Tuesday, July 31, 2018

"Deep Fakes: A Looming Challenge for Privacy, Democracy, and National Security"

Via the Social Science Research Network:
59 Pages Posted: 21 Jul 2018  
Robert ChesneyUniversity of Texas School of La
Danielle Keats Citron
University of Maryland Francis King Carey School of Law; Yale University - Yale Information Society Project; Stanford Law School Center for Internet and Society
 Date Written: July 14, 2018
Harmful lies are nothing new. But the ability to distort reality has taken an exponential leap forward with “deep fake” technology. This capability makes it possible to create audio and video of real people saying and doing things they never said or did. Machine learning techniques are escalating the technology’s sophistication, making deep fakes ever more realistic and increasingly resistant to detection. Deep-fake technology has characteristics that enable rapid and widespread diffusion, putting it into the hands of both sophisticated and unsophisticated actors.

While deep-fake technology will bring with it certain benefits, it also will introduce many harms. The marketplace of ideas already suffers from truth decay as our networked information environment interacts in toxic ways with our cognitive biases. Deep fakes will exacerbate this problem significantly. Individuals and businesses will face novel forms of exploitation, intimidation, and personal sabotage. The risks to our democracy and to national security are profound as well.

Our aim is to provide the first in-depth assessment of the causes and consequences of this disruptive technological change, and to explore the existing and potential tools for responding to it. We survey a broad array of responses, including: the role of technological solutions; criminal penalties, civil liability, and regulatory action; military and covert-action responses; economic sanctions; and market developments. We cover the waterfront from immunities to immutable authentication trails, offering recommendations to improve law and policy and anticipating the pitfalls embedded in various solutions.
SSRN download page


AI: "Experts Bet on First Deepfakes Political Scandal"
"Talk down to Siri like she's a mere servant – your safety demands it"
"The US military is funding an effort to catch deepfakes and other AI trickery"
But, but...I saw it on the internet.... 

Surveillance Capitalism: "Out of the frying pan and into the fire"

We know of Professor Mazzucato (UCL) by way of the FT and FT Alphaville, links below.

From Aral Balkan, July 30:
Mariana Mazzucato1 has an article in MIT Technology Review titled Let’s make private data into a public good.
Let’s not.
While Mariana’s criticisms of surveillance capitalism are spot on, her proposed remedy is as far from the mark as it possibly could be.

Yes, surveillance capitalism is bad
Mariana starts off by making the case, and rightly so, that surveillance capitalists2 like Google or Facebook “are making huge profits from technologies originally created with taxpayer money.”
Google’s algorithm was developed with funding from the National Science Foundation, and the internet came from DARPA funding. The same is true for touch-screen displays, GPS, and Siri. From this the tech giants have created de facto monopolies while evading the type of regulation that would rein in monopolies in any other industry. And their business model is built on taking advantage of the habits and private information of the taxpayers who funded the technologies in the first place.
There’s nothing to argue with here. It’s a succinct summary of the tragedy of the commons that lies at the heart of surveillance capitalism and, indeed, that of neoliberalism itself.
Mariana also accurately describes the business model of these companies, albeit without focusing on the actual mechanism by which the data is gathered to begin with3:
Facebook’s and Google’s business models are built on the commodification of personal data, transforming our friendships, interests, beliefs, and preferences into sellable propositions. … The so-called sharing economy is based on the same idea.
So far, so good.
But then, things quickly take a very wrong turn:
There is indeed no reason why the public’s data should not be owned by a public repository that sells the data to the tech giants, rather than vice versa.
There is every reason why we shouldn’t do this.
Mariana’s analysis is fundamentally flawed in two respects: First, it ignores a core injustice in surveillance capitalism – violation of privacy – that her proposed recommendation would have the effect of normalising. Second, it perpetuates a fundamental false dichotomy ­– that there is no other way to design technology than the way Silicon Valley and surveillance capitalists design technology – which then means that there is no mention of the true alternatives: free and open, decentralised, interoperable ethical technologies.

No, we must not normalise violation of privacy
The core injustice that Mariana’s piece ignores is that the business model of surveillance capitalists like Google and Facebook is based on the violation of a fundamental human right. When she says “let’s not forget that a large part of the technology and necessary data was created by all of us” it sounds like we voluntarily got together to create a dataset for the common good by revealing the most intimate details of our lives through having our behaviour tracked and aggregated. In truth, we did no such thing.

We were farmed.

We might have resigned ourselves to being farmed by the likes of Google and Facebook because we have no other choice but that’s not a healthy definition of consent by any standard. If 99.99999% of all investment goes into funding surveillance-based technology (and it does), then people have neither a true choice nor can they be expected to give any meaningful consent to being tracked and profiled. Surveillance capitalism is the norm today. It is mainstream technology. It’s what we funded and what we built.

It is also fundamentally unjust.

There is a very important reason why the public’s data should not be owned by a public repository that sells the data to the tech giants because it’s not the public’s data, it is personal data and it should never have been collected by a third party to begin with. You might hear the same argument from people who say that we must nationalise Google or Facebook.

No, no, no, no, no, no, no! The answer to the violation of personhood by corporations isn’t violation of personhood by government, it’s not violating personhood to begin with.
That’s not to say that we cannot have a data commons. In fact, we must. But we must learn to make a core distinction between data about people and data about the world around us.

Data about people ≠ data about rocks
Our fundamental error when talking about data is that we use a single term when referring to both information about people as well as information about things....MUCH MORE
Here she is at Camp Alphaville in 2014 (moderator: FTAV's Dan McCrum):

And, August 14, 2015:
Lunch with the FT: Mariana Mazzucato
The first time I saw Mariana Mazzucato in action was when she intellectually eviscerated a guileless American venture capitalist at an economic conference in Italy. Anyone who has read Mazzucato’s book The Entrepreneurial State — or even glanced at her website — could have probably guessed it would be a bad idea to argue within her earshot that Silicon Valley’s success was due solely to brilliant entrepreneurs doing whizzy things.

But the venture capitalist was sloppy on his due diligence and was whacked by a formidable Mazzucato, brandishing a mass of data, sharply honed arguments — and a lot of attitude. In its way it was electrifying, especially if, as I do, you appreciate intellectual blood sports.

As professor in the Economics of Innovation at Sussex University, Mazzucato is much in demand on the international lecture circuit for her iconoclastic views about how wealth is generated and the public sector’s vital role in promoting innovation. She is as forthright in her opinions as she is eloquent in expressing them.

She chooses to meet at the Gilbert Scott restaurant in the renovated St Pancras hotel, right by the Eurostar rail terminal, close to her London home, and symbolic of her life of travel. It is a high-ceilinged affair, boasting massive iron light fittings, red banquettes, and grand paintings on its white walls. I arrive early and eavesdrop on a group of four businessmen talking about their favourite James Bond films. A few minutes later, Mazzucato strides towards our table, a tall, striking woman in a sharp blue trouser suit and purple top.....MUCH MORE
And many more.

Move Over Facebook: Tencent's $143 Billion Rout Is World's Biggest as Tech Sinks

From Bloomberg:
Updated on
If you thought the slump in U.S. technology stocks was bad, take a look at Tencent Holdings Ltd.

The Chinese Internet giant has tumbled 25 percent from its January peak, erasing about $143 billion of market value. That’s the biggest wipeout of shareholder wealth worldwide, as measured from the date of each stock’s 52-week high. Facebook Inc., the F in the FANG block of mega-cap U.S. tech shares, is the second-biggest loser with a $136 billion slump over the past three trading sessions.

Investors around the world are beginning to question whether the best days are over for technology stocks -- the leaders of a nine-year boom in global equities. Tencent, Asia’s second-largest company after e-commerce behemoth Alibaba Group Holding Ltd., has also been dogged by concern that growth in its mobile-gaming unit is slowing. The stock, down 3.3 percent on Tuesday and 9.8 percent in July, capped its biggest monthly retreat since 2014....MORE

"Playing For A Potential Yield Curve Inversion"

Also trying to ascertain the timing for a very high leverage, highly concentrated short-term equity long. Not yet but maybe more later today.

Here's the curve from The Integrating Investor:
If you’ve consumed any financial media lately, you’re likely well aware that the yield curve has been flattening. Since roughly 2014, the yield differential between the 10 year U.S. Treasury bond and any number of short-maturity ones has been compressing (the 2 year is most commonly used). Why this has much of the investment community in a tizzy is due to the measure’s reliability as a recession predictor. But given all of this press and – most importantly – the lack of a causal link, should we Integrating Investors take note and make preparations for a Keynesian Beauty Contest; or does the immense scrutiny make it subject to Goodhart’s Law and hence the entire spectacle may be ignored?

Investing is a funny business where expectations and sentiment can trump reality, at least over the short term; and let’s face it, the short term is actually what constitutes even the most patient of all professional investors’ timeframes. Economic and market cycles oscillate over the course of years, so trying to precisely pin down price movements in any given 3-12 month period is difficult to say the least. Thus, a large part of these day-to-day investment gains (in general) can result from trading range noise rather than reflect fundamental price movement.

Dr. Ben Hunt over at Epsilon Theory characterizes the way in which most of us invest as “playing the player.” Stealing an analogy from poker, Dr. Hunt contends that what most investors are engaged in is a giant, zero-sum game whereby each is trying to outmaneuver opponents (i.e. other market participants) as much as they are playing their best hand (my apologies to Dr. Hunt for butchering his eloquent analogy). Now over the long run investing is most certainly not zero-sum activity, but in the competitive field of professional money management where one is ranked versus his/her peers, it certainly can be.

Dr. Hunt is not the first to take note of this behavior. The infamous John Maynard Keynes described such a phenomenon using a beauty contest analogy. In Chapter 12 of his seminal work, The General Theory of Employment, Interest and Money, Keynes wrote:
“… professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not a case of choosing those which, to the best of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be.”
And so was birthed the concept of the Keynesian Beauty Contest (though I find “playing the player” to have a nicer ring to it). While approaching investing as a poker game or gimmicky beauty contest may seem “low brow” for the “Harvard types”, it is precisely this mispricing of future expectations that lubricates “buy low, sell high” activities....MUCH MORE

No, Wait: THIS Is the Amazon everyone should have feared (AMZN)

From Bloomberg, July 30:

Did Bezos Just Tease Amazon Plan for Alexa-on-Wheels Home Robot?
Did Jeff Bezos’s kids really use blue painters’ tape to attach an Amazon.com Inc. Echo speaker to a robot vacuum cleaner? Or was his Instagram post on Monday just a teaser for his company’s next device?

The Amazon chief executive officer and world’s wealthiest man took to the photo-sharing app to post the image along with the caption: "What?!!!! Found this in the living room when I got home. I have no idea. #LifeWithFourKids"
Bloomberg News in April reported on Amazon’s plans to release a mobile Echo robot for the home.
Investors analyze Bezos’s comments for any insights into the secretive technology company’s next big project. In an earnings release on Thursday, he stirred speculation that the e-commerce giant is working on another smartphone by saying, “We want customers to be able to use Alexa wherever they are."

Or maybe Bezos’s kids were just messing around with the family Roomba.

Amazon didn’t immediately respond to a request for comment.
"This is the Amazon everyone should have feared — and it has nothing to do with its retail business" (AMZN)

Prices Received By Farmers

Via Econoday (on blogroll at right):
The Department of Agriculture releases at the end of the month the index of prices received by farmers for the current month. Prices received represent sales from producers to first buyers. They include all grades and qualities. For most items, the current month's preliminary price represents a 3-5 day period around the 15th of the month. However, previous month's prices (revised) cover the entire month. The index is not adjusted for seasonal variation. It includes crop prices and livestock & product prices. Farm prices are monitored by analysts to give early warnings of inflation or deflationary pressures in the economy.  Why Investors Care

Released On 7/30/2018 3:00:00 PM For Jun, 2018

Farm Prices - m/m % change1.7 %0.1 %
Farm Prices - y/y % change-3.9 %-3.3 %
Today Econoday tells us to watch for the Employment Cost Index.

"This is the Amazon everyone should have feared — and it has nothing to do with its retail business" (AMZN)

Just to hammer the point home.

From Recode:
The fast, profitable growth of the online commerce giant’s cloud computing and ad businesses should scare rivals.

Amazon’s $52.9 billion of revenue in the second quarter of the year came in a tad below what Wall Street analysts expected — and that doesn’t matter whatsoever.

That’s because the massive online retailer once again posted its largest quarterly profit in history — $2.5 billion for the quarter — on the back of two businesses that were afterthoughts just a few years ago: Amazon Web Services, its cloud computing unit, as well as its fast-growing advertising business.

An Amazon that is posting growing profits from its non-core business means an Amazon that can continue to keep prices low and invest in ever-speedier delivery times to widen its defensive moat in its main retail business. That should be a very scary realization for rivals. 

Here’s another: Those two highly profitable businesses, AWS and the ad business, are showing little sign of slowing down. AWS revenue growth accelerated in the second quarter, rising 49 percent year over year....MORE

July 27 
"Amazon ad sales top $2 billion, its fastest-growing segment" (AMZN)

July 27
"Every major Wall Street analyst on the internet giant's earnings report" (AMZN)
We'll be back with more about why we focused on the cloud stuff in yesterday's "Ahead of Amazon's Earnings: I've Looked at Clouds From Both Sides Now (AMZN; GOOG)". For now this segment information from the Q2 press release is the TL;DR:

Operating income: AWS  $1.642 billion
Total operating Income  $2.983 billion
Yes, the cloud business accounted for 55% of the company's operating income.
July 26
Ahead of Amazon's Earnings: I've Looked at Clouds From Both Sides Now (AMZN; GOOG)

"Mars cannot be terraformed so that we can live there because there is not enough carbon dioxide, scientists reveal"

Sorry Elon.

From The Independent:
We will 'need technologies well beyond our current grasp' if we plan to move to the red planet, a new study has found

We won't be able to comfortably live on Mars, experts have revealed.

Scientists – as well as science fiction fans – have long hoped that we might be able to change Mars so it has an Earth-like atmosphere, allowing us to comfortably live there. Plans to do so have included dropping thermonuclear weapons at the planet's poles – an idea supported by Elon Musk.

But there simply isn't enough carbon dioxide on the planet to allow the atmosphere to ever become habitable for humans, according to new research. At best we could achieve only a fiftieth of what is needed, and would only be able to raise the surface temperature by less than 10 degrees Celsius, the study published in Nature Astronomy reveals.

Proponents of terraforming often suggest that we could use the greenhouse gases that are stored in Mars' rocks and polar ice caps. If those were released back into the atmosphere, it would make it thicker, heat up the planet, and allow liquid water to remain on the surface.

That, in turn, would allow future Mars settlers to roam around the planet without dying, they suggest....MORE
Not dying, major selling point.

Here'sthe paper at Nature:
Inventory of CO2 available for terraforming Mars

Crop Progress: Are We Headed For Record Yields?

From AgWeb:
While USDA continues to show corn and soybean conditions are impeccable, some farmers say crop conditions reports don’t tell the full story.

According to Monday’s USDA Crop Progress Report, 72% of the nation’s corn crop is rated good to excellent. Last year only 61% of the crop was rated good to excellent this same week. Soybeans are doing well too, USDA says. This week’s report shows 70% of the soybean crop is rated good to excellent.

Still, it’s clear by looking at USDA data that there are some problem areas across farm country. Corn crops in Missouri, Kansas, North Carolina and Texas continue to struggle from drought and less than 10% of each state’s corn crop is rated excellent. For comparison, Wisconsin’s crop is rated 31% excellent. The situation is similar for soybeans. Soybean crops in Kansas, Michigan, Missouri, and North Carolina continue to struggle.

According to Chip Flory, Farm Journal economist and AgriTalk host, farmers at the Leading Edge conference hosted by Pro Farmer last week say their corn and soybean crops are either great or terrible. There aren’t many reporting average crops.

“When we did the early bird session, and everybody was talking about their crop conditions, there was a whole lot of ‘This is going to be an eight to a 10 crop on a one to 10 scale.’ There were the guys that said, ‘This is a three to five crop for us’ and there wasn't a whole lot in the ‘Well this looks like it's going to be an average crop right at five’ category,” Flory said on AgriTalk this week. “It seems like they've either got a good crop or they're really suffering this year.”...MORE
It does look like the markets are expecting a lot of corn, here's five years of prices:


Capital Markets: "BOJ Prepares for QE Infinity"

From Marc to Market:
The Japanese yen has been sold following the adjustments to policy and outlook by the BOJ that will allow the unconventional policies continue for an "extended period of time." Cross rate pressure and month-end demand have lifted the euro and sterling through yesterday's highs. A disappointing Q2 GDP report from the eurozone (0.3% instead of 0.4%) helped slow the euro's gains, while the preliminary CPI was firm. Reports that Canadian team was not invited to US-Mexico NAFTA talks today may be weighing on the Canadian dollar a little.

There had been much speculation in recent days over the BOJ's course, and it turns out that much of what was discussed found its way into policy. The BOJ announced several steps, each small, but together are a significant adjustment to policy. The zero target for the 10-year yield remains, but greater latitude was signaled, and rather than move in a +/-10 bp, a 20 bp movement will be tolerated. The negative rate will be applied to a smaller part of bank deposits at the BOJ. The ETF buying will continue, but as had been floated, the buying will shift more to the Topix from the Nikkei.

The BOJ cuts its inflation forecasts. This year's projection was reduced to 1.1% from 1.3%. Next year's inflation forecast was trimmed to 1.5% from 1.8% and in 2020 1.6% from 1.8%. Although the BOJ provided some explanation for the weakness in price pressures, like the entry of women and elderly into the workforce, the risk is that it still is too optimistic about inflation.

The BOJ updated its forward guidance. It indicated that the extraordinary policies are will be in place for an "extended period of time." This is a key way what the BOJ is doing is different than the Fed or ECB. The BOJ is not modifying its measures to gradually bring them to a halt. To the contrary, it is to allow them to be sustained for longer. The statement was issued under a title which sums up our assessment: "Strengthening the Framework for Continuous Powerful Monetary Easing."

The yen has been sold to its lowest level since July 20. The greenback has pushed a little above JPY111.50 in the European morning. A $456 mln option struck there is expiring today. There another $965 mln option at JPY112.00 and about $800 mln at JPY111.00. The euro has approached JPY131, which is an important retracement of the recent decline.

EMU economic news was mixed. The unemployment rate looked to have slipped to 8.3%, but the May estimate was reduced to 8.3% from 8.4%. Inflation was a touch firmer than expected. The headline rose to 2.1% from 2.0%, and the core rate rose to 1.1% from 0.9%. Disappointingly, GDP expanded by 0.3% in Q2, a little softer than the 0.4% seen in Q1. The year-over-year pace slowed to 2.1% from 2.5%.

While the euro is firmer, it continues to trade within the range seen last week on the day the ECB met. The high then was just shy of $1.1745. The euro has not been above $1.1750 since July 11. In addition to cross rate demand from the yen, we also see two other forces impacting the euro. First, month-end position and hedge adjustment are thought to be euro friendly. Second, and pointing in the opposite direction is the effect of today's Treasury redemptions, which the Fed uses to shrink its balance sheet. On such days, the euro has typically traded heavier.....MORE

Monday, July 30, 2018

"Bitcoin Miner BitMain Says It Earned $1.1 Billion In Q1 2018; Plans IPO"

Something sounds way, way off with this story.

From Fortune's Term Sheet, July 30:

Scoop: Bitcoin Mining Company Bitmain Hit $1.1 Billion in Profits in Q1 2018
The co-CEO of Bitmain Technologies, the world’s largest cryptocurrency mining company, recently revealed plans to conduct an initial public offering in Hong Kong, or in an overseas market with U.S. dollar-denominated shares. The IPO would give early investors, including Sequoia Capital and IDG Capital, an opportunity to cash out.

Term Sheet has obtained an email from a source close to the company, which includes some of Bitmain’s latest financials ahead of its planned IPO.
— Bitmain is raising further cash in addition to a $400M round reported in early June. The new funding would value Bitmain at approximately $14 billion, implying a 10 to 11x earnings multiple, according to the email. This is a 16.6% increase from the company’s most recently reported $12 billion valuation.

— The email cites a KPMG audit of the business and reports that Bitmain produced $1.2 billion in net profit and an approximately 50% net margin in 2017.

— Bitmain reportedly brought in $1.1 billion in net profit just in the first quarter of 2018. According to the email, a conservative estimate of what the company could earn in net profit for the full year hovers at approximately $2 to $3 billion....

"Stocks Lose Again, As Nasdaq Sinks To 50-Day Line"

From Investor's Business Daily:
U.S. stock indexes stumbled Monday, as the Nasdaq led the way down for the third session in a row.
The Nasdaq composite dropped 1.4%, while the S&P 500 and the Dow Jones industrial average each fell 0.6%. Small caps held up slightly better with the S&P 600 dipping 0.5%.

Volume was lower on both major exchanges, according to preliminary data.

The Nasdaq closed mildly beneath its 50-day moving average, an area where the index will be testing support. A bounce off the line would be bullish. A slicing under would be bearish.
The S&P 500 has a small cushion above the 50-day line, but is testing previous resistance at the 2,800 price level.

FANG Stocks, Apple All Fall
All four FANG stocks were down. Facebook (FB) sank 2%. Amazon.com (AMZN) also lost 2%. Netflix (NFLX) skidded almost 6%. Alphabet (GOOGL) dumped 1.8%. Apple (AAPL), which some consider deserving a place in the same leadership group, trimmed 0.5%.

Apple reports fiscal Q2 results after the close on Tuesday. Please read this recent Stock Market Today column for details on the outlook for Apple stock.

Among IBD's 197 industry groups, software and computer stocks took the day's hardest hits. Office supplies and oil stocks advanced.
Earlier at IBD:

Netflix And This Sector Lead Sell-Off As These 8 Growth Stocks Trigger Sell Signal 

Nasdaq, S&P 500 Face This Key Test As Stock Market Extends Losses

"Uber and Lyft Are Overwhelming Urban Streets, and Cities Need to Act Fast"

Following up on the mention in this weekend's "I Am So Close To Going Full-On Luddite", a much deeper dive into the research.

From StreetsBlog NYC:
Contrary to the story Uber, Lyft, and their peers like to tell, ride-hailing services are not reducing traffic in American cities. Nor will they, even if they meet their goals for converting solo passenger trips to shared rides, according to new research from transportation analyst Bruce Schaller.

While ride-hailing companies add options for people to get around without owning a personal car, Schaller shows that the overall effect of their growth has been to jam more motor vehicle traffic onto crowded city streets. Also known as transportation network companies, or TNCs, Uber and Lyft haven’t just supplanted taxis, they’ve more than tripled total for-hire vehicle mileage in the span of a few short years.

Most of this mileage is concentrated in the nation’s largest, densest cities, where TNCs compete with transit more than personal cars. Fully 70 percent of Uber and Lyft trips are in nine major metropolitan areas, adding 5.7 billion vehicle miles annually.
If cities don’t take steps to curb car traffic and prioritize spatially efficient modes like transit and cycling, Schaller warns, Uber and Lyft will continue to exacerbate urban traffic congestion and weaken surface transit systems.

Schaller’s report, The New Automobility [PDF], augments previous research with newly available TNC trip data and thousands of interviews from the National Household Travel Survey.
The main conclusion is that TNCs are bound to generate more car traffic in cities for two reasons: They mostly draw passengers who wouldn’t have otherwise used a car, and each TNC trip includes significant mileage with no passenger.

Travel surveys consistently reveal that only about 20 percent of TNC trips replace personal car trips. Another 20 percent replace traditional taxi services. The bulk of TNC trips — 60 percent — either replace transit, biking, and walking, or would not have been made without the availability of TNCs.
Uber and Lyft have pivoted to emphasize the growth of their shared-trip services like UberPOOL and Lyft Line, but Schaller demonstrates that even under the most optimistic scenarios for shared-ride adoption, the net effect of the services is to generate more traffic than a scenario in which they did not exist....MUCH MORE

Ahead of Tomorrow's Apple Earnings.... (AAPL)

I got nuthin'.
A quick look at the chart:

AAPL Apple Inc. daily Stock Chart

Except for the gap up May1-2, $168.45 to $175.23 and the resistance-becomes-support line around $180 nothing really stands out.
I do know the broader market does not need a complete fail from Apple. it is still the largest market cap in world meaning the cap-weighted S&P 500 and Nasdaq 100 in particular are sensitive because math. And in the DJIA and Nasdaq because price-weighting and psychology respectively.

Here are the top 10 names in the hundo (11 symbols) as of the close on July 27:

Components of the Nasdaq 100
Rank Company Symbol Weight
1 Apple Inc AAPL 11.151
2 Amazon.com Inc AMZN 10.475
3 Microsoft Corp MSFT 9.828
4 Alphabet Inc GOOG 5.134
5 Facebook Inc FB 4.983
6 Alphabet Inc GOOGL 4.445
7 Intel Corp INTC 2.639
8 Cisco Systems Inc CSCO 2.378
9 PepsiCo Inc PEP 1.925
10 Comcast Corp CMCSA 1.914
11 Netflix Inc NFLX 1.834

And here are the last two weeks of  the 100

Netflix and Facebook got hammered, GOOG and Amazon had stellar reports but traded down and Microsoft was boring but is also down 5% since reporting. Back to Apple, it's out of our wheelhouse but a couple percent beat would be positive. Maybe announce a takeover of the Federal Reserve or a mid-size country if guidance looks weak.

Here's the earnings surprise history over the last year, via Nasdaq, you can see what excited the gap up:

Quarterly Earnings Surprise History

Quarter End
Per Share
EPS* Forecast
Mar2018 05/01/2018 2.73 2.69 1.49
Dec2017 02/01/2018 3.89 3.82 1.83
Sep2017 11/02/2017 2.07 1.87 10.7
Jun2017 08/01/2017 1.67 1.57 6.37

Apple-ologists will be listening intently for comments on the next phone, parsing every umm and ah.
We'll see what they've got to say on Wednesday. The stock, as the saying goes, is widely covered.

Trade Imbalance: Millennials To Blame

Here's your trade imbalance.

From the US Department of Agriculture's Economic Research Service, July 30:


Per capita use of avocados has tripled since the beginning of the 2000s and now totals just over 7 pounds per person annually in the United States. In the 2017/18 marketing year, total domestic use, defined as net production plus imports minus stocks in cold storage, is projected to match the record high of 2.3 billion pounds set in 2015/16. The rise of the fruit’s availability reflects its growing popularity for use in foods like guacamole and in sandwiches. Increasing consumer awareness of the benefits of “healthy fats,” like the monounsaturated fats found in avocados, has also played a role in its growth. Domestically, avocados are grown in Florida (on average, over 16 percent of total), 
California (over 80 percent), and Hawaii (less than 1 percent), but net domestic production has not kept up with consumer demand. Nearly all of the growth in per capita use since the mid-2000s has been satisfied by imports, particularly from Mexico, which is the source of the vast majority of total import volume. Chile once supplied a majority of U.S. avocado imports, but it was surpassed by Mexico beginning in 2005. This chart appears in the ERS Fruit and Tree Nut Outlook report released in March 2018.

Meanwhile, in Ethiopia: "Millennials Kill the Purpose in Life"

From AllAfrica:

Millennials Kill the Purpose in Life 

Laziness and lack of realistic ambitions seem to be rampant among millennials. They have unrealistic goals and poor workplace culture. They spend much of their time on social media or watching movies and hope to lead their lives in ways that are similar to fictional characters or the virtualized versions of their peers.

They often struggle to discover who they want to be in life. Many lack skills to engage in a professional manner even during recruitment interviews. They demand management roles and above-average salaries for skills and experiences that they do not have.

Even entrepreneurship has been devalued. In its name, millennials spend unregulated time wasting valuable hours sitting around in cafes and restaurants....MORE
Eating avocado toast I bet.

AV Club Does Vertical Farms

From AV Club:

Tomato, ToMacco: Farmers are elevating their crops with vertical farming
With more than 5.6 million articles, Wikipedia is an invaluable resource, whether you’re throwing a term paper together at the last minute, or doing legal research on whether it can really be considered assault if your victim habitually made the “cows outstanding in their field” joke. We explore some of Wikipedia’s oddities in our 5,690,195-week series, Wiki Wormhole.

This week’s entry: Vertical farming

What it’s about: Ah, the farmer’s life. The smell of the soil, the green of the leaves, the view from the 45th floor. Yes, like bathrooms before them, farms are moving into the future by moving indoors. Hydroponic farming has made vertical farms possible, in which floor after floor of a building is devoted to growing food. One such farm in Buffalo, New York contains 17 million plans, and a “windowless farm” in Kyoto produces 6 million heads of lettuce a year.

Biggest controversy: It’s an open question as to whether vertical farms are actually beneficial. While they don’t use pesticides or chemical fertilizers, their electricity needs are far beyond that of a traditional farm. And while farms that don’t have to deal with pests or changes in weather can be more efficient, the cost of a large building in an urban center generally far outpaces the cost savings of not having to transport food from country to city.

Strangest fact: The idea of vertical farms has been around a long time. Sir Francis Bacon first proposed growing plants without soil in 1627, and by the mid-1800s, “soil-less cultivation” was being used routinely. Gilbert Ellis Bailey coined the phrase “vertical farming” in his 1915 book of the same name, but he used the phrase to consider plants from top to bottom (i.e., from leaves to root). However, six years earlier, Life Magazine published a concept drawing of a tall building that cultivated food, and soon Bailey’s phrase was used to describe what Rem Koolhaas called “the skyscraper as utopian device for [food] production.”...MORE

Shipping: Carriers Bullish on Freight Rates

From The Loadstar:

Peak season sees freight rates more buoyant and carriers bullish on price hikes

Container freight rates on the major east-west deepsea trades are beginning to lift as the peak season begins and price hikes scheduled for next week make their presence felt in the market.

Today’s Shanghai Containerised Freight Index (SCFI), a basket of rates quoted for the forthcoming week, saw its composite rate today up 8.8% week on week, with increases seen on almost every trade it tracks.

The rate on the Shanghai-North Europe grew 7.3% this week to finish at $926 per teu, compared with $863 per teu last week, as the trade edges towards the psychologically key $1,000 per teu point.
Meanwhile, the Shanghai-Mediterranean component showed the weakest growth, 2.8%, to finish the week at $893 per teu.

The transpacific trades to both the east and west coasts of North America saw a continuation of several weeks of strong price growth: into the US west coast up 16.4% to $1,877 per feu; and the Shanghai-US east coast trade up 7.4% to $2,846 per feu....MORE

Local Journalism Is Aiive and Well "Chance the Rapper Buys Chicagoist, Promises to Investigate Rahm Emanuel"

From Reason:

"And Rahm, you done, I'm expectin' resignation..."
Chancelor Bennett, known by his stage name, Chance the Rapper, recently announced that he is the proud new owner of Chicagoist. The purchase was announced in "I Need Security," one of four new songs that he released late Wednesday evening.

Chicagoist was part of the local news empire that started with New York City's Gothamist, founded in 2003. The group of sites was purchased by billionaire Joe Ricketts in 2017, who shuttered the suite later the same year after employees voted to unionize. The closure affected 115 journalists, including those who worked for Chicagoist, DCist, LAist, and similar city publications. Three of the publications affected—Gothamist, DCist, and LAist—were relaunched in February by New York public radio station WNYC.

According to Gothamist, Chance's Social Media LLC purchased the Chicagoist website from WNYC.

"I'm extremely excited to be continuing the work of the Chicagoist, an integral local platform for Chicago news, events and entertainment. WNYC's commitment to finding homes for the -ist brands, including Chicagoist, was an essential part of continuing the legacy and integrity of the site. I look forward to re-launching it and bringing the people of Chicago an independent media outlet focused on amplifying diverse voices and content," he reportedly said in a statement. Or as he rapped in song form, "I bought the Chicagoist just to run you racist bitches out of business."

It would appear that Chance is already getting into the investigative spirit with a set of lyrics directed to Chicago Mayor Rahm Emanuel:...MORE

"The Evolution of Security Prices Is Governed by a Physicomathematical Law"

From Physics arXiv:

Wally Tzara
Since Bachelier's thesis in 1900, when mathematical finance began, attempts at understanding the nature of stock market prices and at predicting them have not succeeded. Statistical models have only found minor regularities and anomalies. Other approaches have failed or are illusory. To this day, physicists and mathematicians working in economy consider that the evolution of security prices is largely random, and, thus, not predictable. We show that not only is the evolution of security prices not random but it is semi-deterministic and, more remarkably, governed by a physical law. 
The law takes the form of a physicomathematical theory centered around a purely mathematical function (not a model and unrelated to statistical methods). The function, which can be described as an "isodense" network of "moving" regression curves of an order greater than or equal to 1, can be conveniently represented graphically. The graphical representation, called a "topological network", reveals the existence of new mathematical objects, which emerge spontaneously (they are not mathematically drawn). 
What is remarkable is that these objects, called "characteristic figures", mainly "cords", have the unique property of attracting and repelling the price, so that the price bounces from one cord to another. The direct consequence is that prices are driven by these cords in a semi-deterministic manner (leaning towards deterministic). We can say that we now understand the reason behind price movements and can predict stock prices both qualitatively and quantitatively. Note that time series data (not limited to financial) is input directly into the function without any fitting. The function is universal (it is a one fits all function) and, thanks to its extreme sensitivity, reveals the hidden order present in time series data that other methods have never uncovered.
 arXiv download page

"Why Do the Biggest Companies Keep Getting Bigger? It’s How They Spend on Tech"

You may disagree with the premise—and there's enough anti-competitive behavior among the giants to back that disagreement— but it's hard to disagree with the illustration
From the Wall Street Journal, July 26:

 Why Do the Biggest Companies Keep Getting Bigger? It’s How They Spend on Tech
Your suspicions are correct: The biggest companies in every field are pulling away from their peers faster than ever, sucking up the lion’s share of revenue, profits and productivity gains.
Economists have proposed many possible explanations: top managers flocking to top firms, automation creating an imbalance in productivity, merger-and-acquisition mania, lack of antitrust regulation and more.

But new data suggests that the secret of the success of the Amazons, Googles and Facebook s of the world—not to mention the Walmart s, CVSes and UPSes before them—is how much they invest in their own technology.

There are different kinds of IT spending. For the first few decades of the PC revolution, most companies would buy off-the-shelf hardware and software. Then, with the advent of the cloud, they switched to services offered by the likes of Amazon, Google and Microsoft . Like the difference between a tailored suit and a bespoke one, these systems can be customized, but they aren’t custom.
IT spending that goes into hiring developers and creating software owned and used exclusively by a firm is the key competitive advantage. It’s different from our standard understanding of R&D in that this software is used solely by the company, and isn’t part of products developed for its customers.

Today’s big winners went all in, says James Bessen, an economist who teaches at Boston University School of Law and who recently wrote a new paper on the policy challenges of automation and artificial intelligence. Tech companies such as Google, Facebook, Amazon and Apple—as well as other giants including General Motors and Nissan in the automotive sector, and Pfizer and Roche in pharmaceuticals—built their own software and even their own hardware, inventing and perfecting their own processes instead of aligning their business model with some outside developer’s idea of it.

The result is our modern economy, and the problem with such an economy is that income inequality between firms is similar to income inequality between individuals: A select few monopolize the gains, while many fall increasingly behind. Might it eventually be the case that the biggest firms aren’t just dominant, but all-encompassing?

The measure of how firms spend, which Mr. Bessen calls “IT intensity,” is relevant not just in the U.S. but across 25 other countries as well, says Sara Calligaris, an economist at the Organization for Economic Cooperation and Development. When you compare the top-performing firms in any sector to their lesser competition, there’s a gap in productivity growth that continues to widen, she says. The result is, if not quite a “winner take all” economy, then at least a “winner take most” one.

That productivity gap correlates with the increase in spending on proprietary IT, says Mr. Bessen. In 1985, firms spent on average 7% of their net investment (which includes software, new buildings, R&D and the like) on proprietary IT, according to data from the Bureau of Economic Analysis. In 2016, about 24% of U.S. firms’ net investment went into proprietary IT. That’s nearly $250 billion in a single year, and almost matches their outlay for R&D and capital expenditures.

This also has implications for wages—the rise in the wage gap since 1978 is almost entirely attributed to an increase at more-productive firms that occurred as pay at less-productive firms remained relatively static, according to the National Bureau of Economic Research....MUCH MORE

"Norwegians Quietly Revolt Against Tesla" (TSLA)

Ahead of Wednesday's earnings release we have this odd little piece of news.
I'm not sure it will matter to the stock price, which marches to its own drummer. but it is something Musk & Co. have to fix, fast.
From Bloomberg, July 23:

Slow repairs in Norway hint at troubles as the automaker grows
After a fender-bender with his Tesla Model S last February, Tor Havard Wiig figured he’d be back on the road within a week or two. Five months on, he’s still waiting on parts—and he’s ready to sell the two-year-old car.

The delay and scant communication from Tesla Inc. show “there’s a lot lacking there,” said Wiig, a 43-year-old technology consultant in the Norwegian coastal city of Bergen. “I never expected it to take so long to fix such minor damage.”

As Tesla sales boom in Norway, customers are grousing about a dealership network and service operation that have failed to keep pace. Though Chief Executive Officer Elon Musk says the level of output Tesla has reached this summer means it’s finally become a real car company, the experience in Norway suggests Tesla’s woes don’t stop at the assembly line. Musk has struggled to ramp up production of a cheaper sedan, the Model 3, and the company is said to have pressed suppliers to return cash paid for components.
In Norway, where plug-in hybrid and electric vehicles made up more than half of new car sales last year, Tesla is the lowest-ranked automaker on a list of brands for quality of service, and fourth-worst among companies in all sectors.

Tesla has slipped up as sales in Norway for its Model S sedan and Model X SUV—with prices ranging from about $80,000 to $130,000 in Norway—more than doubled last year and jumped another 70 percent through June. Its repair staff, by contrast, has grown only by a third—highlighting the potential troubles it may face as electric cars become more commonplace.

“You could probably call it growing pains,” said Christina Bu, secretary general of the Norwegian Electric Vehicle Association, a group that represents car owners. “They’re heading at full speed into a mass market where customers will demand better service. Norway is the first country where this is really happening.”

Musk has said Norwegians were right to be upset, but blames authorities for not acting fast enough to greenlight a plan to dispatch repair technicians to customers’ homes. While some talks have taken place, Tesla hasn’t filed a formal application for mobile service centers, Norwegian officials say....MORE

Sunday, July 29, 2018

"Colleges ask for a share of future salary in lieu of loans"

From the AP via WTOP (D.C):
MONTPELIER, Vt. (AP) — As more students balk at the debt loads they face after graduation, some colleges are offering an alternative: We’ll pay your tuition if you offer us a percentage of your future salary.

Norwich University announced Tuesday that it will become the latest school to offer this type of contract, known as an income share agreement. Norwich’s program is starting out on a small scale, mainly for students who do not have access to other types of loans or those who are taking longer than the traditional eight semesters to finish their degree.

“Norwich University is committed to offering this new way to help pay for college in a way that aligns incentives and helps reduce financial barriers to degree completion,” said Lauren Wobby, the school’s chief financial officer and treasurer.

In contrast with traditional loans, in which students will simply pay down the principal and interest until there is nothing left, students with income share agreements pay back a percentage of their salary for a set period of time. Those touting the programs say they give colleges greater incentive to help students find high-earning jobs after graduation, because a higher salary means the school may recoup its investment in a shorter period of time.

For some students, income share agreements are seen as less risky, especially if they end up in a lower-paying job or struggle to find work after graduation. While students are unemployed or earning below a certain threshold they don’t have to pay anything back.

“Taking on the debt through a contract, where you don’t take on a debt per se but instead will repay a portion of your future income, has a certain appeal to students when the concept is fully explained to them,” said Clare McCann, deputy director for education policy at the New America Foundation.

But because employment and salary determine repayment, it’s possible providers could be seen as discriminating against recipients who choose lower-paying professions....MORE
On the other hand, the current system may be incentivizing more students into majors that are oversupplied and thus underpaid. In olden times the Psych/English major could end up as a very sharp assistant in business/philanthropy. Nowadays he's a chatty barista.

On the third hand, I could see a concentration in folklore/mythology having real-world payoffs for the class of 2018 entering the job market in 2022. Especially combined with a CS degree and a Silicon Valley address.

"Despite the far-reaching consequences of Johannes Gutenberg’s printing press, much about the man remains a mystery, buried deep beneath layers of Mainz history".

One of my all-time favorite maps:

That's it. Mainz.
The rest of the series are after the jump. This one is via Economists View, we have the source below.

From The BBC, May 8, 2018:

How a German City Changed how We Read
The German city of Mainz lies on the banks of the River Rhine. It is most notable for its wine, its cathedral and for being the home of Johannes Gutenberg, who introduced the printing press to Europe. Although these things may seem unconnected at first, here they overlap, merging and influencing one another.

The three elements converge on market days, when local producers and winemakers sell their goods in the main square surrounding the sprawling St Martin's Cathedral. Diagonally opposite is the Gutenberg Museum, named after the city’s most famous inhabitant, who was born in Mainz around 1399 and died here 550 years ago in 1468.
The printing press marks the turning point from medieval times to modernity in the Western world
It was Gutenberg who invented Europe’s first movable metal type printing press, which started the printing revolution and marks the turning point from medieval times to modernity in the Western world. Although the Chinese were using woodblock printing many centuries earlier, with a complete printed book, made in 868, found in a cave in north-west China, movable type printing never became very popular in the East due to the importance of calligraphy, the complexity of hand-written Chinese and the large number of characters. Gutenberg’s press, however, was well suited to the European writing system, and its development was heavily influenced by the area from which it came.

In the Middle Ages, Mainz was one of the most important cathedral cities in the Holy Roman Empire, in which the Church and the archbishop of Mainz were the centre of influence and political power. Gutenberg, as an educated and entrepreneurial patrician, would have recognised the Church’s need to update the method of replicating manuscripts, which were hand-copied by monks. This was an incredibly slow and laborious process; one that could not keep up with the growing demand for books at the time. In his book, Revolutions in Communication: Media History from Gutenberg to the Digital Age, Dr Bill Kovarik, professor of communication at Radford University in the US state of Virginia, describes this capacity in terms of ‘monk power’, where ‘one monk’ equals a day’s work – about one page – for a manuscript copier. Gutenberg’s press amplified the power of a monk by 200 times....MUCH MORE

An interesting paper from VoxEU.org  February 11, 2011:
Information technology and economic change: The impact of the printing press

HT: economistsview

Papal Indulgences: "The story of the Avignon papacy and an acclaimed Rhône wine"

From Lapham's Quarterly:

Papal Indulgences
Sur le Pont d’Avignon
On y danse, On y danse
(On the bridge of Avignon, there we dance, there we dance)
—Fifteenth-century song and children’s rhyme
Beautifully sited on the Rhône River, about fifty miles inland from the Mediterranean Sea, the town of Avignon is undoubtedly one of the most alluring locales in Provence. Underneath the towering Gothic heights of the fourteenth-century papal palace, its charming streets and squares are lined with small boutiques and cafés thrown open to the sun. Les Halles, the central food market, brims with olives, fresh herbs and spices, oysters, and an enormous variety of local cheeses, meats, and breads. In the surrounding countryside, the Côtes du Rhône wine region produces some of the finest varieties in France.
The indisputable sovereign of the southern Rhône wines is Châteauneuf-du-Pape, a strong, earthy red that was among the first French wines to receive an AOC (appellation d’origine contrôlée) after the invention of the classification scheme in the early twentieth century. Its distinctive terroir is centered around the village that bears the same name, which translates to New Castle of the Pope. It thus serves as a viticultural legacy of a brief yet pivotal era in the history of France and the Catholic Church, known forevermore as the “Avignon papacy.” It’s a tale replete with fantastic castles, poisonous plots, and antipopes—legends that have endured for far longer than the complicated politics that brought them into being.

If we return to the days of Philip the Fair, in the early 1300s, we may remember it was a newly elected French pope, Clement V, who allowed Philip to suppress the Knights Templar. Clement had been elected on the strength of his skills as a diplomat, at a time when relations between France and the papacy were severely strained. As one of his main tasks was to enact some sort of reconciliation with the French king, he decided to take up residence in Avignon. Its location on the Rhône, not far from the Mediterranean and Italian shores, made it a convenient location for traveling around Europe. A large tract of territory next to Avignon was actually owned by the papacy. And Rome was a dangerous place at that time, torn apart by power struggles among its leading families, leaving the pope extremely vulnerable. In fact, so volatile was the capital that it was not unusual then for the popes to reside outside of Rome. Clement broke new ground, however, in deciding to reside outside of Italy entirely, and in leaving a long line of popes after him in the same location. This era, in which seven consecutive French popes remained ensconced in the pleasurable idyll of Provence, is known as the Avignon papacy.
Pope Clement V receiving a deputation of lawyers and monks, from “Clementis Quinti Constitutiones,” 1511. © The Trustees of the British Museum.

Pope Clement V receiving a deputation of lawyers and monks, from “Clementis Quinti Constitutiones,” 1511. © The Trustees of the British Museum.
The Italians, needless to say, were not pleased by this papal abandonment. Critics referred to the Avignon papacy as the “Babylonian captivity,” arguing that the papacy had been subordinated to the French kings and the spiritual integrity of the Church had been compromised. In Dante’s Inferno, Clement V is depicted in the eighth circle of hell.

Yet this terrible sinner left a rather heavenly legacy here in the earthly realm: Château Pape Clément, produced near Bordeaux. Before becoming pope, Clement had been archbishop of Bordeaux, and there he received a vineyard in donation. He cultivated it carefully and extended its size. When he became pope, the vineyard became known as Vigne du Pape-Clément. The vineyard still has a very good reputation today, producing mainly rich and fruity wines. It can arguably claim to be one of the oldest wine-producing establishments in the Bordeaux wine region.

After Pope Clement died near Avignon in 1314, rival factions in the Sacred College of Cardinals were incapable of agreeing on a new pope. After two years, the French king essentially forced them to a vote, and they elected a frail, seventy-two-year-old French cardinal who became John XXII. Their hope was that he would have a short reign, during which each faction could strengthen its position for the next election. But their hopes were dashed, as John XXII went on to reign for eighteen years (some say his apparent ill-health had all been an act). He had previously been the bishop of Avignon and was happy to stay in place, given the continuing turmoil in Rome. His longevity was often attributed to one of his strange eating habits: he preferred to eat mainly white food products, such as milk, egg whites, white fish, chicken, and cheese. A gastronomic specialty of Avignon known as papeton d’aubergines, a sort of flan made with the (white) flesh of eggplants and originally shaped like the papal hat, is sometimes said to have originated during his reign.
The greatest gastronomic legacy of John XXII was not to be eggplants, however. In an effort to periodically escape the intrigues of Avignon, he established a summer residence in a small place now called Châteauneuf-du-Pape, in the Rhône Valley north of the city....

"Automation At Both Ends Of The Food Business"

I am really having trouble seeing how automation will create more jobs than it destroys. And especially at the entry-to-the-workforce level where folks would (hopefully) get on the first rung of an ascending (hopefully) ladder.

Coding! Isn't that what we tell people in coal mining and journalism and other dying businesses?

First up, CNBC:

This weed-killing AI robot can tell crops apart
A slew of AI weed killers are on the horizon and have the potential to disrupt the multibillion dollar pesticides business. Among them is Swiss-company ecoRobotix and its weed-killing robot.

It's solar-powered and can kill weeds for 12 hours straight without an operator at the helm. Through artificial intelligence, cameras and two robotic arms, the table-looking robot sprays a dose of herbicide on weeds but not the crops. EcoRobotix uses 20 times less herbicide than traditional methods that spray entire fields.

Founded in 2011, ecoRobotix develops autonomous weeding robots, which help farmers to produce healthier food with a more efficient and sustainable use of herbicides. The company carried out pilot projects in Europe and closed a $10.7 million Series B financing round in May....MORE
And from LA Eater:

Pasadena’s Burger-Flipping Robot Will Now Fry Chicken at Dodger Stadium
Flippy is quickly automating the fast food industry
The future of fast food automation comes ever-closer to reality today, as news is out that Flippy, the burger-loving robot worker attracting national attention, is heading to Dodger Stadium. According to USA Today, Flippy will start up in August, frying chicken tenders and making tater tots.

For those unfamiliar, Flippy is an automated robot made up primarily of a multi-functional arm that’s capable of flipping burgers at a pretty incredible sustained rate. The Pasadena-based Miso Robotics company built Flippy to maximize production in the fast food sector, and has been testing out its viability in the kitchen of local burger restaurant CaliBurger. After a few initial tweaks the robot has been flipping like mad, turning out reportedly thousands of burgers with complete success.

Now Flippy is heading up to Dodger Stadium to try to revolutionize the stadium dining industry. Sports and live events are notoriously hard on even the most seasoned operators (the Dodgers use Chicago-based concessions company Levy), as natural breaks in the show often lead to tens of thousands of people wanting food all at once, making timing and precision a key factor....MORE

Weather: "the Shipping Forecast"

Next year will be the 150th anniversary of one of the most astounding feats in science, Mendeleev's prediction of the properties of as-yet undiscovered elements. He was so convinced they would be found he left spaces for them in his 1869 periodic table.
Gallium, Scandium and Germanium were subsequently discovered, in 1875, 1879 and 1886 respectively.

That's what science does if you get it right, it allows you to predict.

With that longer-than usual-introduction here's some, more mundane but possibly more valuable, prediction stuff.

From 99% Invisible:
Four times every day, on radios all across United Kingdom, a BBC announcer begins reading from a seemingly indecipherable script. “And now the Shipping Forecast issued by the Met Office on behalf of the Maritime and Coastguard Agency,” says the voice over the wire. “Viking, North Utsire; southwesterly five to seven; occasionally gale eight; rain or showers; moderate or good, occasionally poor.” Cryptic and mesmerizing, this is the UK’s nautical weather report.

The Shipping Forecast is “part of the culture here,” muses Charlie Connolly, author of Attention All Shipping: A Journey ‘Round the Shipping Forecast. “It’s a much loved institution. People regard it as poetry.” Connolly grew up listening to the forecast. Even now, as an adult, he sets his alarm so he can tune into the early morning forecast.

The story of this radio program starts (well before the BBC itself) in the 1850s with a man named Admiral Robert FitzRoy. He was the captain of the Beagle, the ship that brought Charles Darwin to the Galapagos.

HMS Beagle in the Straits of Magellan
FitzRoy had a long, sometimes controversial career, but later in his life he became fascinated with the study of weather prediction.

Barometric Prophecies

An Admiral Fitzroy’s Storm Stick Barometer, signed Negretti & Zambra, Instrument Makers to Her Majesty, via Tennants
In FitzRoy’s time, lots of ships sank at sea due to weather. People were just beginning to understand the connection between air pressure and storms, which piqued the captain’s interest. So when he was appointed head of the nation’s new Meteorological Office, he poured all his energy into the study of air pressure. He had a barometer, and he would use it to try and figure out what was about to happen with the weather.

Then, one day in 1859, a ship called the Royal Charter was sailing from Australia to Liverpool. Many of the passengers on board were miners, returning home from the Australian gold mines. A big storm blew in and FitzRoy, who was sitting at home in London at the time, saw on his barometer that the pressure had dropped, but had no way to warn anyone. The Royal Charter sunk, and over 450 people drowned. FitzRoy was filled with guilt. He wished he could have done more to warn people, and decided to devote his life to saving lives at sea by predicting the weather.

The Royal Charter sank in an 1859 storm
Worried that people might associate his predictions with some kind of esoteric witchcraft or superstition, FitzRoy avoided the term prophecy in favor of forecast, and coined the phrase “weather forecast.” He delivered his forecasts by telegraph around the United Kingdom, where signal flags were hoisted in harbors to warn ships heading out to sea. Eventually his forecasts were published in the newspaper, and while they were often ridiculed by readers at the time, they were pretty accurate, and they became indispensable for sailors and fishermen....

If you follow the link you'll be coming up on one of the readers of The Shipping Forecast, Peter Jefferson, who worked for the BBC for four decades and who we last visited in:
"The ultimate insomnia cure? New GDPR law becomes bedtime story for grown-ups"
Yes, he reads the new EuroLaw and yes it is a soporific.

Big Brother’s Blind Spot: "Mining the failures of surveillance tech"

From The Baffler:
Netflix believes, algorithmically at least, that I am the kind of person who likes to watch “Dark TV Shows Featuring a Strong Female Lead.” This picksome genre is never one that I that seek out intentionally, and I’m not sure it even represents my viewing habits. (Maybe I fell asleep watching The Killing one night?) It is an image of me that Netflix compiled from personal data it gathers, and, like a portrait taken slantwise and at a distance, much finer detail is missing. As it happens, television sometimes puts me to sleep; other times I stream a movie as I work on my laptop, and by the time I’ve finished typing and look back, the credits are rolling. Either way, the idea offered of me after my data has been mined is curiously off-base.

More than a decade ago, Netflix ushered in a cultural conversation about big data and algorithms with stunts like the Netflix Prize—an open competition to improve user rating predictions—and its eventual use of subscriber data to produce and cast the show House of Cards. Now, with Cambridge Analytica and driverless cars in the headlines, the artless future that some technology critics forecasted back then—movies cast by algorithms!—sounds quaint in comparison. For the time being, the stakes are low (rifle through streaming titles to find something good to watch), and the service declares the way it categorizes me—as a fan of the “Strong Female Lead”—rather than clandestinely populating the interface with lady detective shows. To be sure, there is plenty to criticize about its micro-targeting practices, but now that “surveillance capitalism” has eclipsed “big data” as the tech media buzzphrase of choice, at least its subscriber-based business model suggests the company has little incentive to partner with data brokers like Acxiom and Experian, to determine whether mine is a BoJack Horseman household or more apt to stream 13 Reasons Why.

Netflix is an accessible example of the gap between an algorithmically generated consumer profile and the untidy bundle of our lived experiences and preferences. The reality of living a digital life is that we’re routinely confronted with similarly less than spot-on categories: Facebook ads for products you would never buy, iPhoto tagging your house as a person’s face, false positives, false negatives, and all the outliers that might be marked as red dots on prediction models. Mix-ups like these might be laughable or bothersome; the octopus of interlinked corporate and state surveillance apparatuses has inevitable blind spots, after all. Still, I wonder if these blunders are better than the alternative: perfect, all-knowing, firing-on-all-cylinders systems of user tracking and categorization. Perhaps these mistakes are default countermeasures: Can we, as users, take shelter in the gaps of inefficacy and misclassification? Is a failed category to the benefit of the user—is it privacy, by accident?
Surveillance is “Orwellian when accurate, Kafkaesque when inaccurate,” Privacy International’s Frederike Kaltheuner told me. These systems are probabilistic, and “by definition, get things wrong sometimes,“ Kaltheuner elaborated. “There is no 100 percent. Definitely not when it comes to subjective things.” As a target of surveillance and data collection, whether you are a Winston Smith or Josef K is a matter of spectrum and a dual-condition: depending on the tool, you’re either tilting one way or both, not in the least because even data recorded with precision can get gummed up in automated clusters and categories. In other words, even when the tech works, the data gathered can be opaque and prone to misinterpretation.

Companies generally don’t flaunt their imperfection—especially those with Orwellian services under contract—but nearly every internet user has a story about being inaccurately tagged or categorized in an absurd and irrelevant way. Kaltheuner told me she once received an advertisement from the UK government “encouraging me not to join ISIS,” after she watched hijab videos on YouTube. The ad was bigoted, and its execution was bumbling; still, to focus on the wide net cast is to sidestep the pressing issue: the UK government has no business judging a user’s YouTube history. Ethical debates about artificial intelligence tend to focus on the “micro level,” Kaltheuner said. When “sometimes the broader question is, do we want to use this in the first place?”
Mask Off
This is precisely the question taken up by software developer Nabil Hassein in “Against Black Inclusion in Facial Recognition,” an essay he wrote last year for the blog Decolonized Tech. Making a case both strategic and political, Hassein argues that technology under police control never benefits black communities and voluntary participation in these systems will backfire. Facial recognition commonly fails to detect black faces, in an example of what Hassein calls “technological bias.” Rather than working to resolve this bias, Hassein writes, we should “demand instead that police be forbidden to use such unreliable surveillance technologies.”

Hassein’s essay is in part a response to Joy Buolamwini’s influential work as founder of the Algorithmic Justice League. Buolamwini, who is also a researcher at MIT Media Lab, is concerned with the glaring racial bias expressed in computer vision training data. The open source facial recognition corpus largely comprises white faces, so the computation in practice interprets aspects of whiteness as a “face.” In a TED Talk about her project, Buolamwini, a black woman, demonstrates the consequences of this bias in real time. It is alarming to watch as the digital triangles of facial recognition software begin to scan and register her countenance on the screen only after she puts on a white mask. For his part, Hassein empathized with Buolamwini in his response, adding that “modern technology has rendered literal Frantz Fanon’s metaphor of ‘Black Skin, White Masks.’” Still, he disagrees with the broader political objective. “I have no reason to support the development or deployment of technology which makes it easier for the state to recognize and surveil members of my community. Just the opposite: by refusing to don white masks, we may be able to gain some temporary advantages by partially obscuring ourselves from the eyes of the white supremacist state.”...MUCH MORE