Ahead of Halloween: "A Haunting Compendium of Paris Ghost Stories"

 From Messy Nessy Chic:

Paris may be the City of Light, but it is filled with dark corners. Some of the best-known ghost stories were inspired by the very real, gory history of this otherwise romantic setting. Behind – and, indeed, beneath – the picturesque Haussmanian facades lurk countless tragic tales, the protagonists of which are still said to stalk the streets… after all, a city filled with history is a city filled with ghosts. 

It may be one of the most iconic landmarks in the world, but even the Eiffel Tower has a few skeletons in its closet. After courting for a period of time in the 1920s, a young couple agreed to meet at the top of the tower – but only one of them would ever leave. The two had arrived with very different intentions: he was there to propose, she was there to break up with him. But it was he who spoke first. Down on one knee, he popped the question and was promptly rejected. The story goes that he pushed her off the ledge, enraged by her response. An alternative is that she backed away in disgust and fell to her death. Whichever version of events you choose to believe, they end the same grisly way. To this day, tourists claim to hear a nervous giggle followed by an angry voice, ending with a blood-curdling scream, always in the exact same spot....

....MUCH MORE 

"South India facing population challenges"

From Semafor, October 28:

The News
The world’s two most populous countries are now grappling with demographic challenges. India’s population growth rate has slowed, and the heads of two states in the country’s south — where the fertility rate has sharply dropped — recently urged families to have more children. Leaders are concerned that slowing population growth in southern India could lead to less representation in the federal legislature....

...MORE

The embedded link to India Inside Out has a lot of detail and a bit of chart mania.

https://rohanvenkat.substack.com/p/ageing-south-india-and-a-census-delimitation

You Saw What Israel Just Did With The Iranian Targets They Chose To Hit, Right?

From Business Insider, October 28:

Israel's hit on Iran, though limited, widened a vulnerability

Israel over the weekend launched strikes on Iran.

Observers feared that Israel would hit Iranian energy infrastructure. 

Instead, it hit those sites' defenses — making it easier to launch more strikes later. 

Israel's recent attack on Iran's air defense network was limited in its scope, but all the same left a significant opening.

Though Israel fell short of a major strike some feared, its attack over the weekend means Iran is more vulnerable to follow-up attacks should they come, according to experts on the region.

The long-anticipated attack was retaliation, almost a month later, for Iran launching ballistic missiles at Israel.

It is an unprecedented back-and-forth between two nations that used to do their fighting arm's length.

Unnamed officials told The New York Times that the strikes specifically targeted air-defense systems around key energy sites, though not the sites themselves.

They are said to include the Bandar Imam Khomeini petrochemical complex and the Abadan oil refinery.

In a Sunday update, the Institute for the Study of War said the Israel Defense Forces struck and disabled parts of three or four sites guarded by the Russian-made S-300 air-defense systems.

The loss, it said, undermined Iran's ability to counter future strikes.

The IDF strike also appeared to hit drone and missile production facilities across Iran, with satellite imagery published by The Guardian showing damage near the Parchin military base, a site previously linked by the International Atomic Energy Agency suspects to Iran's nuclear explosive development....

....Ori Wertman, a research fellow at the University of South Wales specializing in Israeli national security, told Business Insider that Israel "absolutely" made Iran more vulnerable with its attack.

"This is something really substantial because now it made Iran vulnerable to any Israeli attack from the air," he said, suggesting that Israel now has an opportunity, should it choose, to directly target Iran's nuclear facilities....

....MUCH MORE

"What AI Sees in the Market (That You Might Not)"

It's all about tilting probabilities in your favor by making connections and the less obvious the connections that the computer can come up with the more valuable they are.*

From the University of Chicago, Booth School of Business, Chicago Booth Review, September 3:

Ten ways investors are, or should be, using large language models 

Great investors tend to be avid readers, always hunting for some piece of information to give them a financial edge. There are decades if not centuries of examples of pros who have combined something they’ve read—in a book, article, or regulatory filing—with their market experience to gain a lucrative insight. For one example, investment manager Jim Chanos’s careful reading of Enron’s regulatory filings, and his past experience with fraud detection, led him to suspect accounting irregularities at the company. He made $500 million when Enron filed for bankruptcy in 2001.

These days, though, even the most avid readers would have trouble competing with the volume of financial insights that artificial intelligence, in the form of large language models, can uncover. LLMs have gained mainstream popularity thanks to OpenAI’s ChatGPT, an advanced chatbot powered by a series of generative pretrained transformer language models. OpenAI has released several versions of its LLM, with GPT-3.5, GPT-4, and GPT-4o among the most recent.

Almost a decade ago, Chicago Booth Review published a feature titled “Why words are the new numbers” about a coming revolution in text analysis. That predicted revolution arrived, and it demolished the monopoly that numbers long held in forecasting models. Numbers are still important, of course—but text analysis is ascendant and everything is now potential data.

The candid speech during earnings calls? Data. The formal prose of annual filings? Data. News articles? Data. The entire internet? Data.

LLMs are trained on vast amounts of text covering a broad range of information and can apply their repositories of knowledge to evaluate new information. Where a human will depend on past experience and intuition, LLMs use data and patterns from their training.

And they operate at a scale that exceeds human capabilities, quickly analyzing mountains of text and allowing traders and investors to mine insights faster and more accurately than was ever possible. They can connect ideas from different parts of a text to create a better understanding of its overall content. LLMs can even be customized, trained to become experts on accounting irregularities—or, say, mall leases or risk management.

Every asset manager with a technology team now has the opportunity to wield—and profit from—an enormous knowledge base, and many are doing just this. Funds are using LLMs to read and glean insights from earnings call transcripts, 10-K regulatory filings, annual reports, social media, and streaming news headlines—searching for clues about a company’s direction.

From the output of this text mining, LLMs can create direct trading signals (instructions to buy or sell) or develop new predictive variables for their forecasting models. If you hold actively managed funds in your retirement accounts, there’s a good chance the pros running the strategies are harnessing the research power of LLMs.

It makes sense to ask whether the advantages of LLM strategies will disappear as soon as everyone else uses them too. That’s been the outcome with arbitrage strategies—their returns fall when too many investors are chasing the limited opportunities. However, the opportunities here appear more bountiful than in arbitrage scenarios. With the field in its early stages, researchers are still finding new ways to apply AI to tease out investment insights and trading opportunities. Plus, new data sources that run the gamut from text to image, audio, and video are enabling the uncovering of information that is not so easily priced into the markets.

Researchers, like traders, are scrambling to stay ahead of the curve. Here are 10 of their recent observations....

....MUCH MORE

*If interested see also 2017's "Let Me Be Clear: I Have No Inside Information On Who Will Win The Man-Booker Prize Next Month (hedge funds, AI and simultaneous discovery)": 

Over the years we've mentioned one of the oddest phenomena in science, the simultaneous discovery or invention of something or other, the discovery/invention of the calculus by Newton and Leibniz is one famous example (although both may actually have themselves been preceded) but there are dozens if not hundreds of cases. Here's a related phenomena.

On Saturday September 23,  6:28 AM PDT we posted "Cracking Open the Black Box of Deep Learning" with this introduction:

One of the spookiest features of black box artificial intelligence is that, when it is working correctly, the AI is making connections and casting probabilities that are difficult-to-impossible for human beings to intuit.
Try explaining that to your outside investors.

You start to sound, to their ears anyway, like a loony who is saying "Etaoin shrdlu, give me your money, gizzlefab, blythfornik, trust me."

See also the famous Gary Larson cartoons on how various animals hear and comprehend:...

Today Bloomberg View's Matt Levine commends to our attention a story about one of the world's biggest hedge funds and prize-putter-upper of what's probably the most prestigious honor in  literature, short of the Nobel, the Man Booker Award....

Or:
AI, Training Data, and Output (plus a dominatrix)

Maybe:
"The Dark Secret at the Heart of AI"

And many, many more. The 'search blog' box upper left can come in handy.

Pssst: Dysprosium

 From the New York Times via the Japan Times, October 27:

...One example of China’s growing power is dysprosium, a rare earth that sells for more than $100 a pound. Previously used mainly as an additive in powerful magnets for electric cars, dysprosium is highly heat resistant. That makes it an increasingly important component of advanced semiconductors.

In the past few years, Nvidia and other computer chip manufacturers have changed the material used in hundreds of tiny electricity management devices, called capacitors, on each chip. The capacitors are now made from ultrapure dysprosium. China’s refineries produce 99.9% of the world’s dysprosium, mostly at a single refinery in Wuxi, near Shanghai.

That refinery is one of the last two in China that are still in foreign hands, after the government’s purchase or nationalization of the rest of the industry. The longtime owner of both refineries is a Canadian company, Neo Performance Materials.

Neo recently announced that, by the end of the year, it would sell an 86% stake in the Wuxi refinery to Shenghe Resources, a Chinese company traded on the Shanghai stock market. Shenghe’s biggest shareholder is China’s Ministry of Land Resources. Neo is closing the other refinery, 400 miles north in Zibo, China, and transferring its equipment and personnel to Shenghe.

Neo CEO Rahim Suleman said his company would retain an ability to sell to foreign companies. It has the right to market rare earths to international customers from the Wuxi refinery for five years. In addition, Neo has another refinery in Estonia that processes some rare earths, although not dysprosium. It has built a new factory in Zibo to turn rare earths into catalytic converter chemicals for cars.

China’s ever-stronger reins on rare earth supply chains have accelerated efforts to set up supply chains in other countries.

Solvay, a Belgian company, refines tiny quantities of dysprosium in France and said it planned to increase production. An Australian company, Lynas, said it would start refining dysprosium in Malaysia next year. Work has begun on a refinery in Texas.

But all of these plans face obstacles. Few mines outside China and Myanmar, a restive nation on China’s southwest border, have commercially viable concentrations of dysprosium. Chinese companies have been buying stakes or rights to production in mines being developed in Tanzania, Greenland and Australia. And rare earth refineries often take years to get going.

Producing the ultrapure dysprosium required for the computer chips that run artificial intelligence programs is particularly difficult: It took Neo seven years of trial and error to master the 100-step chemical process at its Wuxi refinery. Solvay said its initial increase in dysprosium output early next year would be for magnets, a less demanding application....

....MUCH MORE

Also at the Japan Times:

Former yakuza office repurposed to become elderly care facility

Which is of a piece with a couple previous posts:

• "In Japan, yakuza are reduced to stealing Pokémon cards"
• "Making a slow getaway: Japan's anti-yakuza laws result in cohort of ageing gangsters"

China's Central Bank Activates Open Market Outright Reverse Repo Operations Facility

One more tool.

From Reuters, October 27:

China's central bank announced on Monday it had activated its open market outright reverse repo operations facility and would use it to trade with primary dealers in open market operations on a monthly basis.

The bank took the decision to maintain a "reasonable abundance of liquidity in the banking system and further enrich the central bank's monetary policy toolbox," it said in a statement.

State-owned Shanghai Securities News said in an article published shortly after the People's Bank of China's (PBOC) notice that the facility was expected to cover three- and six-month tenors and that it would aid liquidity adjustments over the next year, citing people close to the central bank....

....MORE

If You Repress People (and their ability to express themselves) You Won't Get The Information You Need

This is true whether you are talking about something as mundane as political polling or as esoteric as the state intelligence organs.

A couple previous posts gathered together last winter:

Compelled Beliefs and Preference Cascades

The Wildly Perverse Effects Of Compelled Beliefs 

Lessons From Communist Eastern Europe On Virtue Signaling and Other Things

For the last few months I've been thinking of the social pathologies of life under communism and what, if any, lessons can be taken from the experiences of the east bloc.

Among the characteristics of those societies was the gaslighting (straight-up lying to you) of the people by the government and the elites. On first encounter one might wonder why the nomenklatura would risk their reputations by saying things that were demonstrably false?

That question misses the point. They weren't trying to convince anyone. Gaslighting is a power move, very popular among sexual and psychological abusers. It says "I can lie to you and you can't stop me." And then it goes further and says "I can make you say the same things." 

There are other social pathologies, the snitches, tattletales and such trying to exert power or curry favor.

There is the general air of accepting unreality, exemplified by the old Soviet joke:

"We pretend to work, they pretend to pay us."

And many more, but for now, Vaclav Havel, a writer who went on to be Czechoslovakia's last president and after overseeing the split of the two countries, Czechia's first president. Here is an excerpt from his essay "The Power of the Powerless", this version via Bard College:

III 

The manager of a fruit-and-vegetable shop places in his window, among the onions and carrots, the slogan: "Workers of the world, unite!" Why does he do it? What is he trying to communicate to the world? Is he genuinely enthusiastic about the idea of unity among the workers of the world? Is his enthusiasm so great that he feels an irrepressible impulse to acquaint the public with his ideals? Has he really given more than a moment's thought to how such a unification might occur and what it would mean?

I think it can safely be assumed that the overwhelming majority of shopkeepers never think about the slogans they put in their windows, nor do they use them to express their real opinions. That poster was delivered to our greengrocer from the enterprise headquarters along with the onions and carrots. He put them all into the window simply because it has been done that way for years, because everyone does it, and because that is the way it has to be. If he were to refuse, there could be trouble. He could be reproached for not having the proper decoration in his window; someone might even accuse him of disloyalty. He does it because these things must be done if one is to get along in life. It is one of the thousands of details that guarantee him a relatively tranquil life "in harmony with society," as they say.

Obviously the greengrocer is indifferent to the semantic content of the slogan on exhibit; he does not put the slogan in his window from any personal desire to acquaint the public with the ideal it expresses. This, of course, does not mean that his action has no motive or significance at all, or that the slogan communicates nothing to anyone. The slogan is really a sign, and as such it contains a subliminal but very definite message. Verbally, it might be expressed this way: "I, the greengrocer XY, live here and I know what I must do. I behave in the manner expected of me. I can be depended upon and am beyond reproach. I am obedient and therefore I have the right to be left in peace." This message, of course, has an addressee: it is directed above, to the greengrocer's superior, and at the same time it is a shield that protects the greengrocer from potential informers. The slogan's real meaning, therefore, is rooted firmly in the greengrocer's existence. It reflects his vital interests. But what are those vital interests?

Let us take note: if the greengrocer had been instructed to display the slogan "I am afraid and therefore unquestioningly obedient;' he would not be nearly as indifferent to its semantics, even though the statement would reflect the truth. The greengrocer would be embarrassed and ashamed to put such an unequivocal statement of his own degradation in the shop window, and quite naturally so, for he is a human being and thus has a sense of his own dignity. To overcome this complication, his expression of loyalty must take the form of a sign which, at least on its textual surface, indicates a level of disinterested conviction. It must allow the greengrocer to say, "What's wrong with the workers of the world uniting?" Thus the sign helps the greengrocer to conceal from himself the low foundations of his obedience, at the same time concealing the low foundations of power. It hides them behind the facade of something high. And that something is ideology.

Ideology is a specious way of relating to the world. It offers human beings the illusion of an identity, of dignity, and of morality while making it easier for them to part with them. As the repository of something suprapersonal and objective, it enables people to deceive their conscience and conceal their true position and their inglorious modus vivendi, both from the world and from themselves....

It's the pretending that will get you, either as an individual or as a society.

And November 4, 2021

Politics: I Am Told I Should Read Professor Timur Kuran To Understand Current American Politics

The underlying thesis is that in societies where people don't feel safe expressing themselves they will have, but not exhibit, their political preferences. This can lead to preference cascades ripping through a society, when through subtle signaling or even osmosis, individual learn they are not alone and feel freer and freer to express themselves.

It is the political version of Hemingway's dialogue on the money problems of one of the characters in The Sun Also Rises:

“How Did You Go Bankrupt?”

“Two Ways. Gradually and Then Suddenly.”

This is supposed to be the reason the American CIA was caught flat-footed by the rapidity of the collapse of the Soviet empire and Eastern European communist governments, exemplified by the Berlin Wall coming down.

I don't know if this is the case, I'll have to read the book.

From the Harvard University Press:

Private Truths, Public Lies

The Social Consequences of Preference Falsification

Preference falsification, according to the economist Timur Kuran, is the act of misrepresenting one’s wants under perceived social pressures. It happens frequently in everyday life, such as when we tell the host of a dinner party that we are enjoying the food when we actually find it bland. In Private Truths, Public Lies, Kuran argues convincingly that the phenomenon not only is ubiquitous but has huge social and political consequences. Drawing on diverse intellectual traditions, including those rooted in economics, psychology, sociology, and political science, Kuran provides a unified theory of how preference falsification shapes collective decisions, orients structural change, sustains social stability, distorts human knowledge, and conceals political possibilities.

A common effect of preference falsification is the preservation of widely disliked structures. Another is the conferment of an aura of stability on structures vulnerable to sudden collapse. When the support of a policy, tradition, or regime is largely contrived, a minor event may activate a bandwagon that generates massive yet unanticipated change.

In distorting public opinion, preference falsification also corrupts public discourse and, hence, human knowledge. So structures held in place by preference falsification may, if the condition lasts long enough, achieve increasingly genuine acceptance. The book demonstrates how human knowledge and social structures co-evolve in complex and imperfectly predictable ways, without any guarantee of social efficiency.

Private Truths, Public Lies uses its theoretical argument to illuminate an array of puzzling social phenomena. They include the unexpected fall of communism, the paucity, until recently, of open opposition to affirmative action in the United States, and the durability of the beliefs that have sustained India’s caste system.

This seems related to Vaclav Havel's essay on the greengrocer in communist Czechoslovakia that we've visited previously, "The Power of the Powerless".

That sets the stage. The next phase is when more and more people see that others think as they do.

Also from Harvard University Press:

Private Truths and Public Lies in Egypt

....Kuran’s insight and its relation to explaining social and political change is that the prevalence of preference falsification means that there are always people simmering behind public choices with which they privately disagree. When the conditions regulating public expression shift, there can be a swift and massive recalibration of “public lies.” The following comes from a chapter of Kuran’s book titled “Unforeseen Political Revolutions”:

Where the status quo owes its stability to preference falsification, there are people waiting for an opportunity, and perhaps others who can easily be induced, to stand up for change. Some eye-opening event or an apparent shift in social pressures may cause public opposition to swell. The public preferences of individuals are interdependent, so a jump in public opposition may be self-augmenting. Under the right conditions, every jump will galvanize further jumps.

The potential for change is not fully observable. We can never know exactly how a given event will be interpreted; whether a new technology will alter the balance of political power; or what it would take to turn public opinion against the status quo. Such predictive limitations imply that shifts in public opinion, especially large shifts, may catch everyone by surprise. Yet an unforseen shift in public opinion may subsequently be explained with ease. The shift will bring into the open long-suppressed grievances and draw attention to factors that have made people cease supporting the status quo.

Kuran’s model introduces something called a “threshold sequence,” which can be understood as a statistical model for what are popularly referred to as “tipping points.”....

If this is the case it appears to be one way to battle totalitarians and other power freaks who have internalized Alinsky and whose most potent tool to keep people in line is to isolate them.

From Rules for Radicals, seventh chapter: Tactics:

Rules for Radicals #13 (longer version)

The thirteenth rule: Pick the target, freeze it, personalize it, and polarize it.

 (short version)
Pick the target, freeze it, personalize it, and polarize it." Cut off the support network and isolate the target from sympathy. Go after people and not institutions; people hurt faster than institutions. (This is cruel, but very effective. Direct, personalized criticism and ridicule works.)

I'm no political theorist so as I say, I'll have to read the book.

Hurricanes Still Not As Destructive As Communism

Thanks to a friend.

Of course, as the kids say, real hurricanes have never actually been tried.

"Big Tech Is Betting on Nuclear Energy to Fuel A.I. Ambitions—But There’s One Problem"

Insightful reader (and most of ours are) may have noticed that amidst the hubbub surrounding small nuclear reactors powering artificial intelligence we haven't really pitched the companies, the Oklos and NuScales and Nano Nuclears and there's a reason for that: they aren't businesses yet. At best they are trading cards, lottery tickets, call options with unknown terms of exercise and expiration.

This view of the nascent group can look pretty darn fuddy-duddy in light of some of the moves in the stocks—60% to 120% in the last month and over 400% year-to-date but before they get to the point of having sales and earnings and cash flows there will be other opportunities to buy them, or their new competitors coming up. 

Once again it's Adam Smith and The Great Winfield and the Voodoo Beach Bunnies.*

And the headline story from Observer, October 24:

Some small modular reactors are "not going solve anything in the 2020s."

A new generation of nuclear producers, called small modular reactors (SMRs), are attracting the attention of Big Tech companies as they scramble to balance climbing power demands stemming from A.I. projects with clean energy goals. These small reactors have a power capacity of 300 megawatts—enough to power roughly 250,000 U.S. homes—and are about a third the size of the traditional nuclear reactor. Ideally, SMRs can be built in a process similar to an assembly line and easily put together at the site. But the cost of spearheading a first-of-its-kind project, coupled with a shaky regulatory environment, threatens efforts to commercialize the technology in the U.S.

The development of large language models, which demand and consume enormous amounts of energy, has set off a scramble among Big Tech firms to secure more clean power. The U.S. is the fastest growing market for data centers, according to McKinsey, which forecasts demand to more than triple by 2030 to 80 gigawatts annually. 

All this demand is disrupting already strained efforts to move towards a carbon-free grid. The Department of Energy estimates the U.S. will need approximately 700-900 gigawatts of additional clean power generation capacity to reach net-zero emissions by 2050. 

Several Big Tech firms have recently signed agreements with nuclear providers: Microsoft (MSFT) signed a deal to reopen a defunct nuclear plant in Pennsylvania; Amazon (AMZN) has inked three contracts to secure nuclear power in Virginia and Washington state; and Google (GOOGL) has signed an agreement with the startup Kairos Power to bring up to 500 megawatts of clean power to U.S. electricity grids, with the first reactor planned to be operational by 2030. 

Some experts say nuclear has significant potential to contribute to decarbonization in some countries. But it will require overcoming hurdles, from public mistrust to underinvestment, Rafael Mariano Grossi, Director General at the International Atomic Energy Agency (IAEA), said at a conference this week.

“Nuclear technologies are particularly well suited for data centers given their ability to provide resilient, 24/7 electricity,” a Department of Energy (DOE) spokesperson told Observer.

“A timeline earlier than 2030 just isn’t realistic.”
Experts in the energy industry generally agree that SMRs are far from achieving commercial status. Currently, there are just three operating SMRs in the world; none in the U.S. 

Some small modular reactors are “not going solve anything in the 2020s,” Matt Garman, the CEO of Amazon Web Services, said Monday (Oct. 21) at the WSJ Tech Live event....

....MUCH MORE

*July 10, 2012

Adam Smith on Oil Shale (Now with Voodoo Beach Bunnies)

Watching the Bakken stocks head south I am reminded that we've seen the show before. Maybe not "the"show but the out-of-town tryouts or the dress rehearsal. Last seen March 19 (sans Beach Bunnies) with the DJIA at 13,239.13 vs today's 12,700:

There's an interesting dichotomy developing in the markets, one that we've seen before.
The old pros are cautious, befuddled and a bit scared. Folks with less than a decade at the market are making money.

Adam Smith noted it in the 'sixties bull market (The Money Game via Contravest, January 22, 2000):

There is one wonderful chapter where the consummate pragmatic speculator, the Great Winfield, is lamenting his performance problems in a wildly speculative bull market.

“My boy,” said the Great Winfield over the phone. “Our trouble is that we are too old for this market. The best players in this kind of a market have not passed their twenty-ninth birthdays. Come on over and I will show you my solution.”

So Adam Smith goes over and finds three new faces in the Great Winfield’s office. 

My solution to the current market,” the Great Winfield said. “Kids. This is a kids’ market. This is Billy the Kid, Johnny the Kid, and Sheldon the Kid.” The three Kids stood up without taking their eyes from the moving tape, shook hands, and called me “sir” respectfully.

“Aren’t they cute?” the Great Winfield asked. “Aren’t they fuzzy? Look at them, like teddy bears. It’s their market. I have taken them on for the duration.”

Winfield then describes how much money Billy the Kid is making in computer leasing stocks like Leasco Data Processing and Randolph Computer that he has heavily leveraged with bank borrowing....

And the really spooky bit, for me anyway, SHALE:

...Sheldon the Kid waved his hand for recognition.

“This one will really take you back,” said the Great Winfield. “Sheldon’s Western Oil Shale has gone from three to thirty.”

“Sir!” said Sheldon. “The Western United States is sitting on a pool of oil five times as big as all the known reserves in the world – shale oil. Technology is coming along fast. When it comes, Equity Oil can earn seven hundred and fifty dollars a share.

It’s selling at twenty-four dollars. The first commercial underground nuclear test is coming up. The possibilities are so big no one can comprehend them.”

“Shale oil! Shale oil!” said the Great Winfield. “Takes you way back, doesn’t it. I bet you can barely remember it.”

“The shale oil play,” I said dreaming. “My old MG TC. A blond girl, tan from the summer sun, in the Hamptons, beer on the beach, ‘Unchained Melody,’ the little bar in the Village.”

“See? See?” said the Great Winfield. “The flow of the seasons. Life begins again. It’s marvelous. It’s like having a son! My boys! My Kids!”

The Great Winfield had made his point. Memory can get in the way of such a jolly market, that malaise that comes with the instantly gone, flickering feeling of déjà vu. We have all been here before.

“The strength of my kids is that they are too young to remember anything bad, and they are making so much money they feel invincible,” said the Great Winfield.

“Now you know and I know that one day the orchestra will stop playing and the wind will rattle through the broken window panes, and the anticipation of this freezes us. All of these kids but one will be broke, and that one will be the multi-millionaire, the Arthur Rock of the new generation. There is always one, and maybe we will find him.”...MORE

And from the Electric Light Orchestra: 

Hold on tight (to your dreams)

"Fracking Eyeballs"

From Asterisk Magazine:

How an alliance between psychologists and advertisers at the turn of the 20th century taught us how to measure (and monetize) human attention.

Our eyes are worth money. We know that, now. It has become a commonplace that our “attention economy” is functionally an eyeball economy. But how did eyeballs come to look like dollar signs? Let’s dig into what we might think of as the original Faustian Bargain by which the sciences of human perception (with their sophisticated technologies of precision monitoring and measurement) cut a deal with those who move the money around. And I propose that we start here:

Figure 1: The face that wants to be seen (and to watch) 

 

This puzzling totem face (with its adjacent mini-me) greeted pedestrians on 125th street in Harlem back in the summer of 1925. The curious who meandered over to the shop window for a closer look were, quite without their knowledge, lab rats in an elaborate experiment being conducted by one Howard K. Nixon, a recent Ph.D. in psychology at Columbia University and a pioneer in the new field of “attention science” — specifically as it could be applied to the business of advertising. 1 

Indeed, depending on the day, it might be Howard K. Nixon himself peering out from behind the opaque cloth that constituted the nose, which was in fact a mask for what we might think of as the original “old school” surveillance capitalism. Here’s what was going on behind the scene: 

Figure 2: Behind those eyes — the psychologist’s booth 

What we are looking at is the hidden booth where the experimenter sat watching the pedestrians. But not just watching. Also “baiting,” since Nixon had developed various techniques for luring pedestrians to take a closer look at his little “trap window” (bracket these for now; they were goofy). When someone approached the window, the operator threw a lever that dropped a pair of magazine ads into place as the “eyes” in the “face.” Then a recording protocol went into effect, with the observer keeping track, by means of switches in a modified teletype device, of which advertisement held the eyes, and for how long. 

There is much to observe about this experimental set-up, and the series of investigations Nixon and his collaborators undertook with it. For instance, his use of the term “bait” to describe his efforts to get passersby to approach his experiment testifies to the crossing lines of ad-world tactics and behaviorist animal testing. It is impossible not to be struck — at least, if one happens to be a historian of the behavioral sciences — by the similarity between his recording apparatus (a vibrating “time reed,” continuously dipping in and out of a dish of mercury) and the core “kit” developed in Leipzig by Wilhelm Wundt, the progenitor of laboratory psychology in the late nineteenth century. 

At the same time, it is uncanny and odd that Nixon would build the front-facing display to look like a face and place the ads he wished to see people see in the position of the eyes. Nixon manifestly grapples, in laying out his experimental ambitions, with the awkward proximity of his science to the actual low-brow business of trying to advertise new products to a generally indifferent populace....

....MUCH MORE

Another Car Company Is Pursuing Humanoid Robots

So it's not just Tesla and the Chinese.*

This Toyota, I have heard of them.

From IEEE Spectrum, October 16:

Boston Dynamics and Toyota Research Team Up on Robots

The partnership aims to make Atlas into a general-purpose humanoid 

Today, Boston Dynamics and the Toyota Research Institute (TRI) announced a new partnership “to accelerate the development of general-purpose humanoid robots utilizing TRI’s Large Behavior Models and Boston Dynamics’ Atlas robot.” Committing to working towards a general purpose robot may make this partnership sound like a every other commercial humanoid company right now, but that’s not at all that’s going on here: BD and TRI are talking about fundamental robotics research, focusing on hard problems, and (most importantly) sharing the results.

The broader context here is that Boston Dynamics has an exceptionally capable humanoid platform capable of advanced and occasionally painful-looking whole-body motion behaviors along with some relatively basic and brute force-y manipulation. Meanwhile, TRI has been working for quite a while on developing AI-based learning techniques to tackle a variety of complicated manipulation challenges. TRI is working toward what they’re calling large behavior models (LBMs), which you can think of as analogous to large language models (LLMs), except for robots doing useful stuff in the physical world. The appeal of this partnership is pretty clear: Boston Dynamics gets new useful capabilities for Atlas, while TRI gets Atlas to explore new useful capabilities on.

Here’s a bit more from the press release:

The project is designed to leverage the strengths and expertise of each partner equally. The physical capabilities of the new electric Atlas robot, coupled with the ability to programmatically command and teleoperate a broad range of whole-body bimanual manipulation behaviors, will allow research teams to deploy the robot across a range of tasks and collect data on its performance. This data will, in turn, be used to support the training of advanced LBMs, utilizing rigorous hardware and simulation evaluation to demonstrate that large, pre-trained models can enable the rapid acquisition of new robust, dexterous, whole-body skills.

The joint team will also conduct research to answer fundamental training questions for humanoid robots, the ability of research models to leverage whole-body sensing, and understanding human-robot interaction and safety/assurance cases to support these new capabilities.

For more details, we spoke with Scott Kuindersma (Senior Director of Robotics Research at Boston Dynamics) and Russ Tedrake (VP of Robotics Research at TRI).

How did this partnership happen?

Russ Tedrake: We have a ton of respect for the Boston Dynamics team and what they’ve done, not only in terms of the hardware, but also the controller on Atlas. They’ve been growing their machine learning effort as we’ve been working more and more on the machine learning side. On TRI’s side, we’re seeing the limits of what you can do in tabletop manipulation, and we want to explore beyond that.

Scott Kuindersma: The combination skills and tools that TRI brings the table with the existing platform capabilities we have at Boston Dynamics, in addition to the machine learning teams we’ve been building up for the last couple years, put us in a really great position to hit the ground running together and do some pretty amazing stuff with Atlas.

What will your approach be to communicating your work, especially in the context of all the craziness around humanoids right now?

Tedrake: There’s a ton of pressure right now to do something new and incredible every six months or so. In some ways, it’s healthy for the field to have that much energy and enthusiasm and ambition. But I also think that there are people in the field that are coming around to appreciate the slightly longer and deeper view of understanding what works and what doesn’t, so we do have to balance that.

The other thing that I’d say is that there’s so much hype out there. I am incredibly excited about the promise of all this new capability; I just want to make sure that as we’re pushing the science forward, we’re being also honest and transparent about how well it’s working.

Kuindersma: It’s not lost on either of our organizations that this is maybe one of the most exciting points in the history of robotics, but there’s still a tremendous amount of work to do....

....MUCH MORE
*June 16
"Elon Musk predicts robots, not cars, are Tesla’s $20 trillion future" (TSLA)

 

August 9

"Chinese-made humanoid robots raise alarms in Congress: ‘Stealth army on our land’ "

August 19:

Robots: "Powered by Nvidia and AI, humanoid ambitions take shape" (NVDA; TSLA)

 

August 25:
In Addition To Nvidia, China Also Seems To Think There May Be Something To This Humanoid Robot Stuff
There was a big trade show, the World Robot Conference, in Beijing last week.

A couple of the stories...

"Uncanny Valley (I would say more, but I signed an NDA.)"

From n+1:

Morale is down. We are making plenty of money, but the office is teeming with salespeople: well-groomed social animals with good posture and dress shoes, men who chuckle and smooth their hair back when they can’t connect to our VPN. Their corner of the office is loud; their desks are scattered with freebies from other start-ups, stickers and koozies and flash drives. We escape for drinks and fret about our company culture. “Our culture is dying,” we say gravely, apocalyptic prophets all. “What should we do about the culture?”

It’s not just the salespeople, of course. It’s never just the salespeople. Our culture has been splintering for months. Members of our core team have been shepherded into conference rooms by top-level executives who proceed to question our loyalty. They’ve noticed the sea change. They’ve noticed we don’t seem as invested. We don’t stick around for in-office happy hour anymore; we don’t take new hires out for lunch on the company card. We’re not hitting our KPIs, we’re not serious about the OKRs. People keep using the word paranoid. Our primary investor has funded a direct competitor. This is what investors do, but it feels personal: Daddy still loves us, but he loves us less.

We get ourselves out of the office and into a bar. We have more in common than our grievances, but we kick off by speculating about our job security, complaining about the bureaucratic double-downs, casting blame for blocks and poor product decisions. We talk about our IPO like it’s the deus ex machina coming down from on high to save us — like it’s an inevitability, like our stock options will lift us out of our existential dread, away from the collective anxiety that ebbs and flows. Realistically, we know it could be years before an IPO, if there’s an IPO at all; we know in our hearts that money is a salve, not a solution. Still, we are hopeful. We reassure ourselves and one another that this is just a phase; every start-up has its growing pains. Eventually we are drunk enough to change the subject, to remember our more private selves. The people we are on weekends, the people we were for years.

This is a group of secret smokers, and we go in on a communal pack of cigarettes. The problem, we admit between drags, is that we do care. We care about one another. We even care about the executives who can make us feel like shit. We want good lives for them, just like we want good lives for ourselves. We care, for fuck’s sake, about the company culture. We are among the first twenty employees, and we are making something people want. It feels like ours. Work has wedged its way into our identities, and the only way to maintain sanity is to maintain that we are the company, the company is us. Whenever we see a stranger at the gym wearing a T-shirt with our logo on it, whenever we are mentioned on social media or on a client’s blog, whenever we get a positive support ticket, we share it in the company chat room and we’re proud, genuinely proud.

But we see now that we’ve been swimming in the Kool-Aid, and we’re coming up for air. We were lucky and in thrall and now we are bureaucrats, punching at our computers, making other people — some kids — unfathomably rich. We throw our dead cigarettes on the sidewalk and grind them out under our toes. Phones are opened and taxis summoned; we gulp the dregs of our beers as cartoon cars approach on-screen. We disperse, off to terrorize sleeping roommates and lovers, to answer just one, two more emails before bed. Eight hours later we’ll be back in the office, slurping down coffee, running out for congealed breakfast sandwiches, tweaking mediocre scripts and writing halfhearted emails, throwing weary and knowing glances across the table.

__________

I skim recruiter emails and job listings like horoscopes, skidding down to the perks: competitive salary, dental and vision, 401k, free gym membership, catered lunch, bike storage, ski trips to Tahoe, off-sites to Napa, summits in Vegas, beer on tap, craft beer on tap, kombucha on tap, wine tastings, Whiskey Wednesdays, Open Bar Fridays, massage on-site, yoga on-site, pool table, Ping-Pong table, Ping-Pong robot, ball pit, game night, movie night, go-karts, zip line. Job listings are an excellent place to get sprayed with HR’s idea of fun and a 23-year-old’s idea of work-life balance. Sometimes I forget I’m not applying to summer camp. Customized setup: design your ultimate work station with the latest hardware. Change the world around you. Help humanity thrive by enabling — next! We work hard, we laugh hard, we give great high-fives. We have engineers in TopCoder’s Top 20. We’re not just another social web app. We’re not just another project-management tool. We’re not just another payment processor. I get a haircut and start exploring.

Most start-up offices look the same — faux midcentury furniture, brick walls, snack bar, bar cart. Interior designers in Silicon Valley are either brand-conscious or very literal. When tech products are projected into the physical world they become aesthetics unto themselves, as if to insist on their own reality: the office belonging to a home-sharing website is decorated like rooms in its customers’ pool houses and pieds-à-terre; the foyer of a hotel-booking start-up has a concierge desk replete with bell (no concierge); the headquarters of a ride-sharing app gleams in the same colors as the app itself, down to the sleek elevator bank. A book-related start-up holds a small and sad library, the shelves half-empty, paperbacks and object-oriented-programming manuals sloping against one another. It reminds me of the people who dressed like Michael Jackson to attend Michael Jackson’s funeral.

But this office, of a media app with millions in VC funding but no revenue model, is particularly sexy. This is something that an office shouldn’t be, and it jerks my heart rate way, way up. There are views of the city in every direction, fat leather loveseats, electric guitars plugged into amps, teak credenzas with white hardware. It looks like the loft apartment of the famous musician boyfriend I thought I’d have at 22 but somehow never met. I want to take off my dress and my shoes and lie on the voluminous sheepskin rug and eat fistfuls of MDMA, curl my naked body into the Eero Aarnio Ball Chair, never leave.

It’s not clear whether I’m here for lunch or an interview, which is normal. I am prepared for both and dressed for neither. My guide leads me through the communal kitchen, which has the trappings of every other start-up pantry: plastic bins of trail mix and Goldfish, bowls of Popchips and miniature candy bars. There’s the requisite wholesale box of assorted Clif Bars, and in the fridge are flavored water, string cheese, and single-serving cartons of chocolate milk. It can be hard to tell whether a company is training for a marathon or eating an after-school snack. Once I walked into our kitchen and found two Account Mana­gers pounding Shot Bloks, chewy cubes of glucose marketed to endurance athletes.

Over catered Afghan food, I meet the team, including a billionaire who made his fortune from a website that helps people feel close to celebrities and other strangers they’d hate in real life. He asks where I work, and I tell him. “Oh,” he says, not unkindly, snapping a piece of lavash in two, “I know that company. I think I tried to buy you.”....

....MUCH MORE

Looking For A Place On The Water?

This one is for sale:

1900 Spindrift Dr
La Jolla, CA 92037

Off to the left is a private beach, something I thought was illegal in California but apparently not. [it's all about access - if you can get to it without trespassing, spread your beach blanket. Until high tide at any rate.] Here's more at SFGate, October 26:

For $108M, a California home that looks ready to fall into the sea

International Energy Agency: Southeast Asia Energy Report 2024

From the IEA, October 22, report launch press release:

Southeast Asia Energy Outlook 2024

The sixth edition of the IEA’s Southeast Asia Energy Outlook will explore the latest energy developments and trends in the region, whose influence over the global energy system is markedly increasing. It focuses on the countries that make up the Association of Southeast Asian Nations (ASEAN): Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic (Lao PDR), Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam...

....MORE

Executive Summary 

Overview and PDF download page, October 22:

About this report

The Southeast Asia Energy Outlook 2024 is the sixth edition of this World Energy Outlook Special Report, making Southeast Asia by far the most regularly updated regional outlook compiled by the International Energy Agency (IEA). This reflects the dynamism of the region, as well as the importance of the IEA’s partnership with the ten countries that make up the Association of Southeast Asian Nations (ASEAN) – Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic (Lao PDR), Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam.

The relationship between the Agency and this region is being further strengthened in October 2024 with the opening in Singapore of an IEA Regional Cooperation Centre during the Singapore International Energy Week (alongside the release of this report). This is the first IEA office outside its Paris headquarters....

....MORE

The report (200 page PDF):

https://iea.blob.core.windows.net/assets/ac357b64-0020-421c-98d7-f5c468dadb0f/SoutheastAsiaEnergyOutlook2024.pdf

Related, October 16:
International Energy Agency—World Energy Outlook 2024

"$1.80 dinners and budget clothes? The spread of frugality is hurting China’s economy"

Ah, our old pal Lord Keynes and his paradox of thrift.

From the Los Angeles Times, October 24:

TAIPEI, Taiwan — China’s 1.4 billion consumers once spent with enough abandon to help drive the global economy. Now one of the hottest topics on Chinese social media is how to save money.

“The main thing is just not to starve to death,” one video blogger advised in a post detailing how she subsisted on snack samples and free meals from temples and student canteens.

Another has gained a following in reviewing children’s meals that adults in Shanghai can eat on the cheap. “This is so economical,” she marveled over a $1.80 dinner. “They also included fried chicken.”

Other accounts tout $8 gym memberships and the merits of waiting for sales at fast-fashion clothing stores.

The tips appear to be working, as household savings have hit record highs. But experts say that’s bad news for the economy, because widespread scrimping is contributing to a dramatic slowdown in growth this year.

While the bigger factor is a worsening real estate downturn, which has eroded demand for commodities and diminished a crucial vehicle for household wealth and investment, economists say China’s economy is unlikely to recover without a rise in domestic spending. 

Hou Muhan, a 28-year-old modeling agent living in Shanghai, used to borrow money from her parents every month to cover her bills.

But this year, after they started asking her to pay them back, she began tracking her expenses and became much stricter about spending at bars or trendy restaurants.

“I noticed every time I exceed my budget it’s usually because I go for drinks,” she said. “Socializing usually costs money. This is something hard to avoid in Shanghai.”

Now she mainly cooks at home. On the rare occasions when she orders in, she divides the rice into three portions, freezing two to eat with other meals at home.

Chinese consumers are going through a “consumption downgrade,” according to an analysis of mobile payment data by Shanghai Pulse Data Technology Co.

At the beginning of last year, a typical Chinese lunch customer spent between $1.40 and $1.70 on a meal. By the end of July, that range dropped to $1 to $1.30 as many diners stopped ordering their noodles with pork in favor of egg or vegetables....

....MUCH MORE

Here's a scary picture:

Real estate agents wait for potential customers outside their Beijing offices in June 2014. 

China’s real estate downturn has eroded demand for commodities and diminished a crucial 

vehicle for household wealth and investment. (Andy Wong / Associated Press)

I have to imagine that ten years later people cross to the other side of the street to avoid this gang.

Previously on thrift, September 2022's:
Saving For Retirement, Zvi Bodie, and Keynes' Paradox

Following on the somewhat doomy and gloomy message of yesterday's "Who's Ready for a $5,814 Social Security Benefit Cut?" and "The Labor Shortage Will Get Worse and May Last for Decades" the rational reader might decide to heed the admonition of John Wesley, which we usually present in the context of being preferable to the split purpose found in ESG investing:

"Earn all you can, Save all you can, Give all you can"
—John Wesley Sermon 50, The Use of Money (1744)

The problem is, if everyone does it, defers spending, the economy will go into a depression.

So with Wesley thundering in our ears we visit William Bernstein at The Efficient Frontier, 2003. First though, our introduction to a 2010 piece that referenced Bodie v. Bernstein:...

And many others.

Is The Plan For The Australia - Singapore Power Cable Dead Or Alive?

Our last post on Schrödinger's extension cord was January 2023's "Solar: The Plan For The World's Longest Extension Cord (Australia to Singapore) Is Dead":

We've been following this one for a while, some links below.

From Singapore's Straits Times, January 20:

 Sun Cable sale process to start by end-Jan, say administrators 

SINGAPORE – The voluntary administrators of Sun Cable, the company planning a renewable energy power link between Australia and Singapore, held its first meeting of creditors on Friday, just over a week after the firm entered into administration.

In a statement, FTI Consulting said the process to commence the sale of Sun Cable would start before the end of January and could take three months. The meeting sought funds to allow the company to continue in business while its future is being decided.

Sun Cable entered voluntary administration on Jan 11 amid disputes among its main investors, Australian billionaire Andrew Forrest and Sun Cable chairman Mike Cannon-Brookes, over the viability of sending solar power via a 4,200km cable from Australia’s Northern Territory to Singapore....

....MUCH MORE 

Here's the latest via Singapore's Channel News Asia, October 22:

Singapore grants conditional approval for Sun Cable to import 1.75GW of electricity from Australia
The project to transmit solar power from Australia to Singapore has been revived more than 20 months after Sun Cable went into voluntary administration.

Singapore has granted conditional approval to Sun Cable to import 1.75 gigawatts (GW) of low-carbon electricity from Australia to Singapore.

The imported electricity is expected to harness solar power from Australia's Northern Territory and will be transmitted via new subsea cables measuring 4,300km, said the Energy Market Authority (EMA) on Tuesday (Oct 22).

Sun Cable said its US$13.5 billion solar project in Australia, the Australia-Asia PowerLink, is set to be the "world’s largest solar farm and battery storage infrastructure".

The amount of renewable energy imported represents about 9 per cent of Singapore’s total electricity needs, the company added.

EMA said: "The conditional approval awarded to Sun Cable recognises that the project can be technically and commercially viable based on the proposal and information submitted thus far."

This will provide the company with the support to continue to develop the project, which is expected to start after 2035.

Sun Cable must update its proposal to meet EMA's conditions before the project can be considered for a conditional license....

....MUCH MORE

Here is the EMA's announcement:

https://www.ema.gov.sg/news-events/news/media-releases/2024/ema-grants-conditional-approval-of-one-point-seven-five-gigawatts-of-electricity-imports-from-australia 

One of our earlier posts:

September 2021
Solar Power Export Cable From Australia to Singapore Gets Indonesia's Okay
Both Singapore and Indonesia have to be a bit concerned that dealing with Australia means dealing with a police state so here's hoping they get some sort of indemnification for said dealings....

That was me attempting to make light of Australia's covid restrictions. Reading it now I realize it was funnier in my head than on the page.... 

"Why do Russian oil bosses keep dying?"

Following on October 21's "Russian Oligarch (former V.P. of Yukos) Found Dead in Moscow after Falling Out of Window", we see this at The Week, October 22:

There have been 'at least 50' mysterious deaths of energy company executives since Putin ordered Ukraine invasion 

Another prominent Russian businessman has died under mysterious circumstances after apparently falling out of a window, the latest in a string of similar unexpected deaths among Russian energy executives.

Mikhail Rogachev, the former vice-president of Yukos – once one of Russia's foremost oil and gas companies – was found dead at the entrance to his home in Moscow over the weekend. He was reportedly discovered by an employee of Russia's foreign intelligence agency, the SVR, with injuries characteristic of a fall. The Russian state news agency said the 64-year-old, who lived on the tenth floor, had died by suicide. Police are reportedly "studying" a suicide note, said The Times.

But these reports have been "vehemently" denied by Rogachev's relatives, said the Daily Mail. They insist there were no signs that Rogachev was suicidal, and that he was in a "good mood" before his death.

Unexplained tragedies
There have been "numerous" unexplained deaths of prominent Russians since Vladimir Putin ordered the invasion of Ukraine in 2022, said Newsweek. Unusually for a Russian company, Lukoil (Russia's second-largest oil producer) publicly criticised the invasion. The company's board of directors expressed "its deepest concerns about the tragic events in Ukraine" in a statement.

In May, former top Lukoil manager Alexander Subbotin died under "mysterious circumstances". The 44-year-old was found dead "in the basement of the home of a shaman", after allegedly suffering a heart attack from consuming toad poison, according to state-run Russian news agency Tass. The billionaire went to the shaman's home "in a state of severe alcoholic and drug intoxication" the day before his death, Tass reported, and his body was seemingly used for "Jamaican voodoo rituals".

In September, Ravil Maganov, the chairman of Lukoil, was found dead after falling from a hospital window in Moscow. But Lukoil said Maganov, 67, had died "after a serious illness", but did not reference his alleged fall – which "raised eyebrows among Russia watchers in the West", said The Independent.

In October 2023, Maganov's replacement Vladimir Nekrasov died aged 66 – allegedly from acute heart failure. The following month, Vladimir Lebedev, a senator with close ties to Lukoil, died in an unexplained "terrible tragedy", aged 60. Vitaly Robertus, the vice-president of Lukoil, died "suddenly" at the age of 54 in March this year. The cause of his death remains unknown.

Multiple businessmen linked to Gazprom, the world's largest publicly listed gas company, also "died under mysterious circumstances" either during the build-up to, or the immediate aftermath of, the invasion. In two cases the executives' wives and children were found "gruesomely hacked to death".

Since Gazprom transport chief Leonid Shulman was found dead in his bathroom near St Petersburg, just before the invasion, there have been "at least 50 deaths that could be classified as suspicious", said The Times. Alexander Tyulakov, a 61-year-old executive at Gazprom, was found dead in the garage of his St Petersburg home the morning after Russia invaded Ukraine....

....MUCH MORE

Cui bono?

"The art of stealing: The tragic fate of the masterpieces stolen from Rotterdam" (Picasso, Matisse, Gauguin, Meijer de Haan, Freud and two Monets)

From one of the older (predecessors) newspapers in The Netherlands, NRC:

Olga is on her own. Her son is in prison, being held on suspicion of having committed what they are calling on television ‘the art theft of the century’. She knows that the accusation is correct. Along with friends, her son Radu stole seven valuable artworks from a museum in Rotterdam, loaded them into a car and drove them to Romania.

There, in Carcaliu, a remote village at the poor south-eastern tip of the country, Olga stands in front of the heating stove in the bathroom. A short while ago she lit the fire then stepped out into the biting cold, making her way to the small graveyard opposite her house where, in the dead of night, she dug up the paintings and brought them back inside.

Picasso, Gauguin, Matisse, Monet, Meijer de Haan and Freud. On television they are talking about a loot worth hundreds of millions of euros. The amount is not important to her. The pictures are evidence against her son and destroying the evidence seems like the only way she can help him.

The artworks go up like tindersticks.

*****

Early in the morning of 16th October 2012, seven valuable artworks were stolen from the Kunsthal in Rotterdam. The theft was world news. But what first seemed like a sophisticated burglary by professionals, turned out to be the work of a few small-time Romanian criminals who had no idea what they were getting themselves into. They knew about house burglaries, not art, and they certainly didn’t know about selling art.

This is the story of the Kunsthal robbery, based on the case files and conversations with those involved.

The alarm
Jan Moerer is first awoken by the sound of his mobile telephone ringing, then his landline. It is 04:28 in the morning. The Kunsthal’s production manager gets out of bed but is twice too late to pick up. The missed calls are from colleague Gert-Jan Knoll, the building supervisor. He calls him back.

An alarm has gone off. Paintings may have been stolen.

Half an hour later, Moerer is walking through the building with two security guards. The Van Gogh is the first thing he sees as he enters the exhibition space. Still Life with Cornflowers and Carnations, one of the Triton collection’s key pieces, is still where it should be. It is a painting of an exuberant bouquet of flowers that Van Gogh painted in 1887, a blue vase with blue cornflowers against a blue background. Jan Moerer is relieved.

Then they turn the corner. Seven empty spaces.

he Kunsthal, literally meaning ‘art hall’, on the periphery of the Rotterdam city centre does not have its own collection and isn’t really a museum in the traditional sense of the word. The Kunsthal is dependent on artworks loaned by other art galleries and private collectors. Each year, 160,000 people visit the temporary exhibitions set up in three large rooms, collectively a space of 3,600 square metres.

At the Kunsthal there are no security guards at night – cameras and alarms do all the work. Mobile guards from the security company Trigion can be on the scene in twenty minutes if the alarms are triggered. The police are alerted too.

That night, Mehmet Karadurdu and Jordy Rook are driving through a rainy Rotterdam on their inspection rounds of the various companies that buy into Trigion’s services. At 03:20 they get a call from the control room. A burglar alarm has gone off at the Kunsthal on the Westzeedijk. Their PDAs show them the quickest route to the building. When they arrive eleven minutes later, the police are already on the scene. It had taken the officers just five minutes to get to the Kunsthal.

The Kunsthal is a labyrinthine building full of glass partitions, which signalled architect Rem Koolhaas’s international breakthrough. It is constructed so that some of the works are visible from the outside, like a kind of showroom. When they arrived, the policemen walked around the outside of the eccentric building. They didn’t notice that any of the paintings were missing. They were primarily looking for signs that would point to a break-in. There aren’t any, they tell the newly-arrived Trigion security guards. The officers ask whether they need to stay. No, if there are no signs of a break-in, they can go, the guards tell them. Nine times out of time it’s just a false alarm....

....MUCH MORE

CIA: "Creating the Future of Intelligence with DDI"

From the U.S. Central Intelligence Agency: 

Imagine you’re a CIA officer working overseas in an authoritarian country. You used to be able to stay under the radar of the local security services by meeting with your contacts in discrete locations. But lately, it’s becoming harder and harder to maintain that secrecy. Now there are hundreds of devices that know where you are every time you step outside. There are cameras on every street corner connected to the foreign government’s facial recognition software.

Even if you’re using the most sophisticated tradecraft, this world of ubiquitous surveillance and digital tracking can still present tremendous threats to you and, more importantly, your sources—the very people you’ve promised to keep safe as they risk their lives to provide critical information to the U.S. Government. Yet, the intelligence you and your sources provide is combined with vast amounts of unclassified, open source data back at Langley. What normally would have taken weeks or even months to triage can now be analyzed in a fraction of the time, because your colleagues now utilize the latest in data science and AI technologies to help sort and make sense of all the information.

This is the challenge, and promise, of digital technology. It can both help and hinder CIA’s mission, because emerging technologies are at once both a strength and a vulnerability. The same tools that have changed our everyday lives are also changing how CIA collects and protects intelligence. Digital technology is disrupting the world of spycraft.

On the Cutting Edge of Technological Innovation

CIA created the Directorate of Digital Innovation (DDI) in 2015 in response to our growing need to understand, utilize, and respond to emerging digital technologies. DDI brought together the Agency’s missions of cyber collection and security, open-source intelligence, data science, information technology, and so much more—basically the 1s and 0s of our mission. These technologies are increasingly essential for CIA’s success in a world of ubiquitous sensing, growing cyber threats, and the exponential increase in data.

While we can’t share too many details on our latest technological developments, we are constantly innovating and looking at how we can utilize modern technologies in a new light.

Some of CIA’s most pressing challenges—seemingly limitless sources of disinformation, the rise of authoritarian regimes, and dangerous conflicts—all share a common thread: the use of digital technology to expand the reach and impact of these activities.

Emerging technologies also provide CIA with incredible opportunities. For instance, Artificial Intelligence can help officers make sense of a tsunami of information—triaging data faster than any human could alone, while gleaning greater insights from a mixture of open source (OSINT) and clandestine intelligence collection.

Let’s explore some of the exciting challenges inherent in building a new digital ecosystem in what might be the most unique working environment in the world....

....MUCH MORE