Monday, October 19, 2020

Lithium: Political Heir to Former Leader Evo Morales Appears To Have Won Presidency In First Round

 "Kid, the next time I say, 'Let's go someplace like Bolivia,'
let's go someplace like Bolivia." 
—Butch Cassidy & the Sundance Kid (1969)

Via AFP's timeline:

Bolivia is the world's largest producer of lithium.
Butch Cassidy was a real bank robber.
We have a lot of stories on lithium.  

July 2017
January 2010
After the next coup the ruling party can take solace in:

Meanwhile, In Washington State: "After a corpse fell on the former Coulee City Police Chief’s head in 2012, she claimed workers’ compensation"

From the Spokane Spokesman-Review:

After a corpse fell on the former Coulee City Police Chief’s head in 2012, she claimed workers’ compensation. But an investigation by the Washington State Department of Labor & Industries alleges she was really working as a pinup model during that time.

Brenda Lynn Cavoretto, 47, was charged with two counts of making false or misleading statements to collect more than $67,000 in workers’ compensation benefits.

After a corpse fell on the former Coulee City Police Chief’s head in 2012, she claimed workers’ compensation. But an investigation by the Washington State Department of Labor & Industries alleges she was really working as a pinup model during that time. .


People are so creative. 

Private Equity as Hospital Owners

There's a lot to dislike about PE owning critical infrastructure.

From the NYT via the Chicago Tribune, October 13:
A $52,112 Helicopter Ride: Coronavirus Patients Battle Surprise Medical Bills

Congress was close to a solution before getting hit with millions of dollars of ads from private-equity firms. Then the pandemic struck.

An intubated coronavirus patient was declining rapidly when doctors decided to airlift her to a hospital with better critical care resources.
“It’s life or death,” the family of the 60-year-old woman recalled being told when it happened in April. “We have to transfer her now.”

The patient was flown by helicopter from one Philadelphia hospital to another 20 miles away. She spent six weeks at the new hospital and survived. When she came home, a letter arrived: The air ambulance company said she owed $52,112 for the trip.

Last year, Congress abandoned its attempt to prevent surprise bills like this one, and coronavirus patients are now paying the price. Bills submitted to The New York Times show that patients often face surprise charges from out-of-network doctors, ambulances and medical laboratories they did not pick or even realize were involved in their care.

The plan to ban these kinds of bills was popular and bipartisan, and it was backed by the White House. It fell apart at the 11th hour after private-equity firms, which own many of the medical providers that deliver surprise bills, poured millions into advertisements opposing the plan. Committee chairs squabbled over jurisdictional issues and postponed the issue. Then the pandemic struck.
‘How am I going to pay this all off?’

The Pennsylvania patient had no way of knowing that her helicopter, which transported her between two in-network hospitals, did not have a contract with her health insurance plan. Nor could she have known that the air ambulance service, owned by a private-equity firm, faces multiple lawsuits over its billing tactics.
Her health plan, Independence Blue Cross, initially said it would pay $7,539 of the bill, according to billing documents reviewed by The Times, but then rescinded the money. The patient, housebound because of lingering coronavirus symptoms, was left with the full amount.
“She was intubated and on a ventilator when her providers felt it was necessary that she be transferred,” said Leslie Pierce, a division chief at the Pennsylvania Insurance Department, who handled the complaint that the patient submitted to the agency. “She had no decision in the selection process.”....


Venture Capital: Bezos-Backed Vertical Farmer Raises Another $140m in Series D round led by Driscoll’s and SoftBank

As noted in July 2019's "U.S. vertical farms are racing against the sun": These are not scrappy little startups, it's big, big money. 

From AgFunder, October 15:

Vertical farming startup Plenty has closed a $140 million Series D round led by existing backer SoftBank and new investor Driscoll’s. This round brings the startup’s total funding to $500 million.

“We looked at other vertical farms, and Plenty’s technology was one of the most compelling systems we’d seen for growing berries,” said J Miles Reiter, chairman and CEO at fruit firm Driscoll’s, in a statement. 

“We got to know Plenty while working on a joint development agreement to grow strawberries. We were so impressed with their technology, we decided to invest.”

The funds will be used to help with Plenty’s expansion plans, which include a series of commercial collaborations with retail group Albertsons and Driscoll’s. The Albertson’s deal was announced earlier this year and will see Plenty’s branded packaged salad greens stocked at 430 Albertson’s stores.

Its partnership with Driscoll’s will involve R&D around strawberry cultivation. Plenty has been working on the fruit — as well as tomatoes and other crop varieties — for a couple of years, according to Nate Storey, the startup’s co-founder and chief science officer....


Driscoll's itself is no slouch. Privately held, it controls around 35% of the U.S. berry biz, ~$2 billion.

Previously on Plenty:
October 2017
Tesla's Former Battery Director Joins Farming Startup—UPDATED
January 2018
Bezos/SoftBank-Backed Indoor Farming Powerhouse Plenty Planning for 300 Farms in China
March 2019
Former Twitter CFO Joins SoftBank-Backed Farming Startup Plenty
March 2020
"SoftBank-Backed Farming Startup Plenty Is In Talks to Raise Cash"
If you are like me, you look back fondly to the days when you woke up hoping to hear about ear rot or vomitoxin in the corn.
But no, it's coronavirus and Softbank for the foreseeable future....

And many more, use the 'search blog' box upper left if interested.  

Venture Capital 2020: Funding For Mental Health Startups Is Booming

 From PitchBook, October 14:

Driven by pandemic demand, mental health startups surpass 2019 funding

Totaling $1.37 billion through the third quarter, venture capital funding of US mental health startups this year has already outpaced the $1.06 billion invested in 2019, according to PitchBook data.

Moreover, investments in the space have more than quadrupled since 2015.

In what could be the second-largest mental health VC deal of the year, Calm is reportedly in talks for a $150 million funding round that could value the meditation app maker at $2.2 billion. 

Early investors in the San Francisco-based company reportedly may be allowed to sell shares in the deal, Bloomberg reported. Calm's existing backers include TPG, Insight Partners and Lightspeed. It was valued at $1 billion last year after raising an $88 million Series B.

"Mental health cases, obviously, are on the rise in large part due to this pandemic," said Katherine Andersen, head of life science and healthcare relationship banking at Silicon Valley Bank. In a survey conducted by the Centers for Disease Control in June, around four in 10 Americans reported struggling with a mental or behavioral health condition.

"I do think we're going to see a lot of investment and activity generally across mental and behavioral health going forward," Andersen added....MORE

"Glencore in talks with carmakers and battery makers about nickel, CEO says"

The Financial Times' Neil Hume was moderator at last week's FT Commodities event. For the cognoscenti and other folks who might be interested, his Twitter timeline is after the jump. 

From Reuters, October 16:

Glencore CEO Ivan Glasenberg said on Friday that the company is talking with carmakers and battery makers about nickel - a key component in electric vehicle batteries which Tesla CEO Elon Musk has asked miners to produce more of.

“A lot of the automobile guys and the battery guys are talking to us about nickel,” Glasenberg said, speaking during the Financial Times Mining Summit. Glencore this year signed an agreement with Tesla to supply it with cobalt from the Congo.

Glencore produced 121,000 tonnes of nickel in 2019 and sold 181,000 tonnes through its marketing business. Glencore owns nickel mines in Australia, Canada and New Caledonia and a nickel refinery in Norway.

The miner already supplies German carmaker BMW with cobalt metal from its Murrin Murrin nickel-cobalt mine in Australia....MORE

When I say cognoscenti I mean fans, as in fanatics. Mr. Hume is an FT Alphaville alumnus and here is an example of the madness he inspires:

voiceover: Bryce Elder has been singlehanding Markets Live but on this November day in 2017 has a visitor:

BE This is Markets Live, FT Alphaville's daily thing with the typing and etc.

BE And good news! I'm not solo today.

BE Because joining me is Neil Hume.

NH Hola

BE Neil's FT's commodities editor these days. Though you'll probably know him better as founding member of the AV team and the editor for two years through the sov debt crisis.
erlkin  neil hume rocks
  AAAA  bonjour les amis !
                               Boncoeur  crikey, Neil Hume is in da house!

NH Mining and Commodities - they gave me more work to do

BE Yes, that. And, unusually, it appears the system works. Good to have you with us Neil.

NH It's been a while

NH I think I remember how everything works

GBKrona Hola - welcome back @NH

 The rabble were roused from their existential dread of facing another day of toil in the equity mines.

 Take a look and see why:

"To Break Google’s Monopoly on Search, Make Its Index Public" (GOOG)

 Treat them like the utilities they are.

The author,  Dr. Robert Epstein is the former editor-in-chief at Psychology Today, search-engine researcher, Huffington Post contributor etc.

From Bloomberg Businessweek, July 15, 2019:

The tech giant doesn’t have to be dismantled. Sharing its crown jewel might reshape the internet.

Recognition is growing worldwide that something big needs to be done about Big Tech, and fast.
More than $8 billion in fines have been levied against Google by the European Union since 2017. Facebook Inc., facing an onslaught of investigations, has dropped in reputation to almost rock bottom among the 100 most visible companies in the U.S. Former employees of Google and Facebook have warned that these companies are “ripping apart the social fabric” and can “hijack the mind.”
Adding substance to the concerns, documents and videos have been leaking from Big Tech companies, supporting fears—most often expressed by conservatives—about political manipulations and even aspirations to engineer human values.

Fixes on the table include forcing the tech titans to divest themselves of some of the companies they’ve bought (more than 250 by Google and Facebook alone) and guaranteeing that user data are transportable.

But these and a dozen other proposals never get to the heart of the problem, and that is that Google’s search engine and Facebook’s social network platform have value only if they are intact. Breaking up Google’s search engine would give us a smattering of search engines that yield inferior results (the larger the search engine, the wider the range of results it can give you), and breaking up Facebook’s platform would be like building an immensely long Berlin Wall that would splinter millions of relationships.

With those basic platforms intact, the three biggest threats that Google and Facebook pose to societies worldwide are barely affected by almost any intervention: the aggressive surveillance, the suppression of content, and the subtle manipulation of the thinking and behavior of more than 2.5 billion people.

Different tech companies pose different kinds of threats. I’m focused here on Google, which I’ve been studying for more than six years through both experimental research and monitoring projects. (Google is well aware of my work and not entirely happy with me. The company did not respond to requests for comment.) Google is especially worrisome because it has maintained an unopposed monopoly on search worldwide for nearly a decade. It controls 92 percent of search, with the next largest competitor, Microsoft’s Bing, drawing only 2.5%.

Fortunately, there is a simple way to end the company’s monopoly without breaking up its search engine, and that is to turn its “index”—the mammoth and ever-growing database it maintains of internet content—into a kind of public commons.

There is precedent for this both in law and in Google’s business practices. When private ownership of essential resources and services—water, electricity, telecommunications, and so on—no longer serves the public interest, governments often step in to control them. One particular government intervention is especially relevant to the Big Tech dilemma: the 1956 consent decree in the U.S. in which AT&T agreed to share all its patents with other companies free of charge. As tech investor Roger McNamee and others have pointed out, that sharing reverberated around the world, leading to a significant increase in technological competition and innovation.
Doesn’t Google already share its index with everyone in the world? Yes, but only for single searches. I’m talking about requiring Google to share its entire index with outside entities—businesses, nonprofit organizations, even individuals—through what programmers call an application programming interface, or API.

Google already allows this kind of sharing with a chosen few, most notably a small but ingenious company called Startpage, which is based in the Netherlands. In 2009, Google granted Startpage access to its index in return for fees generated by ads placed near Startpage search results.

With access to Google’s index—the most extensive in the world, by far—Startpage gives you great search results, but with a difference. Google tracks your searches and also monitors you in other ways, so it gives you personalized results. Startpage doesn’t track you—it respects and guarantees your privacy—so it gives you generic results. Some people like customized results; others treasure their privacy. (You might have heard of another privacy-oriented alternative to called DuckDuckGo, which aggregates information obtained from 400 other non-Google sources, including its own modest crawler.)

If entities worldwide were given unlimited access to Google’s index, dozens of Startpage variants would turn up within months; within a year or two, thousands of new search platforms might emerge, each with different strengths and weaknesses....

At the Huffington Post:

Google Critic Killed in “Ironic” Car Accident: Struck by Google Street View Vehicle
By Camille Johnson, San Diego Union-Tribune
San Diego, CA. Prominent research psychologist and author Dr. Robert Epstein, age 60, was killed yesterday afternoon by a Google Street View vehicle while crossing Front Street in San Diego, where he has long resided. Although foul play is not suspected, Epstein’s friends are calling the accident “ironic.”
According to Daryn Thompson, a 30-year friend of Epstein’s who also lives in San Diego, “We all know that Google isn’t evil, so there’s no chance this was deliberate, but it’s troubling and ironic that it just happened to be an outspoken critic of Google who was hit. I’m sure it was just a coincidence, though.”...MORE

Coming up, Al-Qaeda's tips for hiding from drones

Sunday, October 18, 2020

Shipping: "Australia’s coal exports to China may be hit hard amid tensions"

 China gets multiple rewards for halting their imports:
1) The environmental community was oohing and aahing over the Chinese CO2 pledge
2) China gets to punish  Australia for questioning the Covid-19 origin story
3) As seen in the post on other industrial commodities, China may not have as strong a demand as it appeared last quarter.

From Lloyd's List, October 16:

While coal exports from Australia to China could be hit given the souring relations between the two sides, the situation could also present opportunities for the dry bulk market

Should volumes reduce from Australia, China will have to look farther afield for its coal supplies. The US, Russia and South Africa could be options, with higher shipments from Indonesia already emerging

WHILE coal exports from Australia are unlikely to be materially impacted this year from China’s reported ban, volumes in 2021 could be hard hit, according to pricing agency S&P Platts.

It estimates that up to 32m tonnes of thermal coal could be displaced in the first quarter of next year alone.

China could look to Indonesia for some volumes, but since Indonesian coal is of a lower calorific value than Australian coal, supplies from Russia or South Africa may be required, according to the agency’s senior coal analyst Matthew Boyle.

Despite China’s coal import quotas being exhausted at some ports since as early as April, Australia’s coal exports have held up, he said.

“Platts Analytics believes part of any rationale for a potential ban on Australian coal imports by China is not only political, but also due to the year-on-year increase in Australian coal exports to China so far.”

In the first eight months of the year, Australia exported 38.6m tonnes of thermal coal and 31.6m tonnes of metallurgical coal to China, which represents an increase of 4.6m tonnes and 8.5m tonnes, respectively, compared with the same period in 2019....


And from, October 18:

China’s ban on coal could cost Australia $15 billion a year
It’s a huge problem that doesn’t appear to be going away – and it could cost the Australian economy a whopping $15 billion a year. 

In June last year, the people of Sydney woke to the unexpected sight of the Chinese Navy in the harbour. For some, it was a concerning sign that the Morrison government had perhaps allowed Australia to be pulled too far into Beijing’s orbit.

At the time Prime Minister Scott Morrison said the publicly unannounced arrival of the warships had been planned for some time and it was a “reciprocal visit” after Australian naval vessels had visited China.

Now, less than 18 months later, things couldn’t be more different between Canberra and Beijing, with diplomatic and trade relations seemingly continuing to deteriorate with each passing day....


"German Pigs and the Autocrats Who Loved Them"

East Germany was a strange place. What Ulbricht, Honecker and the gang created was just twisted. And may be coming to a country near you. But with fancier tech.

And maybe no pigs. But first, some history that is more interesting than it might appear at first glance.

From the Los Angeles Review of Books:

IN CERTAIN CIRCLES in Germany today, meat is taboo — such is the strength of the vegetarian movement sweeping the country. But pork has long held a special place in German cuisine, and it has also held a special place in the hearts of successive authoritarian regimes in Germany — first Adolf Hitler and his Nazi technocrats, and later Erich Honecker and the Socialist Unity Party that crumbled along with East Germany in 1989. It was a curious country while it lasted, perhaps best remembered today for the Berlin Wall, its all-encompassing state surveillance apparatus, its elite athletes doped to the brim on the state’s dime, and its comically crummy car, the Trabant (Trabi).

Less well known is its leadership’s love affair with industrial pork production — an engaging tale now told in Thomas Fleischman’s Communist Pigs: An Animal History of East Germany’s Rise and Fall.

Blut und Boden (“blood and soil”) was a Nazi motto to evoke Aryan racial ties to German soil. The motto was popularized by Richard Walther Darré, who was minister of Food and Agriculture from 1933 until 1942, and a major proponent of pork. For Darré, the pig was the supreme animal for Germanic people and the gods of ancient Aryans, who, he argued, preferred the swine sacrifice above all. Darré was interested in mapping the bloodlines of different hog breeds and he went on to apply this reasoning to humans, famously advocating for selective breeding to promote a “pure Nordic race” to restore a racially cleansed Germandom.

He also argued that the Aryan connection with the soil was made possible through pig rearing. There could be no true Germans without pigs. And pigs, he argued, are what separated Germans from Jews. The Nazis went on to pursue an intensive pig breeding and farming effort, seeking to rebuild the German swine stock that had been decimated by World War I. Tiago Saraiva’s work Fascist Pigs, which details this story of pigs under the Nazi regime, is the obvious prequel to Fleischman’s book.

Communist Pigs advances the swine history of Germany, taking readers to the era of authoritarian rule in the GDR. Having previously read Saraiva’s book, but not giving much thought to how pork production was handled in the GDR, I was surprised to learn that East Germany so enthusiastically embraced the industrial pig. Surely this must have been coded as “too fascist” for the vociferously antifascist leaders of the new communist country. The new East German leadership did want to distance itself from the Nazi agricultural structures, and the government quickly embarked on a massive farm collectivization campaign after the end of World War II, following the lead of the Soviet Union and other communist states.

But East Germany was not so quick to get rid of the pig. The regime ultimately allowed farmers to keep “garden pigs” in their peri-urban plots, and over time, the wild boar population exploded. Fleischman’s book covers the fate of these pigs, with a primary focus on the industrial pig. And in his telling, we see how dramatically East German leaders shifted the ideological framing of the pig’s place in society, the economy, and in the natural environment.

Whereas the Nazi Blut und Boden ideology promoted a bodenständig (“rooted”) pig that could be reared on the root vegetables suited to German soil, East Germany’s industrial pig relied on commodity-level feed. “It was not bred to support local or regional markets,” Fleischman writes. “Factory conditions put new demands on the animal, which could only be met with unprecedented amounts of grain.” Mass-produced grain was the key to the GDR’s industrial pig production. At first, the country’s agricultural production model was reoriented to make this possible, giving preferential status to large-scale commercial agriculture. But ultimately, there wasn’t enough land to sustain the industrial pigs with so much grain. So leadership eventually started to import grain — not just from Soviet allies, but increasingly from the West. Although the GDR’s investment in industrial agriculture was modeled on American industrial farming, it rapidly became apparent that it could not keep pace:

By the late 1960s, without access to the world of cheap inputs such as grain, labor, and capital, the East German factory farm faltered. It was “rescued” by changes in the 1970s to global capitalism and Erich Honecker’s turn to the West. While the first secretary believed cheap credit and grain would accelerate the transformation of the country into an export land, the shift pulled the country’s pork and pigs into global flows of capital and commodities.

Fleischman goes into great detail about the ramifications of these changes in global political economy for East German pig farming. He shows how the grain trap worked to bind the communist country into capitalist agro-commodity circuits....


Shipping: CMA CGM Hires CEO Of IBM France To Head Up IT

And I have Siva, a streetwise Hindu boy (CalTech post-doc).
No offense Siva

Considering CMA CGM's recent cyber travails M. Sekkaki was busy from day one.

From FreightWaves, October 2:

IBM France CEO Nicolas Sekkaki recruited to accelerate container carrier’s ‘digital and technological ambitions’

CMA CGM announced Friday it has recruited a leader to execute its digitization and technology strategy.

Nicolas Sekkaki has served as the chairman and CEO of IBM France since 2015. The CMA CGM Group has hired him as its executive vice president of IT, digital and transformation.

CMA CGM said in the announcement that Sekkaki was brought on to accelerate the implementation of its “digital and technological ambitions.”

“Digitization is at the heart of the CMA CGM Group’s development strategy: a driver for growth, differentiation and performance,” CMA CGM said. “A number of initiatives have already been taken to give the group’s customers access to the world’s most innovative technologies in the fields of blockchain, artificial intelligence and internet of things....


China May Be Slowing Its Mad Rush To Stockpile Industrial Commodities

Still procuring soybeans though.
We had hypothesized one of three possible reasons for the relentless buying:
1) The central planners really believed they were going to use all the inputs
2) it was a foreign reserve diversification move, out of dollars, into stuff
3) It was in anticipation of a weakening in the yuan.
As to which is correct only time will tell as the CCP certainly isn't.

Two from Reuters:

October 16
UPDATE 1-Iron ore futures log weekly losses on supply outlook, demand concerns
Dalian iron ore down for fourth session
* SGX iron ore rebounds from 4-day slump
* Rio Tinto warns on new virus lockdowns
* Decline in global steel demand seen muted (Updates prices, adds graphic)

China’s iron ore futures extended losses on Friday and posted their first weekly decline in three, pressured by rising portside stockpiles in the world’s top steel producer and dimming global demand recovery prospects for steel products.

The most-traded January 2021 contract for the steelmaking ingredient on China’s Dalian Commodity Exchange closed 0.6% lower at 785.50 yuan ($117.05) a tonne, extending losses into a fourth straight session and falling 4.6% from last week.

Iron ore’s front-month November contract on the Singapore Exchange rose 0.6% to $114.80 a tonne by 0734 GMT, after a four-day slump, but was also heading for a weekly loss....MUCH MORE

And , also October 16:

China has hit the brakes on its oil buying spree as swelling inventories and limited import quotas stifle purchases.

Softening Chinese demand in the final quarter of 2020 comes as renewed lockdowns and a spike in coronavirus cases across Europe and the United States curtail oil consumption, adding more downward pressure on oil prices.

The world’s top crude oil importer has been a critical market for oil producers forced to dump excess supplies at decades-low prices during the height of the COVID-19 pandemic.

“The recovery in China’s demand has been very, very strong, and so if you remove part of that strength, that would have a bearish impact on the (global oil) market,” said Lachlan Shaw, director, head of commodity research, markets at the National Australia Bank (NAB).

China was the only major crude consumer with increased oil demand in the April-September quarters from the year before.

It imported a record 2.108 billion barrels, or 12.8% of total global oil supplies, during that period, according to China customs and International Energy Agency (IEA) data.....


"Lebanon spymaster holds ‘positive’ US talks on hostages and sharing intelligence"

 It looks as though France might not be alone in its efforts to rescue Lebanon before it becomes another Somalia.

And with memories of the ammonium nitrate explosion still fresh, feelings toward Hezbollah—the assumed de facto owner of the stuff that goes boom—are as negative as they have been in years.

From the UAE's The National, October 18:

Over four days, Gen Abbas Ibrahim met officials from the White House, State Department and CIA

Lebanon’s head of General Security, Maj Gen Abbas Ibrahim, hoped to boost intelligence sharing with the US and work on releasing more hostages held in Iran and Syria, he told The National.

Gen Ibrahim was in Washington on a four-day visit to meet officials from the White House, State Department and the CIA.

He leads Lebanon’s most powerful security service after the military and has a reputation as a savvy negotiator who has helped to secure the release of US residents and nationals.

He has also brokered deals with extremists such as ISIS and militant Palestinian factions to end bouts of fighting in Lebanon.

Despite having a close relationship with Hezbollah, Gen Ibrahim received a warm welcome from the Trump administration.

On this visit, he met National Security Adviser Robert O’Brien, CIA director Gina Haspel and undersecretary of state David Hale, although American officials were cagey about the visit.

The meetings reinforce the gradual change in US-Lebanon relations over the last 15 years.

For decades before Syrian withdrawal from Lebanon in 2005, Damascus took the lead in co-ordinating with the US intelligence on matters related to Beirut and on freeing hostages.

But now, Gen Ibrahim is looking to the young but growing relations with the US on sharing intelligence.

“We have a good working relationship with the Americans and I am hopeful,” he said....


Saturday, October 17, 2020

"The Death of the Artist: How Creators Are Struggling to Survive in the Age of Billionaires and Big Tech"

I'm starting to think the 20th century was an aberration in the long history of artist remuneration.
Not saying go back to the patronage system but the current marketplace doesn't seem to be working either.

From the Los Angeles Review of Books, October 13:

EARLY IN HIS new book, The Death of the Artist: How Creators Are Struggling to Survive in the Age of Billionaires and Big Tech, William Deresiewicz relates two stories often told about the arts today. From Silicon Valley and its boosters, we hear: “There’s never been a better time to be an artist.” Anyone can easily market their own music, books, or films online, drum up a thousand true fans, and enjoy a decent living. We see proof of this, time and again, in profiles of bold creators who got tired of waiting to be chosen, took to the web, and saw their work go viral.

The artists tell another tale. Yes, you can produce and post your work more easily, but so can everyone else. Every year, every major venue — SoundCloud, Kindle Store, Sundance — is inundated with thousands if not millions of songs, books, and films, but most sink like a stone. Of the 6,000,000 books in the US Kindle Store, the “overwhelming majority” of which are self-published, “68 percent sell fewer than two copies a month.” Only about 2,000 US Kindle Store authors earn more than $25,000 per year. Spotify features roughly 2,000,000 artists worldwide, but less than four percent of them garner 95 percent of the streams. The pie has been “pulverized into a million tiny crumbs.” We may now have “universal access” to the audience, but “at the price of universal impoverishment.”

Deresiewicz is a literary critic and author of a provocative earlier book on higher education in the United States, Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life. He made his first foray into the debate about the plight of artists in The Atlantic in 2015, but declined at the time to endorse either of the two narratives set out above. In that essay, he framed the debate itself as symptomatic of a deeper shift on the artistic horizon. Creators are becoming unmoored from the institutions that have long made their careers possible, he argued, as publishers, labels, studios, and colleges are now “contracting or disintegrating.” Left to fend for themselves in the marketplace, artists have been forced to practice “creative entrepreneurship,” with less time to spend building an oeuvre or perfecting their technique, and more time to be spent on networking and self-promoting. User reviews and recommendation engines matter more to them than critical opinion. Their work tends to be tamer, safer, more “formulaic” — “more like entertainment, less like art.” More broadly, this new breed of artist is compelled to feel good about all the internet makes possible, and to ignore the fact that few have managed to capitalize on it. In 2015, the future under the new paradigm was not encouraging. But it seemed too soon to pass judgment.

Having gathered copious evidence for the book, Deresiewicz now stands firmly against the model of the creative entrepreneur. Based on some 140 phone interviews with creators across a number of fields, and ample studies and reports, the book urges us to dismiss the Silicon Valley narrative as pure “propaganda.” It is a persuasive and thoroughly engaging read. Deresiewicz is not a pioneer in this terrain — Scott Timberg’s Culture Crash: The Killing of the Creative Class and Jonathan Taplin’s Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy cover much of the same ground. But Deresiewicz takes a closer look at artists’ lives and careers, presenting a bleak composite picture that anyone with creative aspirations must confront. All but the most popular creators, he makes clear, face new and daunting obstacles, pointing to a future in which more artists will do more of their work as part-time amateurs. Final chapters try to brighten the picture somewhat with encouraging words about organizing and advocating for IP reform. But the book leaves unclear the answer to a larger question: is the aspiration to become a full-time writer, filmmaker, or musician — no matter how earnestly held — now essentially obsolete?....


"The first recorded mushroom trip in Britain took place in London’s Green Park on October 3, 1799"

 From Public Domain Review:

Fungi, Folklore, and Fairyland

From fairy-rings to Lewis Carroll's Alice, mushrooms have long been entwined with the supernatural in art and literature. What might this say about past knowledge of hallucinogenic fungi? Mike Jay looks at early reports of mushroom-induced trips and how one species in particular became established as a stock motif of Victorian fairyland.
October 7, 2020

The first recorded mushroom trip in Britain took place in London’s Green Park on October 3, 1799. Like many such experiences before and since, it was accidental. A man identified in the subsequent medical report as “J. S.” was in the habit of gathering small field mushrooms from the park on autumn mornings and cooking them up into a breakfast broth for his wife and young family. But this particular morning, an hour after they had finished it, everything began to turn very strange. J. S. noticed black spots and odd flashes of colour interrupting his vision; he became disorientated and had difficulty in standing and moving around. His family were complaining of stomach cramps and cold, numb extremities. The notion of poisonous toadstools leapt to his mind, and he staggered out into the streets to seek help, but within a hundred yards he had forgotten where he was going, or why, and was found wandering in a confused state.

By chance a physician named Everard Brande was passing through this part of town, and he was summoned to treat J. S. and his family. The scene he witnessed was so unusual that he wrote it up at length and published it in The Medical and Physical Journal a few months later.1 The family’s symptoms were rising and falling in giddy waves, their pupils dilated, their pulses fluttering, and their breathing laboured, periodically returning to normal before accelerating into another crisis. All were fixated on the fear that they were dying except for the youngest, the eight-year-old son named as “Edward S.”, whose symptoms were the strangest of all. He had eaten a large portion of the mushrooms and was “attacked with fits of immoderate laughter” which his parents’ threats could not subdue. He seemed to have been transported into another world, from which he would only return under duress to speak nonsense: “when roused and interrogated as to it, he answered indifferently, yes or no, as he did to every other question, evidently without any relation to what was asked”....

Possibly related:

"Her Royal Highness?... Magic mushrooms at Buckingham Palace"

"COVID-19 and the Collapse of Complex Societies"

 From the hardcore libertarians at Reason magazine (they are also very good at costing out high-speed rail in the U.S., go figure)

April 16, 2020:

Sometimes pressure causes breakdowns, but sometimes it causes breakthroughs.

With the world experiencing the worst pandemic since 1918, many people may wonder if civilization is as secure as it might be. History offers insight into this question. Civilizational breakdown is a recurring historical process. Looking at how it has happened before can help us understand what causes it, the forms it may take, and how far away from it we may be. Civilizational crisis and collapse were given a formal scholarly definition in Joseph Tainter's 1988 book, The Collapse of Complex Societies, and Tainter's model underlies the work of later generations of scholars.

The model works this way. Since at least the advent of agriculture, people have responded to challenges and sought to improve their condition. One form this takes is through social cooperation and the division of labor, an approach that leads to more complex forms of economy, society, and politics. In the abstract, complexity means higher levels of heterogeneity, as opposed to uniformity. In concrete economic terms, it means a more elaborate division of labor, a larger number of distinct occupations, and greater specialization both geographically and among people. Socially, it means a greater number of roles and ways of living, more variety in the stages of life, increased differentiation, and more varied and changeable interpersonal relations. Politically, it means more structured political units, more elaborate administration, and higher levels of urbanization. Complexity in all of these forms brings a positive payoff in terms of more production, higher living standards, more inventiveness, and a more varied and commodious way of living. It therefore pays to move toward more complex ways of doing things and living.

But there are limits to this approach. Complexity has diminishing marginal returns: The gains from complexity become less as it increases, while the costs (such as information problems, ineffectuality, and difficulty in changing course) become greater. Eventually, increased complexity has negative returns. Moreover, as social, economic, and political orders become more complex they also become more fragile and brittle, less resilient and adaptable. They become less able to cope with unexpected shocks (or even shocks that are anticipated). As the system becomes more complex and interdependent—in ways that the people who are part of it do not fully understand—it becomes susceptible to a general breakdown caused by cascade effects. These happen when a failure in one part of the system leads to unforeseeable failures in other parts. These failures may have no obvious connection to the original problem, which in turn leads to further breakdowns elsewhere.

Underlying all of this for most (or all?) of history is the fundamental reality of limited resources. These impose constraints on the level of complexity that a given type of economic and social organization can support. These limits usually lurk in the background, but as the population, level of human activity, and complexity reach such constraints, they start to pinch in many ways. It is that pressure that brings the collapse of a complex order. For Tainter and his successors, the process is actually one of simplification, the breakdown and decomposition of complex forms of organization into simpler and less diverse ones. This has many aspects, including a decline in population and urbanization; a move from large polities to smaller, more local ones; and a decay of elaborate trade systems and divisions of labor. Sometimes the process is arrested or even reversed, and sometimes it continues until a new, simpler equilibrium is reached....


If interested see also:

"The Philosophy of Complexity: Are Complex Systems Inherently Tyrannical?"

In the end the universe itself is inherently tyrannical.
You are not the boss.
"The Limits to Racketeering"
It Wasn't 'Ecocide': What Happend On Easter Island
"The Hittites Lived in Interesting Times"
You never know when the flight attendant is going to get on the speaker and ask "Does anyone onboard know anything about the Hittites?"
And should that time come, you will be ready.
"Lessons From The Last Time Civilization Collapsed"

"The Greatest Negotiator In History"

From the tiny treasure that is Delancey Place, October 2019:

Today's selection -- from The Prize by Daniel Yergin.
Calouste Gulbenkian was the greatest negotiator in history, known for his "granite obduracy," and it made him one of the world's wealthiest men.

In 1912, he was the force behind the creation of the Turkish Petroleum Company (TPC)—a consortium of the largest European oil companies aimed at cooperatively procuring oil exploration and development rights in the Ottoman territory of Mesopotamia, and reserved a significant portion for himself.

During the dismantling of the Ottoman Empire after the war, heated and prolonged negotiations ensued regarding which companies could invest in the Turkish Petroleum Company. The TPC was granted exclusive oil exploration rights to Mesopotamia in 1925. The discovery of a large oil reserve at Baba Gurgur provided the impetus to conclude negotiations and in July 1928 an agreement, called the "Red Line Agreement", was signed which determined which oil companies could invest in TPC and reserved 5% of the shares for Gulbenkian. The name of the company was changed to the Iraq Petroleum Company in 1929. He became known as 'Mr. 5 Percent.' As oil became critical resource for war and commerce, he became incredibly wealthy:

"Gulbenkian, as usual, was another matter [in the negotiations]. Installed in a first-floor suite in Lisbon's venerable Hotel Aviz, Gulbenkian kept to his flint-nosed habits. Be­cause it was cheaper, he no longer maintained a car and chauffeur, but hired a driver to take him into the country for his daily walk, carefully checking the odometer on the car to make sure he was not being charged for someone else's trips. 'Gulbenkian may be regarded as a man of his word once this has been given,' observed a British official. 'The difficulty lies in obtaining it. The ability to compromise is not one of his attributes.' The official could not help adding that 'Gulbenkian's idea of his own financial integrity takes on a peculiar form when it comes to taxation, the avoidance of which constitutes one of his major activities.' He escaped income taxes in France and Portugal by maintaining an appointment with the Iranian legation. In order to avoid property tax on his man­sion in Paris, he turned a small part of it into a picture gallery. And when he sold the Ritz Hotel in Paris, he insisted on terms that provided that a suite be perma­nently reserved for him, so that he could always claim that he was 'in transit' while in Paris -- thus further avoiding French taxation.

"Gulbenkian brought this same infuriating attention to detail, along with his reluctance to compromise and his intense powers of concentration, to the strug­gle over the Red Line Agreement. Though the French had dropped their suit, Gulbenkian was willing to wash every last piece of dirty linen in public if neces­sary. He filed suit in a British court. [Corporate participants] Jersey and Socony responded with counter­suits....MORE (the nub of the matter)

"Mechanical Elephant: The cult of Rolls-Royce in India"

If you are going to join a cult this looks like one to consider.

 From Road & Track:

When flamboyance met bespoke luxury, the amazing happened.;center,top&resize=768:*

Dawn breaks in Hyderabad, and workers head out to collect the city's garbage in a fleet of Rolls-Royce sedans. 900 miles away in Jamnagar, a Phantom II, painted pink to match its owner's favorite slippers, coasts along the beach. There's a 20/30 Sedanca de Ville floating through the streets of Travancore, too, and it's got a miniature stool molded into its floor so that a "dwarf" can massage the passenger's legs.

Welcome to prewar India, where aristocrats engage in a lavish game of one-upmanship using the Rolls-Royce cars as fodder.

At the turn of the 20th century, India was under colonial British rule and divided into several hundred city-states, many led by native royal patriarchs called Maharajas. These men were rich, powerful, and obsessed with the pageantry of luxury. But in a time when automobiles were less reliable than weather reports, the most exclusive cars were ones that didn't break down.

Keen on cracking into the Indian market, a suave British businessman named Frank Norbury schemed a dramatic demonstration of engineering prowess in 1907 using his Rolls-Royce 40/50 hp: He threw out the Silver Ghost's toolkit, locked its hood shut, and drove 620 miles through Ghat mountain passes from Bombay to Kolhapur. The Maharaja of Gwalior was smitten; he had to own that motorcar....;center,top&resize=768:*


 And more next week.

"The Curse of Game Theory: Why It’s in Your Self-Interest to Exit the Rules of the Game"

Just a heads-up, I don't know these folks or know what their agenda is. But the essay is interesting.

From the Rising Tide Foundation:

Game theory, the mathematical theory of games of strategy, was developed by John von Neumann in several successive stages in 1928 and 1940-41, according to his book “Theory of Games and Economic Behaviour” which he co-authored with Oskar Morgenstern.

The crux of the theory is that an individuals’ behaviour will always be motivated towards achieving an optimal outcome, which is determined by self-interest. An assumption made is that the players in such a game are rational, which translates to, “will strive to maximize their payoffs in the game”. In other words, it is assumed they are motivated by selfish self-interests.

Over the years, other contributors such as John Nash (Nash equilibrium) and John Maynard Smith (evolutionary stable strategy) have added to the theory and we are now at a point where it is considered by many to be an essential tool when modelling economic, political, sociological or military behaviours and outcomes, and is taught as such in many prestigious universities as something pretty much set in stone.

But what if we have made a terrible mistake?

After all, it is acknowledged by the theorists themselves that the entire functioning of their model relies upon the assumption that we are governed by rational selfish behaviour, and that they feel confident about this assumption since reality has apparently confirmed this fact to them. But what if this game is not objectively mirroring a truthful depiction of us? What if this game has rather, been used as a conditioning tool, a self-fulfilling prophecy, a positive feedback loop?

How can we know what is true? How can we know what kind of a person we truly are and not what we have been conditioned to think of ourselves as?

Theory of Games and Economic Behaviour

Before we can answer such a question, we need to look at the forms of simplification and assumptions that were used by von Neumann when formulating the philosophy to the game theory model. This may be counter-intuitive to some, but the “philosophy” or “hypothesis” must always precede the actual model. The variables you choose to use, the variables you discount for, how you define the variables, how you define the relationship between the variables are not being defined by the model, but rather the creator of the model. Once the model is created it can now, theoretically, add to that beginning structure and mimic a simplified version of reality.

However, we should keep in mind that a model that has been created on a false hypothesis could still “function,” if the variables are not too much in contradiction to the other variables’ operations. Such a model is not “aware” that it is not a representation of “reality,” and cannot indicate so to its creator. Thus, a model can be a representation of a simplified reality or it can represent a completely artificial reality.

At the beginning of von Neumann’s book, he goes through several disclaimers which are highly problematic towards the relevance of his theory, one of them being the acknowledgement that “there exists, at present, no satisfactory treatment of the question of rational behavior. There may, for example, exist several ways by which to reach the optimum position; they may depend upon the knowledge and understanding which the individual has and upon the paths of action open to them, because they imply, as must be evident, quantitative relationships.”

As becomes rapidly evident, von Neumann makes endless assertions such as these, as if they were obvious and thus need not be examined at all. The assumption that an under-defined “rational” selfish behaviour is merely quantifiable and nothing more, and does not account for qualitative change (a mathematician’s worst nightmare), is taking great liberty in over-simplifying human behaviour to conveniently fit the limited parameters of his model. In other words, it is cheating. You are manipulating the definitions and interactions of your variables to fit an artificial reality of your model.

Let me give you an example.

In Euclid’s fifth postulate, it is considered a “rule” that two parallel lines will never intersect. Euclid was alive around the time of the mid-4th century BCE, before Eratosthenes (276-194 BCE) made his beautifully elegant discovery that the Earth was indeed curved and also made a pretty accurate first measurement of the size of Earth.

That is, Euclid assumed a linear geometric space upon which the real universe was expected to “fit”. While it is true that two parallel lines will never meet on a two-dimensional plane, they can meet on a three-dimensional plane.

As is now understood, line A and line G, can be measured as 90 degrees from the equator line and thus are parallel lines, and yet they can eventually interface with each other if the surface is curved [see image].

The problem with assumptions such Euclid’s is that they are ultimately only true in an artificial situation and are not reflective of how such things will interact in reality. Also, there is no way to predict from Euclid’s fifth law, how two parallel lines would interact in a three dimensional space, let alone in n dimensional space as described by the physicist Bernard Riemann.

Ironically, in his book, von Neumann likens his “pioneering” work in the field of game theory to that of what physicists have been doing for centuries, that is, mathematical formulations that represent, albeit simplified, the “laws of nature,” concerning matter and energy. However, von Neumann again showcases that he has no comprehension as to what constitutes the foundation for such “laws of nature.”

In his Hypotheses that Lie at the Foundation of Geometry and other works, Riemann rigorously developed the notion of an anti-Euclidean physical space time shaped not by linear dimensions of an “x,y,z grid”, but rather dimensions defined by an ever growing array of discovered physical principles such as magnetism, light, heat, gravity, sound, etc.- each organizing principle being ironically characterized by both a finiteness and unboundedness with quantized least-action pathways discoverable therein.

According to Euclid’s logic, you never “see” two parallel lines intersecting and thus it is unfathomable that they ever could intersect. His “rule” was based off of shared assumptions of what we “think” we are observing in such phenomena, however, this is not necessarily reality and it certainly does not translate to a “rule” that governs all.

By von Neumann acknowledging that he himself is heavily relying on his so-called “self-evident” truths in simplifying human behaviour, he is asserting an outcome, he is not proving the outcome’s natural occurrence. 

The Robinson Crusoe example in Monetarist Economic Theory

According to von Neumann, the Robinson Crusoe example was used by the Austrian economic school to model an individual’s behaviour towards maximizing pay-off in an environment (in this case an island) where the resources available to you are set and limited....


Real Estate: Mock Castle With Backstory Comes On The Market

We are not fans of mock castles.*
Mockery on the other hand....
From The Steeple Times:
Mocking The Dockers 
Welsh ‘mock castle’ once occupied by notorious spendaholic Lady Docker for sale for £2.85m; the Dockers were turfed out in 1956 after it was discovered they’d lavished the equivalent of £1.3m today of company money on the place without permission
  • Alleged inspiration for ‘The Pink Panther’ film, Norah Docker (AKA ‘Naughty Norah’ and ‘Lady Muck’) described herself as “an artificial blonde, among thousands of artificial blondes searching for stardom.”
  • Of her second husband, Sir William Collins, chairman of Fortnum & Mason, she announced: “He was 69, I married him for his money.”
  • Lady Docker used her third husband Sir Bernard Docker’s company money to create Daimler cars upholstered in zebra hide – “because mink is too hot to sit on.”
  • The couple also plundered the company to buy Glandyfi Castle in Wales and spent an equivalent of £1.3 million of today’s money on it.
  • The Grade II listed, early 19th century ‘mock castle’ became a small hotel and is currently for sale for £2.85 million.

The best known ‘occupants’ of Glandyfi Castle, an early 19th century ‘mock castle’ eleven miles from Aberystwyth in Mid Wales, were Birmingham Small Arms Company (BSA) managing director and Daimler chairman Sir Bernard Docker and his notoriously decadent wife, ‘Naughty Norah.’ 

The Dockers, a “spendaholic” pair said to be the inspiration for the 1963  film The Pink Panther, lavished the equivalent of £1.3 million of today’s money buying and altering the castle in 1949 – the very same year they were robbed of £1.9 million of diamonds in today’s money at their Mayfair home also....


Despite the crenelated battlements, and although the central keep looks real enough, the windows set into what should be curtainwall give away the fact that this is less castle and more comfy house.
This is what happens when upstarts like the Cavendish clan get their hands on stuff.  
(just kidding Your Grace)

"Bot developed using OpenAI GPT-3 poses as human on Reddit, reportedly fools users"

Whatever happened to Microsoft's Tay? and Alice?

From International Business Times, October 13:

Under the username "thegentlemetre" the AI bot reportedly posed as a human user and posted messages on various subjects.

Elon Musk has been known to take to social media to criticise certain developments related to tech and artificial intelligence. In fact, last month, he voiced out his displeasure after news broke out that Microsoft was granted an exclusive license to OpenAI's GPT-3 language model, which could potentially usher in advancements that could change how humans interact with computers. A demonstration of its capabilities was recently revealed when Reddit users interacted with a bot for more than a week without raising suspicion.

Under the username "thegentlemetre" the AI bot reportedly posed as a human user and posted messages on various subjects. It frequented the Q&A forums AskScience and AskReddit as noted by the  Independent. Moreover, it was revealed that some of the posts it made even received numerous upvotes from other users. This apparently continued without any issues until someone noticed a certain pattern which did not seem possible for any regular individual to manage.

Based on the frequency and length of the messages posted by the bot, Philip Winston, a software engineer by trade, scrutinised the activities of the user in question. He supposedly asked: "How does this user post so many large, deep posts so rapidly?" After a more detailed investigation, he narrowed down the likelihood of "thegentlemetre" being a GPT-3 language model sourced from OpenAI, which Musk co-founded in 2015 with Sam Altman and other investors such as Microsoft, Peter Thiel, and others....


HT: FT Alphaville's Further Reading post


 And Tay? We hardly knew her. But we knew her well. 

Artificial Intelligence: Here's Why Microsoft's Teen Chatbot Turned into a Genocidal Racist, According to an AI Expert

Microsoft's Chatbot,Tay, Returns: Smokes the Ganja, Has Twitter Meltdown, Goes Silent Again 

And then there was the Yandex venture, Alice:  

Russian Chatbot Goes Off The Rails, Endorses Stalin, Says "Enemies of the people must be shot" etc

Friday, October 16, 2020

How Accurate Are Prediction Markets?

From JSTOR Daily, July 22:

Will I get COVID-19? Will I have a job in three months’ time? Will the shops have what I need? Research indicates that markets might not know best.

By the time you finish this story, you’ll have predicted the future dozens of times. You’ve already guessed from the headline what it’s about and whether you’ll enjoy it. These opening words help you judge whether the rest is worth bothering with. And if you expect it will mention the oracle of Delphi, Nancy Reagan’s astrologer, and chimpanzees playing darts, you’ve already got three things right.

We are all forecasters. We all want to know what is going to happen next. Will I get COVID-19? Will I have a job in three months’ time? Will the shops have what I need? Will I have time to finish my project? Will Donald Trump be re-elected President of the United States?

Yet although we regularly predict the outcomes of questions like these, we are often not very good at doing so....


If interested here is a search of the blog for the keyword: forecasting. There are a lot of posts.

"Is Palantir’s Crystal Ball Just Smoke and Mirrors?"

One of my favorite examples of investing in black boxes and the pitfalls therein is a little vignette I imagined while reading last year's "Lenders Raise Collateral Concerns Over WeWork CEO's $500 Million Personal Credit Line" (JPM; UBS)":

Ya think?

"Bob, we've been lending against the Emperor's personal wardrobe and it turns out there's actually nothing in the closet"
Sure, Climateer Investing took "WeWork: 'Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.'" at face value:
Roger that, energy and spirituality. Over.... 
But we didn't lend a half-billion against it for Chrissakes  
Or more recently, Izabella d'Alphaville's piece on Cambridge Analytica.

And possibly the headline query, from New York Magazine September 27:

Back in 2003, John Poindexter got a call from Richard Perle, an old friend from their days serving together in the Reagan administration. Perle, one of the architects of the Iraq War, which started that year, wanted to introduce Poindexter to a couple of Silicon Valley entrepreneurs who were starting a software company. The firm, Palantir Technologies, was hoping to pull together data collected by a wide range of spy agencies — everything from human intelligence and cell-phone calls to travel records and financial transactions — to help identify and stop terrorists planning attacks on the United States.

Poindexter, a retired rear admiral who had been forced to resign as Reagan’s national-security adviser over his role in the Iran-Contra scandal, wasn’t exactly the kind of starry-eyed idealist who usually appeals to Silicon Valley visionaries. Returning to the Pentagon after the 9/11 attacks, he had begun researching ways to develop a data-mining program that was as spooky as its name: Total Information Awareness. His work — dubbed a “super-snoop’s dream” by conservative columnist William Safire — was a precursor to the National Security Agency’s sweeping surveillance programs that were exposed a decade later by Edward Snowden.

Yet Poindexter was precisely the person Peter Thiel and Alex Karp, the co-founders of Palantir, wanted to meet. Their new company was similar in ambition to what Poindexter had tried to create at the Pentagon, and they wanted to pick the brain of the man now widely viewed as the godfather of modern surveillance.

“When I talked to Peter Thiel early on, I was impressed with the design and the ideas they had for the user interface,” Poindexter told me recently. “But I could see they didn’t have — well, as you call it, the back end, to automatically sort through the data and eliminate that tedious task for the users. And my feedback from the people who used it at the time, they were not happy with it at all. It was just much too manual.”

Smoking his pipe, just as he had when he testified to Congress 33 years ago about his role in facilitating covert arms sales to Iran, Poindexter told me he had suggested to Karp and Thiel that they partner with one of the companies that worked on Total Information Awareness. But the two men weren’t interested. “They were a bunch of young, arrogant guys,” Poindexter said, “and they were convinced they could do it all.”

Seventeen years later, Palantir is seeking to cash in on its ability to “do it all.” Over the years, the company has worked with some of the government’s most secretive agencies, including the CIA, the NSA, and the Pentagon’s Special Operations Command. As recently as two years ago, its value was estimated at $20 billion, elevating it to the loftiest heights of the tech “unicorns,” privately held companies valued at more than $1 billion. On September 30, Palantir is scheduled to go public, selling shares in a highly anticipated gambit that could make Karp one of Silicon Valley’s richest CEOs and cement the reputation of Thiel, the first outside investor in Facebook and a co-founder of PayPal, as one of the most visionary tech entrepreneurs of his generation.

Palantir’s public offering is founded on the company’s sales pitch that its software represents the ultimate tool of surveillance. Named after the “Seeing Stones” in The Lord of the Rings, Palantir is designed to ingest the mountains of data collected by soldiers and spies and police — fingerprints, signals intelligence, bank records, tips from confidential informants — and enable users to spot hidden relationships, uncover criminal and terrorist networks, and even anticipate future attacks. Thiel and Karp have effectively positioned Palantir as a pro-military arm of Silicon Valley, a culture dominated by tech gurus who view their work as paving the way for a global utopia. (Palantir declined to comment for this story, citing the mandatory “quiet period” prior to a public listing.)

It’s a strange moment, given the widespread alarm over the ever-expanding reach of technology, for a tech company to be marketing itself as the most powerful weapon in the national-security state’s arsenal — wrapping itself in what one Silicon Valley veteran calls “the mystique of being used to kill people.” But as Palantir seeks to sell its stock on Wall Street, even some of its initial admirers are warning that the company’s software may not live up to its hype. More than a dozen former military and intelligence officials I interviewed — some of whom were instrumental in persuading government agencies to work with Palantir — expressed concerns about the firm’s penchant for exaggeration, its apparent flouting of federal rules designed to ensure fair competition, and its true worth. The company has largely succeeded, they say, not because of its technological wizardry but because its interface is slicker and more user friendly than the alternatives created by defense contractors.

“Where you get into trouble is when the software gets so complicated that you have to send people in to manage it,” said one former CIA official who is complimentary of Palantir. “The moment you introduce an expensive IT engineer into the process, you’ve cut your profits.” Palantir, it turns out, has run headlong into the problem plaguing many tech firms engaged in the quest for total information awareness: Real-world data is often too messy and complex for computers to translate without lots of help from humans.

One of the central claims made about Palantir — its creation myth, in essence — is that its software was somehow instrumental in locating Osama bin Laden. The company, which has posted a news story repeating the rumor on its website, likes to shroud its supposed involvement in an air of mystery. “That’s one of those stories we’re not allowed to comment about,” Karp once said in an interview.

The only known basis for the claim, which has been repeated in dozens of articles, comes from The Finish, Mark Bowden’s book on the 2011 raid that killed bin Laden. Bowden does not actually say Palantir was used in the raid, but he credits the company with perfecting the data collection and analysis that Poindexter had initiated with Total Information Awareness in the aftermath of 9/11. Palantir, Bowden writes, “came up with a program that elegantly accomplished what TIA had set out to do.”

No one I spoke with in either national security or intelligence believes Palantir played any significant role in finding bin Laden. Thiel, according to Poindexter, wasn’t even interested in building on TIA’s work. “His people were telling him they didn’t need it,” Poindexter recalled.

From the start, Palantir has drawn on a circle of loyal insiders to build the company. In the late 1980s, as an undergraduate at Stanford, Thiel founded a conservative student publication called The Stanford Review to wage war on what he saw as the university’s liberal agenda, including “mandatory race and ethnic studies” and “ ‘domestic partner’ status for homosexuals.” (Thiel, who is gay, married his longtime partner in 2017.) The Review served as a breeding ground for Palantir: Over the years, according to an analysis by a Stanford graduate named Andrew Granato, 24 of the company’s employees came from the staff of Thiel’s student publication.

Palantir’s initial technology was likewise adopted from one of Thiel’s other endeavors: PayPal. In 2000, engineers at the online-payment company wanted to use software to help identify fraudulent transactions, but they found that computer algorithms alone couldn’t keep up with how quickly criminals adapted. Their solution was a program called Igor, after a Russian criminal who was taunting PayPal’s fraud department, that flagged suspicious transactions for humans to review.

In 2003, after PayPal was sold, Thiel approached Alex Karp, a former Stanford classmate with a Ph.D. in neoclassical social theory, with a novel idea: Why not apply Igor to track terrorist networks through their financial transactions? At the time, the CIA unit responsible for locating bin Laden had little experience, or even interest, in such an approach. Thiel put in the seed money, and after a few years of pitching investors, Palantir got its first major breakthrough in the national-security world with an estimated $2 million investment from In-Q-Tel, a venture-capital firm set up by the CIA. According to a former intelligence official who was directly involved with that investment, the agency hoped that tapping the tech expertise of Silicon Valley would enable it to integrate widely disparate sources of data regardless of format. “I have mixed feelings about the CIA,” Richard Perle told me, “but their angel investment in Palantir may have been their most inspired move.”

In-Q-Tel’s investment provided Palantir with something even more important than cash: the imprimatur of the CIA. As doors started to open in Washington, Palantir began to attract fans in the secretive communities of intelligence and national security. One former senior intelligence official recalled visiting the company in Menlo Park, California, around 2005. Palantir didn’t even have its own space — it was working out of the offices of a venture capitalist involved in the firm. “We go out back to the carriage house, and there were sleeping bags under the desks,” the former official recalled. “That’s where the engineers who were doing the code were actually living and sleeping.”

But contracts with spy agencies were never going to provide Palantir with enough scale to satisfy investors. The company needed new customers, especially in the lucrative world of defense contracting, and Thiel knew just how to get them. In Zero to One, his 2014 book on entrepreneurship, Thiel notes a critical move in PayPal’s success: In the early days, the company essentially paid people to sign up, handing out $10 to each new customer.

Under federal rules for procurement, which are laid out in a telephone-book-size manual, you can’t pay Pentagon officials to buy your product because that would constitute bribery. And it makes no sense to entice individual soldiers to use your product, because they don’t have the power to make procurement decisions. But that, remarkably, is exactly what Palantir did.

Not long after In-Q-Tel’s investment, the company began providing software and training to members of the armed forces about to deploy to Iraq and Afghanistan. Rather than focusing on lobbying the Pentagon from the outside, Palantir introduced its product from inside the military, creating both an internal demand and a network of pretrained users. “They would basically contact the soldiers and say, ‘Hey, I would like to give you some training on this tool you will get in theater. Would you like to get trained on it?’ ” recalled Heidi Shyu, then the Army’s chief weapons buyer.

Chris Ieva, a Marine infantry officer who was attending the Naval Postgraduate School in 2006, was an early beneficiary of Palantir’s unorthodox marketing technique. The school is located in Monterey, California, just down the road from Silicon Valley, and Palantir had already established a foothold at the institution. Ieva was excited when he was invited to visit the tech start-up, where he saw engineers walking around with T-shirts that read GOOGLE IS OUR BACKUP JOB.

But Palantir wasn’t trying to recruit Ieva as an employee. Instead, he said, he got funding worth about $10,000 to support his graduate work, which paid for a high-end computer and access to critical data. Ieva was also supplied with Palantir’s software, which the school was leasing for $19,000 a year; the company provided an analyst at its own expense to work with students. “In return,” Ieva told me, “I had to publish a thesis, and the findings would sort of go back to them.” By the time he deployed to Afghanistan in 2011, Ieva was a true believer in Palantir. He was not only trained to use the company’s software but given a personal version to take with him....