometimes, it’s simply the fish’s gellur (the fleshy triangular muscle behind and under the tongue) boiled or served in a gratin. It is Iceland’s very own watery white gold, and the country carefully guards its bounty.

But in the lead-up to the Second World War, Icelandic fishermen grew concerned about a preponderance of British ships in their waters, which affected how much cod they could catch themselves. Anxiety mounted until, in 1952, they announced new rules, limiting the Icelandic waters where British fishermen could trawl, and expanding Icelandic fishery zones from three to four nautical miles from the shore.

The United Kingdom, incensed by this swat from its tiny neighbor, retaliated by imposing a landing ban on Icelandic fish in British ports. It was a costly sanction—the U.K. was Iceland’s largest export market for fish. It backfired, however, when the USSR found homes for Iceland’s unsold fish. In the midst of its own Cold War, the U.S. followed suit, perhaps fearing greater Soviet influence, and encouraged its European allies to do the same. The sanctions thus minimized, Iceland could maintain their new limits. Eventually, in 1956, Great Britain capitulated the first Cod War, in the wake of a decision from the Organisation of European Economic Co-operation that sided with Iceland.

That might have been that, but in September 1958, Iceland expanded its national waters still further, from four nautical miles to 12, deep into waters that had previously belonged to no one. NATO, the Western military alliance, was up in arms, and Britain refused to cooperate. With the backing of virtually every western European country, Britain insisted they would continue to fish where they had before, under the protection of Royal Navy warships.

During the first Cod War, sometimes described as the prequel to the later three, Iceland had done little to enforce its ban: Its Coast Guard arrested only one British trawler. This time, however, skirmishes were frequent and shots were fired.

In one such altercation, in November 1958, the Icelandic gunboat V/s Þór fired warning shots at the British trawler Hackness. Eventually, the British navy ship HMS Russell intervened, and pointed out that the British ship was well outside the four-mile limit (that the British recognized as legitimate). Þór’s captain would not retreat, and ordered his men to man their guns and approach the wayward trawler. Russell, a comparable titan, made it clear that they would sink the boat if it shot the trawler. A brief stalemate followed, until the arrival of more British ships forced the Þór to back down....MORE
Also at Gastro Obscura:

The Turkish Roots of Swedish Meatballs
The Dying Art of Fishing for Shrimp on Horseback

Friday, June 22, 2018

The “Facebook Nevers” (the kids are alright)

The author is a general partner at Google Ventures GV.

From 500ish Words:
The fall of Facebook has nothing to do with people quitting the service…

The numbers are in and the trend is clear. That is, there is no trend. Despite months of controversy, users don’t seem to be leaving Facebook. Certainly not in any meaningful way.

This shouldn’t be surprising to anyone because this has been the story of Facebook since nearly the beginning of the network. It goes like this: There’s some outrage around something. There’s a lot of talk about and stories written about people quitting Facebook. Then no one actually quits.

Okay, sure, some people quit. And actually in the U.S., the number of active users has dipped a bit in recent quarters. But growth in the rest of the world is more than making up for those losses. Yes, believe it or not, there are still people on this planet not yet on Facebook — billions of them, even.¹ 

And so Facebook grows.

And yet, the tectonic plates are shifting. But they’re shifting under Facebook, as tectonic plates do. The fall of Facebook was never going to be people quitting the service en masse — it’s too interwoven into the fabric of the way many of us use the web these days — it was always going to be the people who never really use the service in the first place. Kids.

In this regard, the situation is similar to cable. For years and years we’ve heard about “cord cutters” — that is, the people who cancel their cable service (I’m one of them!). But the real story, the one that is and will be far more impactful, is the “cord nevers” — that is, the people who never got cable in the first place. Again, the young people....MORE

Twitter To Acquire the “Trust and Safety as a service” startup, Smyte

From TechCrunch:

Twitter ‘smytes’ customers
Twitter today announced it was acquiring the “trust and safety as a service” startup Smyte to help it better address issues related to online abuse, harassment, spam, and security on its platform. But it also decided to immediately shut down access to Smyte’s API without warning, leaving Smyte’s existing customers no time to transition to a new service provider.

The change left Smyte’s current customer base stranded, with production issues related to the safety of their own platforms.....MORE
So much for all that 'trust' and "safety" stuff.

"Personalisation is Asymmetric Psychological Warfare"

I believe I shall purloin the term "Uncanny Valley of Sincerity".

From Terence Eden's Blog:
Another privacy nightmare. An airline wants its cabin crew to know your birthday and favourite drinks order, to better personalise its service to you.
My first instinct is to recoil in horror. It sounds like every dystopian sci-fi epic.

But why do I feel this way? Partly it is the lack of genuine personality behind the interaction. It is the Uncanny Valley of sincerity. When Facebook wishes you happy birthday, it is a purely mechanical response - not an outpouring of genuine feeling.

There's also the issue of why they do this. At a base level, it is money. They want you to feel a positive association with their "brand" so that you will spend money with them.

They are hijacking your emotions. Nothing new here - the half-naked woman on a billboard trying to get you to buy car insurance, the catchy pop-song designed to make you pick one brand of cola over another, the ruggedly handsome man telling you how white your shirts can be...

But in the airline example, there is a sinister asymmetry. They know everything about you - and you know nothing about them.

Let's correct that.

Imagine as you get on the plane you smile at the pilot, glance at your phone, and say "Hope this landing is smoother than your last few, Sandra! Still, you should be fine as you only had two gin-and-tonics last night."

As the cabin crew serves you a drink "Dave! Can I get more peanuts? I know you're on your final warning from HR - and I'd hate for someone to put in another complaint."...

Alphaville's Dan McCrum Directs Our Attention To Sharks

Mr. McCrum, whom we last visited as he emceed Wednesday's Kaminska Live!:
DM: Welcome to the thing with the words, a special edition of Markets Live to collectively watch an evidence session of a parliamentary committee
DM: That doesn't sound nearly as weird as I thought it might in print
Today retweeted:
Although likely not familiar with the latest research, Dan intuitively gets onto a major story:

"SHARKS are not merciless killing machines — but ­sensitive souls with a passion for jazz, say experts"
Sharks are fans of jazz and swing music, scientists discover 
Scientists found Port Jackson sharks would swim towards spots where they played jazz more than any other genre of music
A study that trained sharks to associate music with food rewards learned they were not the aggressive flesh-crunching monsters of the Jaws movies. 
Instead, scientists discovered intelligent, sensitive creatures who responded well to training and showed a preference for the sophisticated jazz sounds associated with stars such as Duke Ellington, Louis Armstrong and Miles Davis....

Mr. McCrum may already regret triggering this train (wreck) of thought in yours truly.

Speaking of Sales Tax: "Avalara goes public, rings opening bell at the New York Stock Exchange, stock rises 87%" (AVLR)

From GeekWire, June 15:
Original story: Shares of Avalara spiked 50 percent from its initial public offering price on Friday as the Seattle-based company rang the opening bell at the New York Stock Exchange.

Avalara on Thursday priced its initial public offering at $24 per share, above the company’s expected range, reeling in $180 million. It is trading on the NYSE under the symbol AVLR.

Shares were trading around $37 per share on Friday morning, and by the end of the day Avalara stock sat at just under $45, up 87 percent from its IPO price.

Avalara, which sells sales tax automation software to more than 20,000 customers, initially looked to raise $150 million when it first announced its IPO intentions last month. It upped the expected stock price twice, most recently at $21 to $23 this week.

The final share price and Friday’s response on Wall Street indicates strong public market interest in the sales tax automation company, which sold 7.5 million shares of its common stock. Underwriters also have the option to purchase up to 1.1 million additional shares.

Avalara is one of nine SaaS businesses to go public this year; the companies produced returns of more than 40 percent on the first day for investors who received shares on the offerings, according to institutional research provider and IPO expert Renaissance Capital.

“Those who think the IPO market is dead are mistaken,” said Kathleen Smith, a principal at Renaissance Capital.

Avalara is the third Seattle-area company to go public in the past three months; Smartsheet and DocuSign also had strong IPO debuts in April and both continue to perform well on the public markets.

Stay tuned for more coverage of Avalara’s IPO this morning.

Follow-up: Orange crush: Avalara’s colorful culture helps sales tax company go public after 14 years
GeekWire, June 21: "Avalara stock soars following Supreme Court e-commerce sales tax decision"

Opportunity: The Algos Misread the Supreme Court Sales Tax Ruling (AMZN)

The story so far:

June 4: "Just a Reminder: "South Dakota v. Wayfair, Inc." Is Yet To Be Decided (AMZN)"
The retail behemoth says something like 80% of the transaction tax due gets paid, either as sales tax collected by the retailer or self-declared as use tax by the purchaser but that seems awfully high.
I've a sneaking suspicion we are about to find out what actual compliance is this Supreme Court session.

Here's the background at ScotusBlog:...
June 5: "GDPR, China and Data Sovereignty are Ultimately Wins for Amazon and Google" (AMZN; GOOG)
As will be the sales tax case mentioned yesterday. Amazon has the resources to deal with the 12,000 taxing jurisdictions, while its smaller competitors have no chance.
June 21 (ZH)  
Internet Stocks Tumble After SCOTUS Rules On State Internet Tax Collection

Wrong reaction from the 'puters: AMZN $1730.22 down $19.86 (-1.13%)

June 22 early pre-market: $1736.75  up $6.53 .

Thursday, June 21, 2018

Reuters Exclusive - "Tesla to close a dozen solar facilities in nine states: documents" (TSLA)

Jim Chanos weeps at what might have been.*
From Reuters:
Electric car maker Tesla Inc's (TSLA.O) move last week to cut 9 percent of its workforce will sharply downsize the residential solar business it bought two years ago in a controversial $2.6 billion deal, according to three internal company documents and seven current and former Tesla solar employees.
The latest cuts to the division that was once SolarCity - a sales and installation company founded by two cousins of Tesla CEO Elon Musk - include closing about a dozen installation facilities, according to internal company documents, and ending a retail partnership with Home Depot Inc (HD.N) that the current and former employees said generated about half of its sales.

About 60 installation facilities remain open, according to an internal company list reviewed by Reuters. An internal company email named 14 facilities slated for closure, but the other list included only 13 of those locations.
Tesla declined to comment on which sites it planned to shut down, how many employees would lose their jobs or what percentage of the solar workforce they represent.
The company said that cuts to its overall energy team - including batteries to store power - were in line with the broader 9 percent staff cut.
"We continue to expect that Tesla's solar and battery business will be the same size as automotive over the long term," the company said in a statement to Reuters.
The operational closures, which have not been previously reported, raise new questions about the viability of cash-strapped Tesla's solar business and Musk's rationale for a merger he once called a "no brainer" - but some investors have panned as a bailout of an affiliated firm at the expense of Tesla shareholders. Before the merger, Musk had served as chairman of SolarCity's board of directors.
The installation offices that the internal email said were targeted for closure were located in California, Maryland, New Jersey, Texas, New York, New Hampshire, Connecticut, Arizona and Delaware.
The company also fired dozens of solar customer service staffers at call centres in Nevada and Utah, according to the former Tesla employees, some of whom were terminated in last week's cuts. Those employees spoke on condition of anonymity because making public comments could violate the terms of their severance packages....

*See also:

Dec. 2017
So, How Was Tesla's Purchase Of SolarCity Not a Fraud? (TSLA; SCTY) 
We've been posting on this nasty bit of alchemy for years, some links below.
Today FT Alphaville's editor commends to our attention a Reuters article from Friday:
Tesla largely responsible for slide in U.S. home solar sales...
That was Izabella Kaminska with the heads-up. Her confrère, David Keohane (now FT-Paris) was also on SCTY with quite a few Further Reading posts linking to it—as well as SunEdison, another bit o'financial engineering gone wrong. Fond memories of SUNE; who can forget the time its death throes led to one of my favorite headlines:

and another, to which Mr. Keohane kindly linked:
It appears we have entered the realm of one of Zeno's Paradoxes, namely the Paradox of the Tortoise and Achilles, that no matter how many days SUNE drops 50% it never reaches zero. 21 cents, down 22 cents last....

The stock had traded above $32 in July 2015. The bankruptcy wiped out $16 billion in debt with the equity having declined by an additional $10 billion.
Good times.

Anyhoo, back to some of our prior Solar City posts:

The Short Argument Against Tesla
Mr. Chanos was taken to the cleaners by Mr. Musk on SolarCity: had Tesla not bought it, SCTY was on its way to bankruptcy court. We have quite a few posts on the bad blood between the two, use the 'Search Blog' box search term SCTY if interested.... 

"Tesla cites performance reviews as it fires SolarCity employees, though workers say reviews never took place" (TSLA)
The question that comes to mind is: Was the acquisition of SCTY a fraudulent altruistic stupid brilliant bailout of the Rive boys and maybe even Elon himself? 

Whitney Tilson on Shorting Tesla (and other stuff) TSLA
April 1, 2013 
Why We Don't Short Tesla: The stock is up 16% On The Day (TSLA)
August 2016
...For the longest time we had a Don't Short Tesla policy because it showed signs of being a cult stock and cult stocks can kill shorts. Plus it can be very hard to locate stock and very expensive to borrow when you do,
However, after the SolarCity deal and Elon's purchase of SCTY debt (on top of his SpaceX buying SCTY debt) I'm more open to betting against the company, at least tactically if not to zero.
Remember, your mileage may vary, close cover before striking etc.

June 2017
"Einhorn Compares GM to Apple and Explains Why He’s Short Tesla" (TSLA; GM)

..It is just so dangerous to put valuation (as compared to fraud) shorts on in a bull market.
We have had a general rule, "Don't short Tesla" virtually since the IPO, that we've violated on three occasions, fortunately profitable but it is tough to tell if it was worth the risk. 

Why SolarCity Has Become a Shell of Its Former Self Since Tesla Buyout (TSLA)
This is a $3,000,000,000 scandal and no one seems to care.... 

SolarCity/Tesla: Analysts React (SCTY; TSLA)
Not only is Tesla taking on almost $3 billion in SolarCity debt, it is also buying into the problem of even more negative cash flows, both Operating and FreeCashFlow.

Which of course, along with the corp. governance nastiness, explains why Tesla has lost almost 11% of its market cap, amounting to $3.14 billion on the 133 million shares out and more than the entire market cap for SCTY (98,296,422 shares at $22.30, up 5.2%).

The market is saying SCTY is worth less than zero to Tesla.

We'll have a lot more to say about this in the coming days....
Tesla-Solar City: Cousins Shouldn't Get Married (to each other) TSLA; SCTY--UPDATED

So, Who Will Write A Fairness Opinion On The Tesla/SolarCity Deal? (TSLA; SCTY)

More On SolarCity/Tesla and Fairness Opinions (SCTY; TSLA)
"Elon Musk Faces Cash Squeeze at Tesla, SolarCity" (TSLA; SCTY)

"Short-Seller Chanos Calls Tesla-SolarCity Merger 'Crazy': CNBC Conference" (TSLA; SCTY)   

Today In Depreciation: Does Tesla Really Understand What It’s Buying in SolarCity? (TSLA; SCTY)

Tesla, SolarCity Tumble Ahead Of New Merger Financials (TSLA; SCTY)
Attentive reader may have noticed we didn't cover Mr. Musk's press conference on the roof tile solar panels last Friday. We've been at the market long enough to recognize a master magician's "hey, look at this" misdirection. The tiles aren't going to matter to anyone for at least a year, probably two, and by then I would expect the market to have changed to the  point that they will be recognized as a niche at best.

The oohing and ahing from the assembled journos was kinda funny though; in a naïve, never had to bet real money sort of way.... 
"Wait, Tesla Motors Might Need to Raise $12 Billion?!?!" (TSLA; SCTY)
We've been thinking $6 billion to cover the build-out of the factories in Fremont, CA and Nevada and the New York SolarCity plant along with funding the higher cash burn after the SCTY merger.

And we were at the high end....
How Do We Know James Chanos Got Under Elon Musk's Skin? (TSLA SCTY)
Chanos has been living rent-free in Elon's head for over a year.
The departure this week of the second of Mr. Musk's two cousins, the Rive boys who had been running SolarCity reminded me I had promised another example of the toll the stress of keeping all the plates spinning may be taking on Elon.
In Monday's "Being Told Tesla Exists Because of Tax Breaks and Subsidies Drives Elon Musk Crazy (TSLA)" I said:
Regarding Mr. Musk, it is starting to appear he's a bit thin-skinned, we'll have another example later today or tomorrow....
went into a meeting and forgot until today.

Here's the set-up for this example. Back in the fall of 2015 Chanos was pretty vocal about SolarCity being the quintessential short-it-to-zero-stock. The company was burning enormous amounts of cash, had no path to profitability, and couldn't get anyone but SpaceX to buy their debt.
On October 21 SCTY shared their financials and we posted "Pray For Elon Musk: SolarCity Drops 21% (SCTY)".

The public relations people earned their keep with "SolarCity pivots to slower growth mode" and I recounted how earlier, in August, Lyndon Rive, SolarCity's CEO was told Chanos was shorting his stock and  "SolarCity's CEO When Told Jim Chanos Is Shorting His Stock: "First I've ever heard of the guy" (SCTY)".
Oh dear.
Oh dear, oh dear, oh dear.
SolarCity's CEO is an ahistorical idot.
I mean we're all idots from time to time but most of us at least try to conceal our idot-hood from the freakin' media!
Well, Mr. Chanos apparently took note of Rive's comment and the next day, while being interviewed on CNBC started out with "One of our big short positions in the renewable space is SolarCity".
The interviewer says "Elon Musk's company" and Chanos replied "Who?"
Here's the video if you care to see it, it's pretty funny: "SolarCity: Jim Chanos On Elon Who? (SCTY)".
Fast-forward to the week before last and, via Sujeet Indap, the FT's Lex US editor:
The Journal does a story on Tesla's need for cash,
One of the fanbois tells Elon not to sweat it,
Mr. Musk uses a variant of the 2015 trash talk: ...["never heard of them"]...

...The upshot? Elon got to use the line, the Rive boys got to say "thanks cuz" for turning their going-to-be-worthless SCTY stock into TSLA, I get to do this post and Chanos got screwed by the self-dealing bail-out but hey, 3 out of 4 ain't bad.
Plus, the TSLA the cousins received may or may not be worth the current price after the model 3 roll-out.
We shall see. 
And many more.

"The World’s First Robot-Made Burger Is About to Hit the Bay Area"

Watch out China.
You may be able to pick, pack and ship 200,000 orders/day with a four person team but the U.S. has $6.00 roboburgers.

From Bloomberg, June 21:
On June 27, the world’s first robot-crafted burger will roll off a conveyor belt in San Francisco and into the hands of the public.

You could call it the freshest burger on Earth.

The product, from Bay Area-based Creator, a culinary robotics company, is assembled and cooked in a machine that contains 20 computers, 350 sensors, and 50 actuator mechanisms. It does everything from slicing and toasting the brioche bun to adding toppings (to order) and seasoning and cooking the patties, all in five minutes. The meat is ground to order—why it’s touted as so fresh—and sourced from premium ingredients. It emerges from the machine piled with tomatoes and lettuce, sprinkled with seasonings, and drizzled with sauces, at which point it’s transferred by human hands to the customer. The price: $6.

Formerly known as Momentum Machines, Creator was founded by entrepreneur Alex Vardakostas in 2012. The 33-year-old has assembled an Avengers-like superteam of engineers, designers, and roboticists from Apple, Tesla, NASA, and Walt Disney Imagineering R&D. The team also includes alumni from elite restaurants such as Chez Panisse, Momofuku, and SingleThread.

Vardakostas’s pitch is simple: Machines can cook burgers over a hot griddle and slice tomatoes more efficiently than a human can and don’t have the health hazard of showing up to work the grill with a cold. And then there’s the social media gold mine that a Willy Wonka-esque food machine presents. The 14-foot-long contraption, which the team refers to as a “culinary instrument” rather than robot, features glass chutes that transport buns, silos that dispense sauces, and paddles that gently push the evolving burger along.

“June 27 is a big day,” says Vardakostas. “When I started this process eight years ago, there wasn’t the inevitability that this would happen with food. Now not only is it inevitable, but it also produces a much higher quality product.”

I went to the Creator storefront, in San Francisco’s South of Market neighborhood, to sample the four burgers that will be on offer when the place opens and decide whether Creator burgers deserve to be as ubiquitous as driverless cars.
Enter the Machine
The 2,200-square-foot Creator space is spare and clean, with white-tiled walls, a poured concrete floor, and light ash wood accents. (Per Salvaag, a lead designer for BMW, consulted on the space.) It looks more like a salad bowl spot than a burger place, with only a discreet scent of griddled meat to set it apart. Even the prep stations that ready accompaniments such as skin-cut fries and seasonal grain salad are hidden behind large glass-walled refrigerators showing off the principal ingredients. Instead of a counter, the glass-walled machine is front and center. Within are a series of oversize vertical tubes with stacks of tomatoes, onions, pickles, and so on.
Lanes of brioche buns are positioned overhead. “I consider this to be the most transparent restaurant,” says Vardakostas. The one part of the burger-making process that customers won’t see is the grinding and cooking of the burger. “There was a hesitation about seeing meat being ground,” he adds.

The machine in action is a made for fast-motion video. First the brioche travels across the chute, pushed by a wooden block (and air pressure). It then shimmies down a chute as it’s sliced, toasted, and deposited in a leaf-shaped, custom-made container. Traveling along the copper-colored conveyor belt, it lands under the sauce spigots—there are around eight on offer, including barbecue, onion jam, shiitake mushroom, and ballpark mustard. Next are the sweet pickles, tomatoes, and onions—sliced to order, they land in slow motion on the bun. Shredded lettuce follows, then cheese—mild or smoked Cheddar and grated to enhance the melting potential. At the end of the line are large tubes of seasoning, including alderwood smoked salt, sprinkled on the griddled 4-ounce burger before the patty lands on the cheesed half of the bun.
The only workers you’ll see around the machine, apart from the odd employee replacing ingredients, are “concierges” at the front of the contraption to take orders and payment and a few at the end to serve the burgers....MUCH MORE, it's actually a pretty big deal.

Why Do Cities Want Their Own Cryptocurrencies?

Just flagging the trend here. There's so much boosterism involved in both municipalities and crypto that combining them....we'll leave it to others to do the analysis.

From CityLab:

The allure of digital currencies has hit Dubai, Seoul, Berkeley, and more. What looks like another offshoot of the Bitcoin craze could be an evolution of the municipal bond.
Coming soon to Slovenia: a brand new city that runs completely on cryptocurrency.
If all goes according to plan, BTC City will rise from the ashes of a former commercial shopping district in the country’s capital of Lubljana, offering wallet-less shoppers and wide-eyed tech enthusiasts a chance to engage in a more modern brand of conspicuous consumption. Every store in the 1.5 million-square-foot plot will stop accepting cash and start accepting crypto.

It’s a big deal for the small, former Yugoslav country. But it’s small potatoes compared to some other municipal efforts to wade into the world of digital financial systems. BTC City’s aim is to get people to use the dozens of digital currencies that already exist. Elsewhere, cities are vying to create new ones from scratch.

The list of cities experimenting with cryptocurrencies is diverse, and so are their goals. Dubai launched emCash in 2017 to flex its high-tech prowess as a “smart city.” Berkeley, California, is exploring a city-branded cryptocurrency effort to fund municipal bonds, making up for inadequate outside investment. Cities in Venezuela are bartering with Petros in a desperate—and questionable—attempt to raise funds amid the country’s economic crisis. And Seoul’s mayor has floated the idea of creating S-coins to fund social welfare programs for the sake of efficiency and advancing technology.

What’s less clear, though, is how exactly a city-specific cryptocurrency would work—and what cryptocurrencies can do for a city that cash can’t.

Why go crypto?
The first thing to understand is that there’s a major distinction between government-backed cryptocurrency and the more well-known financial instruments like Bitcoin or Ripple. Those virtual currencies are essentially “built by air, and backed by air,” said Sheila Warren, project head of blockchain and distributed ledger technologies at the World Economic Forum. In other words, their value is determined by the complicated coding it takes to mine them, in the case of Bitcoin, and how much people are willing to pay for them....

Machine Learning: Google Is Now Offering "GPU's as a Service" (GOOG; NVDA)

From Google's Cloud Platform blog:

GPUs as a service with Kubernetes Engine are now generally available 
[Editor's note: This is one of many posts on enterprise features enabled by Kubernetes Engine 1.10. For the full coverage, follow along here.]
Today, we’re excited to announce the general availability of GPUs in Google Kubernetes Engine, which have become one of the platform’s fastest growing features since they entered beta earlier this year, with core-hours soaring by 10X since the end of 2017. Together with the GA of Kubernetes Engine 1.10, GPUs make Kubernetes Engine a great fit for enterprise machine learning (ML) workloads. By using GPUs in Kubernetes Engine for your CUDA workloads, you benefit from the massive processing power of GPUs whenever you need, without having to manage hardware or even VMs.

We recently introduced the latest and the fastest NVIDIA Tesla V100 to the portfolio, and the P100 is generally available. Last but not least, we also offer the entry-level K80, which is largely responsible for the popularity of GPUs. All our GPU models are available as Preemptible GPUs, as a way to reduce costs while benefiting from GPUs in Google Cloud. Check out the latest prices for GPUs here. As the growth in GPU core-hours indicates, our users are excited about GPUs in Kubernetes Engine. Ocado, the world’s largest online-only grocery retailer, is always looking to apply state-of-the-art machine learning models for customers and Ocado Smart Platform retail partners, and runs the models on preemptible, GPU-accelerated instances on Kubernetes Engine.
“GPU-attached nodes combined with Kubernetes provide a powerful, cost-effective and flexible environment for enterprise-grade machine learning. Ocado chose Kubernetes for its scalability, portability, strong ecosystem and huge community support. It’s lighter, more flexible and easier to maintain compared to a cluster of traditional VMs. It also has great ease-of-use and the ability to attach hardware accelerators such as GPUs and TPUs, providing a huge boost over traditional CPUs.” — Martin Nikolov, Research Software Engineer, Ocado

See also the "Getting Started with Google Kubernetes Engine" at Coursera if you want to start your DIY ML co.

As Wikipedia says about Kubernetes:
The original codename for Kubernetes within Google was Project Seven, a reference to Star Trek character Seven of Nine that is a 'friendlier' Borg.[9] The seven spokes on the wheel of the Kubernetes logo is a nod to that codename.

"Does Elon Musk really understand Iain M Banks's 'utopian anarchist' Culture?"

From the Guardian:
"The tech entrepreneur has endorsed a vision of monolithic totalitarianism overseen by machiavellian machines – and one that is neither entirely utopian or anarchist"
Easy for you to say.

As noted back in December 2016:

21st Century Headlines

I delude myself that I am reasonably up-to-speed on the zeitgeist and on technology but twenty or so times a day things are brought to my attention about which I was heretofore clueless.

Here's a headline from VentureBeat:
Bot-making service now supports Node.js
And all I can think of is a scene from Friends eighteen years ago:
Phoebe: They don't know we know they know we know. And Joey, you can't say anything.

Joey:      Couldn't if I wanted to.
And this one, also VentureBeat:
Super Evil Megacorp starts team-franchise program to energize Vainglory...
I would expect nothing less from SEMC.

According to CrunchBase Super Evil Megacorp has raised $42 million in three venture rounds.
I'd buy it just for the name. But wasn't invited.

Finally Quartz almost made the Questions America Wants Answered series with:
What Nike’s $720 self-lacing sneaker, releasing today, signals about Nike’s future
until I realized I didn't care what Nike's $720 self-lacing sneakers signaled about Nike's future.

And this happens every day.
I just nod my head and try to change the subject to something simpler.

Capital Markets: "Dollar Driven Higher"

First up, the US Dollar Index:
95.14, up .42 (+0.44%)

And from Marc to Market:
The half-hearted and shallow attempts by the currencies to recover appear to be emboldening the dollar bulls today, The greenback is higher against all major and emerging market currencies today. Demand for dollars is strong enough to offset the broader risk-off environment that is pulling stocks and core yields lower that is usually supportive of the yen. The greenback stretched to a week high near JPY110.75 today.

Asian shares were lower, and the MSCI Asia Pacific Index gave back yesterday's 0.6% gain that snapped a five-day decline. The negative sentiment is illustrated by the fact that the Moody's upgraded Samsung's credit (1st in 13 years) and Korea's shares still tumbled over 1%.

Chinese officials indicated another cut in reserve requirements was likely, but the PBOC failed to deliver today. Despite injecting more liquidity and tweaking its forward guidance, the PBOC could not prevent a further slide in Chinese shares. On the other hand, Australia continued to buck the regional trend and shrug-off worries about rising trade tensions. The S&P ASX 200 rose nearly 1% today to bring the five-day rise to a smart 3.6%.

European bourses are lower, though sterling's weakness is underpinning the FTSE 100. Healthcare and consumer staple sectors are performing well, while financials and utilities are the largest drags. Italy's bonds and stocks are underperforming. The equity market is off nearly one percent at midday, and the 10-year bond yield is up about 15 bp, while rest of the peripheral yields are up four-six basis points.

Two major central banks met. The Swiss National Bank left policy unchanged and repeated its refrain about the franc being over-valued and that it is prepared to intervene. Although it tweaked its inflation forecast higher, it warned of downside risks due to oil. It also recognized risks posed by Italy's new government. The franc is trading at its best level here in June against the euro. Norway's Norges Bank left rates steady as well, but it signaled a rate hike in September. The krone made a new marginal high for the year against the euro. However, the euro quickly recovered back above NOK9.40.

Against the dollar, the euro cannot find much traction. It has completely unwound the gains scored in the first part of the month, culminating in the initial response to the recent ECB meeting. Yesterday Draghi hinted at a material decision about the reinvesting of maturing bonds. Currently, the rules allow for flexibility and the proceeds have to be reinvested within three months. Imagine instead, it is the period is extended to say 12 months. This would appear to make the recycling that is a simple matter of course in the US into a potentially new powerful tool that could be used to support the market for longer....

Wednesday, June 20, 2018

SEC documents detail scores of fraud allegations against Andreessen-backed Coinbase

People are complaining to the SEC?
That is not what you want ahead on your IPO.

From Mashable:
Life savings lost. Desperate cries for help. Allegations of fraud.

In the six years since its founding, the San Francisco-based exchange Coinbase has established itself as one of the most trusted places to trade ether, bitcoin, litecoin, and bitcoin cash. It's also run up its share of critics: namely, its customers.

In 134 pages of complaints filed to the SEC and the California Department of Business Oversight obtained by Mashable following a five-month FOIA process, a picture emerges not of a responsible actor in the cryptocurrency space opening the market to new investors, but rather a company overwhelmed by and underprepared for its own success.

And the consequences — as expressed by Coinbase's own customers — are enough to give even the most diehard crypto-enthusiast pause.

Money gone and no one home
A recurring theme in the SEC complaint files Mashable obtained is the seeming disappearance of a would-be trader's money, and what is portrayed as an aggressive nonchalance on the part of Coinbase in response to the loss.

Notably, the SEC redacted the complaints to remove personally identifiable information. This, while an understandable privacy measure, makes it practically impossible to reach out to the complainants for follow up. As such, we'll mostly let their words speak for themselves.
And there are a lot of words.

One complaint, filed in January of this year, is typical of the frustration expressed by many.
"I have sent 17,023.00 from my Coinbase account to another Coinbase account on 12.21.2017," it reads. "The other Coinbase account never received the funds as of 1/16/2018. I have contacted Coinbase over 7 times and all they say is that they have so many issues, they will get back to me and it is been a month."...

 If interested see also:
Jan. 31
"Coinbase Strategy Teardown: How Coinbase Grew Into The King Midas Of Crypto Doing $1B In Revenue"

March 6
"Announcing Coinbase Index Fund"
Coinbase, and the things Coinbase is doing seem to be a more realistic way for Andreessen Horowitz to make money out of Bitcoin than their 21.Co. (see below)...

April 9 
Andreessen Horowitz Investee Coinbase May Buy Andreessen Horowitz Investee (né
That's one way to exit. was not mentioned in April 4's "Crypto M&A: "Three Startups Coinbase May Have Its Eye On"" because it's such a Tesla/SolarCity-cousins-shouldn't-marry type of deal.

Yet here we are....

And many more but that's such a nice progression we''ll stop here. Use the 'search blog' box if interested in more.