Saturday, May 26, 2018

"‘Crush Them’: An Oral History of the Lawsuit That Upended Silicon Valley"

From The Ringer, May 18:

Twenty years ago, Microsoft tried to eliminate its competition in the race for the future of the internet. The government had other ideas.
Nineteen-ninety-eight changed the course of technology, which is to say that it changed the course of history. A nearly bankrupt relic of ’80s tech nostalgia released a gumdrop-shaped PC called the iMac. An innovative search engine originally known as BackRub became a company with an even stranger name. A fast-growing online bookstore hatched a plan to start selling, well, everything.
In hindsight, these were tectonic shifts, but they hardly registered as tremors compared to the earthquake emanating from Washington, D.C. On May 18, 1998, the U.S. Justice Department and 20 state attorneys general filed an antitrust suit against the most powerful tech company in America: Microsoft.

The then-23-year-old giant, which ruled the personal computer market with a despotic zeal, stood accused of using monopoly power to bully collaborators and squelch competitors. Its most famous victim was Netscape, the pioneering web browser, but everyone from Apple to American Airlines felt threatened by late-’90s Microsoft. The company was big enough to be crowned America’s most valuable firm, bold enough to compare attacks on its domain to Pearl Harbor, and, eventually, bad enough to be portrayed as a (semifictionalized) cadre of hypercapitalist murderers in a major motion picture. The “don’t be evil” optics that colored the rise of today’s tech giants (and have recently lost their efficacy) were a direct response to Microsoft’s tyrannical rule.

To say history is repeating itself isn’t quite accurate, but in recent times we’ve seen a former tech wunderkind dragged in front of Congress, a raft of Hollywood productions casting our handheld gadgets as a bridge to dystopia, and a chorus of calls for the tech giants to be dismantled by the government. This is not the kind of ’90s nostalgia the titans of the internet had in mind.
Giants always fall, eventually. Microsoft may have simply been too bloated by the turn of the century to outflank more nimble competitors like Google and Apple. But there’s still considerable debate about whether it was the government lawsuit that nudged the company into an abyss of late-to-the-party products such as the Zune MP3 player and the Bing search engine. Microsoft never would have thought of these ideas first, but absent government intervention, it might have devised ways to eliminate the companies that did. “Because of antitrust enforcement, that’s why we have Google,” says Gary Reback, a well-connected antitrust lawyer who represented Netscape in the ’90s. “There is no other reason.”

And yet it’s only because Google has become so Microsoft-like in its dominance that the 20-year-old case still resonates. (Amazon and Facebook have also been accused of monopolistic tendencies.) In a world where a handful of companies control much more of our data than Windows 95 ever did, it’s an open question how much this famous case really accomplished. Our current tech overlords may be doomed to repeat the transgressions of the Microsoft era — some antitrust watchers believe they already have. “One of my theories about antitrust is it goes in cycles,” says Stephen Houck, one of the government lawyers who took the deposition of Microsoft founder Bill Gates. “Microsoft or some other tech company gets very successful, they make a lot of money, and they tend to get arrogant and think they know more than the government.”

Just how similar were Microsoft’s actions two decades ago to what’s going on today? And how critical was the government’s lawsuit to unseating Microsoft from its perch of power to make room for a new crop of innovators? On the 20th anniversary of the filing of the Justice Department’s suit, we asked the lawyers who tried the case, the competitors who found themselves under Microsoft’s heel, and the journalists tasked with making sense of it all to recount tech’s most important legal battle, in their own words. (A representative from Microsoft did not respond to requests to participate in this project. All titles refer to roles interviewees held at the time during which the story takes place.)

I. The 800-Pound Gorilla
By the mid-’90s, Microsoft had become the dominant player in tech, with its Windows operating system powering 90 percent of personal computers and its Office suite the standard in workplace software. The Redmond, Washington–based company cast a pall over innovation in Silicon Valley, until a well-funded startup called Netscape invented a way to bring the internet to the masses.

Gary Reback (antitrust lawyer representing Netscape): The tech industry in the United States had always been monopolized by a company. First it was AT&T, then it was IBM, then it was Microsoft. … Their basic dominance was almost a suffocating dominance. There wasn’t a feeling that there was anybody that would or could compete with them from Silicon Valley.
Steven Levy (senior editor, Newsweek): It was widely known that venture capital funds wouldn’t fund you if you were going to go into an area where Microsoft was involved.
Jon Mittelhauser (founding engineer, Netscape): Software was this large process that big companies did that they sold on the shelves at brick-and-mortar stores. Because of that, there weren’t very many of them and frankly there was really only one, and it was Microsoft. They had pretty much swallowed everybody else. There was this long history of the first word processor that got traction was WordPerfect, and it got killed by Microsoft Word. And the first spreadsheet was Lotus and it pretty much got killed by Microsoft Excel. Any company that was successful that was doing software basically had two options — one was Microsoft copied what you did and did it better and got a business, [or] two was you got bought by Microsoft. They were the 800-pound gorilla.

Mittelhauser was one of several University of Illinois students who helped code Mosaic, the first popular web browser, while working at the National Center for Supercomputing Applications. The project was led by Marc Andreessen, who would go on to become the cofounder of Netscape and the prominent venture capital firm Andreessen Horowitz. Andreessen and the Mosaic team recognized early on that what they were building could one day usurp Windows.

Mittelhauser: When the first version of Mosaic came out, it was one of those things that, for lack of a better term, kinda went viral. Mosaic exploded across all of what the internet was at that point, [at] universities and research institutes. And because we were just stupid kids who didn’t really know what we were doing, it was buggy as hell. But we didn’t really care because we just put up new versions every other day.

Levy: Andreessen, his confidence was unparalleled. He teamed up with Jim Clark, who was an experienced entrepreneur from Silicon Graphics. The first time I talked to him, he was talking about how the web would be the next operating system. It was a template for the future of unlimited ambition by internet entrepreneurs, like [Jeff] Bezos and the Google people and even [Mark] Zuckerberg later on. He was young, but no one was gonna tell him that he couldn’t rule the world.

Mittelhauser: Marc and Jim flew out, met the rest of the team, and hired us on the spot. … This was in April of ’94. My plan at that point had been to spend the summer working on a master’s thesis, but instead I basically wrote a master’s thesis in two weeks in May. May 2nd of ’94 we opened the door to the first office. At some point later in May I graduated, as far as I know. I wasn’t there. I was heads-down building Netscape.

Steve Lohr (technology and economics reporter, The New York Times): It was the pioneering commercial browser. Marc Andreessen famously said what they wanted to do was reduce Windows to a buggy set of device drivers underneath the browser, which would be the new top player that people would see and interact with. Microsoft wasn’t thrilled about that.

Levy: Out of nowhere, it was the hot company. Andreessen posed barefoot on the cover of Time. This was something that was alien to people back then. Even Bill Gates wore shoes....
...MUCH MORE, including that picture of Andreessen with hair.

"When the Movies Went West"

Los Angeles in 1910 was a pretty happening place.

From Longreads, May 15:

When the Movies Went West
Scorned by stage actors and mocked by the theater-going upper classes, filmmakers nevertheless developed a bold new art form — but they needed better weather.
Gary Krist | Excerpt adapted from The Mirage Factory: Illusion, Imagination, and the Invention of Los Angeles | Crown | May 2018 | 14 minutes (3,681 words
Toward the end of 1907, two men showed up in Los Angeles with some strange luggage in tow. Their names were Francis Boggs and Thomas Persons, and together they constituted an entire traveling film crew from the Selig Polyscope Company of Chicago, one of the first motion picture studios in the country. Boggs, the director, and Persons, the cameraman, had come to finish work on a movie — an adaptation of the Dumas classic The Count of Monte Cristo — and were looking for outdoor locations to shoot a few key scenes. As it happened, the harsh midwestern winter had set in too early that year for them to complete the film’s exteriors in Illinois, so they had got permission to take their camera and other equipment west to southern California, where the winters were mild and pleasant. Since money was tight in the barely nascent business of moviemaking, the film’s cast could not come along. So Boggs intended to hire local talent to play the characters originated by actors in Chicago. Motion pictures were still such a new and makeshift medium that audiences, he figured, would never notice the difference.

In downtown Los Angeles, they found a handsome if somewhat disheveled young man — a sometime actor who supplemented his income by selling fake jewelry on Main Street — and took him to a beach outside the city. Here they filmed the famous scene of Edmond Dantès emerging from the waves after his escape from the island prison of the Château d’If. Boggs had a few technical problems to deal with during the shoot. For one, the jewelry hawker’s false beard had a tendency to wash off in the Pacific surf, requiring expensive retakes. But eventually the director and Persons got what they needed. After finishing a few more scenes at various locations up and down the coast, they wrapped up work, shipped the film back to Chicago to be developed and edited, and then left town.
A year and a half later, on the morning of May 6, 1909, a former stage actor named Hobart Bosworth was sitting in his office at the Institute of Dramatic Arts, a small acting school on South Broadway that he had opened the previous January. Now forty-one years old, Bosworth had been a well-known thespian, but a lifelong struggle with tuberculosis had ruined his once rich and resonant voice. He had been forced to quit his job with the local Belasco theater company and resort to teaching the skills he’d once practiced. But although his name was still respected in L.A. theatrical circles, the school he’d founded was, by his own admission, “not a tremendous financial success,” and he found himself chronically strapped for cash.

On this pleasant Thursday morning, Bosworth received a visit from “a quiet gentleman in fashionable clothes” who identified himself as James L. McGee, business manager of the Selig Polyscope Company. McGee and director Francis Boggs were in town to make some motion pictures. (The owner of the company, Colonel William N. Selig, had apparently been pleased with the results of the Monte Cristo film released the previous year.) Would Mr. Bosworth be interested in performing the lead role in one of them?
McGee was persistent. No one, he insisted, would ever know that Bosworth had taken the job. The picture would be shown only in little Main Street nickelodeons, where his friends would never set foot.
Bosworth, a rather proud Shakespearean specialist who claimed to be a descendant of Miles Standish, found the question outrageous. “I was shocked,” he later wrote, “and insulted and hurt by turns.” He told McGee that he barely knew what a motion picture was, having seen only one — a film of the Jeffries-Sharkey boxing match of 1899. He had not been tempted to see any others, let alone act in one. Indeed, Bosworth felt sure that his old New York theatrical manager “would turn over in his grave were he to feel that I had debased my art so completely.”

But McGee was persistent. No one, he insisted, would ever know that Bosworth had taken the job. The picture would be shown only in little Main Street nickelodeons, where his friends would never set foot; Bosworth’s name would never be used in association with the production. And then McGee mentioned what the actor would be paid: $125, for two days of work.

“Alas, my code of ethics fell before the onslaught of Capital,” Bosworth admitted. “The prostitution of art began then. I was the first to fall.”...

Star Wars as Told By Ken Burns

With the opening of Solo: A Star Wars story, it's time for a look back.
From the Washington Post, December 2015 (i.e. four movies ago):

Inside Jeff Bezos’ DC Life

From Washingtonian, April 22:
The Amazon founder and Washington Post owner has quietly become a freewheeling DC socialite—and soon he'll be spending more time here, in the mammoth Kalorama home his family is renovating. What brought the tech giant to town in the first place? And what does he do, exactly, while he's around? The story of how the world's richest man is becoming a Washingtonian.

Late one drizzly night this past January, Jeff Bezos strode through the front door of the Jefferson hotel, burnished from an evening spent consorting with the Washington power set and smiling in plain view. This year, the Amazon founder, who is worth more than $110 billion, became the richest person alive. Here at the Jefferson, around 11:30 pm on a Saturday, a flicker of his unstudied private life appeared.
Bezos wore blue jeans and a teal vest, the approximation of an Eddie Bauer model, and across his cocked elbow, his wife, MacKenzie, dangled two palms with practiced ease. His security detail, for which Amazon pays $1.6 million a year, was nowhere in sight. The wealthiest man on earth appeared simply to have walked up 16th Street, untroubled by courtiers and well-wishers (or the occasional protester). A brood of ruddy-faced tourists, who collected and dispersed in the hotel lobby, would not pirouette as the couple sliced through their gaze. Actually, no one offered so much as a glance. When I alerted the concierge to the whiff of celebrity in our midst, the young woman cocked a quizzical eye across the table: “Who’s Jeff Bezos?”
Soon we’ll all know him. You may even bump into the man. Just as Bezos has busied himself pushing his Seattle company to new feats, the inventor of the “everything store” has been quietly moonlighting in a town that, friends say, he views as an everything city—a delta of diplomats and techies, military engineers and journalists, powerbrokers and problem solvers, a mélange perfectly suited to the tinkerer’s heterodox taste. Confidants report that Bezos spends more time in Washington than in any other city outside of Seattle—ten trips a year, give or take—and for good reason. Not content merely to own the local newspaper, the retail guru has become the owner of the largest home in DC. In 2016, he bought the former Textile Museum, a 27,000-square-foot mansion in Kalorama, and last year he began a massive renovation and expansion—the plans for which foretell the ambitiousness of the life he intends to have here. All of this prefigures the question of whether Amazon will bring its new headquarters—HQ2, in the parlance of the 20 municipalities vying to win it—to Washington, too.
Bezos is attracted — like a moth to light — to Washington.
“What he’s going to do is revive the legacy of Kay Graham and her great socializing—bringing smart, interesting people together in a social context,” says Jean Case, referring to the late Washington Post publisher. Case and her husband, Steve, the cofounder of AOL, have been friends with the Bezoses since the mid-’90s. Over breakfast in front of the fireplace at the Cases’ home earlier this year, Bezos described his plans. “That’s how they see this house that they’re renovating in Kalorama,” Case says. “They’ll really use it as a magnet of smart, interesting people from all walks.”

It makes sense that a billionaire with numerous interests before the federal government might resurrect Graham’s fabled salons—to some, an artifact of a time when politics was supposedly less blood sport. Yet Bezos also owns homes in Beverly Hills, West Texas, and New York. His infatuation with the nation’s capital provokes its own riddle even among those who know him. “It’s a bit of a mystery to me—whether he has political ambitions or thinks he needs to be on the right side of Washington, for Amazon,” one friend of the Bezos family admits. Yet “Bezos is attracted—like a moth to light—to Washington.”

Conversations with more than 40 people in or around Bezos’s circle offer some insight into what brings his jet to town and what he does when he gets here—a curiosity that Washingtonians (and Bezos’s employees and politicians and HQ2 speculators) are all eager to unspool. Given our city’s infamous weakness for celebrity, the predictable scramble to receive him will etch itself into the history of this town—perhaps as much as the man will himself.

Bezos’s January visit to the Jefferson came on the night that the Alfalfa Club, of which he is a member, convened its annual gathering. Formed in 1913, Alfalfa is Washington’s private confab of the economic and political elite. (An unofficial motto I heard while observing the promenade: “One long guest list, one-fourth our GDP.”) At this year’s dinner, Bezos was flanked by Patty Stonesifer—who serves on Amazon’s board and directs the DC nonprofit Martha’s Table—and billionaire fashion designer Tory Burch.
Bezos might have had his eye on a few other dignitaries, too: At the foot of the Capital Hilton’s grand staircase, he appeared to exchange pleasantries with Chris Dodd—former head of the Motion Picture Association of America, a man who has no small insight into Amazon’s fortunes in movie streaming. Elsewhere mingled Defense Secretary James Mattis, who, the Pentagon has acknowledged, receives individual advice from Bezos from time to time. Mattis’s regulatory sway over Bezos’s rocket company, Blue Origin—which plans to pursue national-security launch contracts—was important enough for Bezos to host him in Seattle last year. A few tables away sat attorney general Jeff Sessions, who thus far has demonstrated a mercurial attitude toward antitrust policy, a verboten notion at Amazon these days.
That’s definitely a different Bezos from what we saw here
Currying favor, though, seems not to have animated Bezos’s outings to date. To the surprise of most who work there, Bezos hardly sets foot in Amazon’s Washington office. Instead, insiders say it’s the Post and Blue Origin that exert the most pull, as well as a smattering of awards and public events. Trips, generally by way of his G650 Gulf­stream jet, typically last one or two days; he stays in fashionable hotels—the Jefferson, the St. Regis, the Four Seasons—and holds court at the most popular Washington canteens: Cafe Milano, Le Diplomate, Minibar, Fiola Mare. Perhaps less predictably, he’s known to eschew his security detail at times.

About three years ago, Bezos began presiding over small gatherings—typically over dinner, and something of a hybrid between cocktail-hour chatter and a TED Talk colloquy. Attendees saw a lesser-known side of the tech mogul: Jeff Bezos the host, the cocktail enthusiast, the busy father.
Friends suggest it was through these encounters that Bezos grew to think of the city as an enthralling crossroads. “Part of the appeal to DC in general to Jeff is that it’s much more vibrant and diverse than it used to be,” says one person familiar with his thinking. “It’s not just a government/journalist town anymore.” As the region began to exude the trappings of concentrated wealth—higher rents, flashier restaurants, tech arrivistes content to shout their success—Amazon’s CEO kept finding more reasons to visit....MUCH MORE
Recently on Mr. B:

"Jeff Bezos on breaking up and regulating Amazon" (AMZN)
"How does the world’s richest man renovate? Floor plans reveal Jeff Bezos’ big ideas for $23M D.C. mansion"
Jeff Bezos Letter to Amazon Shareholders (including 1st disclosure of Amazon Prime membership #'s and perfect handstands)
"Jeff Bezos Gave a Sneak Peek Into Amazon’s Future" (AMZN)
Cloud Computing: The Pentagon Is Going To Award a Contract Worth Up to $10 Billion, Amazon Wants It, So Does Google (AMZN, GOOG)

Jeff Bezos Will Probably Consolidate His Power Bases In The Washington D.C. Area (AMZN)
...Additionally the new location is (relatively) near CIA headquarters which is handy as Amazon is becoming quite the little spy contractor.
Also at Business Insider, Nov. 2017:
Amazon is launching a 'Secret' cloud service for the CIA
  • Amazon Web Services introduced Secret Region, a new service specifically for the CIA and the rest of the intelligence community.
  • It's not really a secret service: It's name just indicates it can handle data that's been classified at the "secret" level.
  • Amazon has offered the CIA a Top Secret Region since 2014 as part of a $600 million deal.
  • The extension of that older CIA deal with this new Secret service underlines the market dominance of AWS.
And, as noted on the map above, the possible location is also conveniently close to Mr. Bezos' house, although in his case the choice is not as clear-cut as when then-head of supercomputer manufacturer Cray Research when asked where the company might relocate its headquarters answered: "Draw a circle with a twenty mile radius around the CEO's home."

Mr. Bezos owns five houses and 300,000 400,000 acres in Texas.
That gets us back to March 31, 2018. For More, or for AMZN, use the 'search blog' box, top left.

Friday, May 25, 2018

How to Think Medieval: Seeking Endarkenment

Over the years we've mentioned a half-dozen of Barbara Tuchman's books, I'll repost a favorite passage after the jump but first, a review of her "A Distant Mirror: The Calamitous 14th Century" used as an introduction to a sweet little post that proves up the enduring insight of the first line of L.P. Hartley's The Go-Between:

“The past is a foreign country; they do things differently there.”

From Coins and Scrolls:

Thinking Medieval - Seeking Endarkenment
In his hilarious and angry review of one of my favorite books, Barbara Tuchman's "A Distant Mirror", Patrick Stuart has some choice words for 14th century nobility, starting with the title; "A Bunch Of Fucking Idiots". Here are a few more quotes.
[Enguerrand de Coucy] is mainly a hero by virtue of not being an insanely stupid flaky deluded murderous narcissist. Although he is murderous, and a bit of a narcissist, but hes not insanely stupid or flaky and in fourteenth century Europe that puts him in about the top 5% of dudes with swords.  
...the entirety of the ruling class subscribes to an insane Chivalric cult which, not only do most of them not really follow, but, even when they do follow it, it doesn't work... 
Lists of insanity like the one above, are not rare in 'Distant Mirror'. 
Over and over, in the classic arm-waving despair of someone encountering Tuchman's idol-demolishing, beautiful, brutal, and sharp writing, Patrick resorts to "insanity" as an explanation for excesses and failures of the 14th century nobility.

Sadly, he's wrong.

Très Riches Heures du Duc de Berry

What Is Insanity? 
The best we can come up with for a definition is "abnormal mental or behavioral modes". It's not insane to cut down a tree, drag it into your house, and cover it with candles, provided you do it near Christmas and not in June. It's not insane to to pray; it might be insane to pray to Barbra Streisand. The community defines "normal", with a bit of wiggle room.

Here's an early modern example, right when the world seemed to start to make sense. It might seem insane to us that George Spencer, a troublesome one-eye old servant in Connecticut, was tried and executed in 1642 for the crime of bestiality after a one-eyed pig was born in his village. It might also seem insane that both the pig and his own retracted confession were called as the two witnesses required to convict him. But by the standards of the community and the times, the only insane person was that godless trouble-making pig-fucker, George Spencer.

The Nature of the World 
We live in an enlightened era. Our mental toolboxes are full to bursting with evidence-based reasoning, with precedent, with doubt, and with logic. We hold many truths to be self evident. We stand on the shoulders of intellectual giants and we think this plain of shoulders is ground level.

If you want to think medieval, chuck your entire toolbox out the window and start from scratch. You need to un-learn rationality, un-learn concepts you've been steeped in since childhood. It's the opposite of a koan. Seek endarkenment.

Part 1: Forget
-Science. Almost all of it. 

-Medicine too. First aid you can keep, but everything else must be swept away. 

-Equality. A dangerous, almost unthinkable concept in practice. A fine ideal, when paired with religion, but not one you have to worry about. 

-Matter. Forget that stone and flesh are made of the same kind of thing (atoms). Think of each thing as a distinct entity, not as a changed form of an existing substance. 

-Weather. It's scary and unpredictable now, and we have radar and satellites.

-Foreigners. I can read about far-away places in a book or look up a street-view picture of a city on the other side of the world. I live in a multicultural city. I'm not so much tolerant as apathetic, but that's good enough (and might even be better; tolerance implies tension). Anyway, forget all that. Ignorance and fear all around. 

-The Theory of the Mind. Forget the subconscious. Forget hormones and the effect of diet, head wounds, and sleep. 

-Progress. The medieval thinker knows there is a better world; they'll go there after death, probably. Don't worry about this one, and certainly don't try to change it.

Part 2: Remember
Do you remember elementary school? Do you remember how important your school supplies were? Do you remember the almost magical power of a marker, or a pair of scissors, or a shiny new pencil case, or a lunchbox? How deeply an insult could wound?

Take that feeling of importance and apply it to everything....

In 2017's "Back When I Had The Ability To Tell A Story—'Europe: Media Face Fines for Improper Use of 'Great Britain'" we saw something that may have been a trial run for today's roll-out of GDPR:

Apparently with the activation of Article 50 the Slovaks can no longer use the term "Great Britain."
Henceforth it's "Pretty Good Britain"....

... The "Pretty Good" line is not original to me.

Some years ago I worked with a Moroccan guy named Raissoulli and upon meeting him asked if he was related to Mulai Ahmed er Raisuli, the turn of the 20th century kidnapper and brigand known in some parts of the territory between the Atlas mountains and the Mediterranean as "The Great Raisuli".

Raissoulli said yes, he was indeed a great-grandson of Raisuli but sadly he didn't think he had inherited any of the piratical swagger, 
"I'm not the Great Raissoulli, maybe the Pretty Good Raissoulli though".

If interested, the autodidact historian (and two time Pulitzer prize winner) Barbara Tuchman wrote a short account of one of Raisuli's crimes/exploits. It begins:

"Perdicaris Alive or Raisuli Dead"
Barbara Tuchman American Heritage, August 1959
Reprinted in "Practising History", Papermac, 1995

On a scented Mediterranean May evening in 1904 Mr. Ion Perdicaris, an elderly, wealthy American, was dining with his family on the vine-covered terrace of the Place of Nightingales, his summer villa in the hills above Tangier. Besides a tame demoiselle crane and two monkeys who ate orange blossoms, the family included Mrs. Perdicaris; her son by a former marriage, Cromwell Oliver Varley, who (though wearing a great name backward) was a British subject; and Mrs. Varley. Suddenly a cacophony of shrieks, commands, and barking of dogs burst from the servants' quarters at the rear.
Assuming the uproar to be a further episode in the chronic feud between their German housekeeper and their French-Zouave chef, the family headed for the servants' hail to frustrate mayhem. They ran into the butler flying madly past them, pursued by a number of armed Moors whom at first they took to be their own household guards.
Astonishingly, these persons fell upon the two gentlemen, bound them, clubbed two of the servants with their gunstocks, knocked Mrs. Varley to the floor, drew a knife against Varley's throat when he struggled toward his wife, dragged off the housekeeper, who was screaming into the telephone, "Robbers! Help!," cut the wire, and shoved their captives out of the house with guns pressed in their backs.

Waiting at the villa's gate was a handsome, black-bearded Moor with blazing eyes and a Greek profile, who, raising his arm in a theatrical gesture, announced in the tones of Henry Irving playing King Lear, "I am the Raisuli!"...
The story was also made into a movie starring Sean Connery, The Wind and the Lion.

"Here’s what influence looks like"

Despite the GDPR induced demise of Klout (FTAV's Jemima Kelly, May 11) there are still ways to measure online influence.
Kanye West was tweeting about neurotransmitters and hormones on May 21 (file under: words I never thought I'd type).

Hormones (oxytocin):
And this happened:

Via Bryan Dickey:

Google and Facebook Have Already Been Accused of Violating May 25's GDPR Rules

From the BBC:

Google and Facebook accused of breaking GDPR laws
Complaints have been filed against Facebook, Google, Instagram and WhatsApp within hours of the new GDPR data protection law taking effect.

The companies are accused of forcing users to consent to targeted advertising to use the services.
Privacy group led by activist Max Schrems said people were not being given a "free choice".
If the complaints are upheld, the websites may be forced to change how they operate, and they could be fined.

What's the issue?
The General Data Protection Regulation (GDPR) is a new EU law that changes how personal data can be collected and used. Even companies based outside the EU must follow the new rules if offering their services in the EU.

In its four complaints, argues that the named companies are in breach of GDPR because they have adopted a "take it or leave it approach"....MORE
Also at the Beeb: "Meghan Markle coat of arms revealed"

"Xilinx Analyst Day Plays Heavy on AI" (XLNX)

Everybody wants to get into the AI/data center/chip, act.

From Tiernan Ray at Barron's Tech Trader Daily, May 23:

Let's Get Ready to Rumble: Paul Krugman vs Joan Robinson on Trade

Joan Robinson was a Cambridge economist who helped develop post-Keynesian econ. We first mentioned her in 2007 in relation to her coinage of the word "monopsony".
As a female economist she went straight up against the male hierarchy, eventually becoming the first female fellow of Kings College.

To set the mood: 'Y'all ready for this?'

From the Case for Concerted Action blog:

Contrasting Joan Robinson And Paul Krugman’s Views On The Global Rules Of Trade
Paul Krugman has a new articleWhy A Trade War With China Isn’t ‘Easy To Win’ (Slightly Wonkish), in The New York Times, in which he rightly points out Donald Trump’s switching positions on trade with China. Krugman however has a generic point about international trade as some kind of mercantilism:
Admittedly, the political economy of trade is kind of mercantilist, because it’s driven largely by producer interests. Long ago I wrote about “GATT-think”, the view of trade, enshrined in international negotiations, that sees exports as good, imports as bad, so that letting someone sell us stuff, even if it’s better and cheaper than we could make ourselves, is a “concession.” The genius of the postwar international trading system was that it harnessed this special-interest reality, using the ambitions of exporters to offset the protectionism of those competing with imports, to engineer a kind of enlightened mercantilism that vastly expanded world trade.
[italics: mine]
So Krugman is admitting that it is in the interest of big producers, but claiming that his interests aren’t aligned with them and that the rules of trading were made such that it somehow offset them.
The reality is of course different. More successful countries do not need protection at home. At least we can say that they’re are willing to forgo protectionism as the advantage from selling more easily in markets abroad is immense. As Joan Robinson pointed out in a 1977 article (and even before), What Are The Questions?
From a long-run point of view, export-led growth is the basis of success. A country that has a competitive advantage in industrial production can maintain a high level of home investment, without fear of being checked by a balance-of-payments crisis. Capital accumulation and technical improvements then progressively enhance its competitive advantage. Employment is high and real-wage rates rising so that “labour trouble” is kept at bay. Its financial position is strong. If it prefers an extra rise of home consumption to acquiring foreign assets, it can allow its exchange rate to appreciate and turn the terms of trade in its own favor. In all these respects, a country in a weak competitive position suffers the corresponding disadvantages.

When Ricardo set out the case against protection, he was supporting British economic interests. Free trade ruined Portuguese industry. Free trade for others is in the interests of the strongest competitor in world markets, and a sufficiently strong competitor has no need for protection at home. Free trade doctrine, in practice, is a more subtle form of Mercantilism....

Previously on the pump up the music channel:

UPDATED--Cliff Asness vs. Paul Krugman: Let's Get Ready To Rumble
Let's Get Ready To Rumble II: Paul Krugman Responds to Cliff Asness
Let's Get Ready to Rumble: "Gross Vs. Gundlach: Who Has More Skill?"
An Old Fashioned Newspaper War! WaPo vs. NYT!
Let's Get Ready To Rumble: Amazon Vs. Uber In the Delivery Wars
Let's Get Ready to Rumble: Harvard Management Co. vs. Yale Investments Office

"Zuckerberg set up fraudulent scheme to 'weaponise' data, court case alleges"

This is pathological.

A major story from The Guardian, May 24:

Facebook CEO exploited ability to access data from any user’s friend network, US case claims
Mark Zuckerberg faces allegations that he developed a “malicious and fraudulent scheme” to exploit vast amounts of private data to earn Facebook billions and force rivals out of business.

A company suing Facebook in a California court claims the social network’s chief executive “weaponised” the ability to access data from any user’s network of friends – the feature at the heart of the Cambridge Analytica scandal.

A legal motion filed last week in the superior court of San Mateo draws upon extensive confidential emails and messages between Facebook senior executives including Mark Zuckerberg. He is named individually in the case and, it is claimed, had personal oversight of the scheme.

Facebook rejects all claims, and has made a motion to have the case dismissed using a free speech defence.

It claims the first amendment protects its right to make “editorial decisions” as it sees fit. Zuckerberg and other senior executives have asserted that Facebook is a platform not a publisher, most recently in testimony to Congress.

Heather Whitney, a legal scholar who has written about social media companies for the Knight First Amendment Institute at Columbia University, said, in her opinion, this exposed a potential tension for Facebook.

“Facebook’s claims in court that it is an editor for first amendment purposes and thus free to censor and alter the content available on its site is in tension with their, especially recent, claims before the public and US Congress to be neutral platforms.”

The company that has filed the case, a former startup called Six4Three, is now trying to stop Facebook from having the case thrown out and has submitted legal arguments that draw on thousands of emails, the details of which are currently redacted. Facebook has until next Tuesday to file a motion requesting that the evidence remains sealed, otherwise the documents will be made public....MUCH MORE
Related, last August:
"...How Facebook Squashes Competition From Startups" (FB, AMZN, AAPL, GOOG)
"Facebook’s willingness to copy rivals’ apps seen as hurting innovation" (FB)

Thursday, May 24, 2018

"About $1.2 billion in cryptocurrency stolen since 2017..."

Interesting take on GDPR side effects here.
From Reuters:
Criminals have stolen about $1.2 billion in cryptocurrencies since the beginning of 2017, as bitcoin’s popularity and the emergence of more than 1,500 digital tokens have put the spotlight on the unregulated sector, according to estimates from the Anti-Phishing Working Group released on Thursday.

The estimates were part of the non-profit group’s research on cryptocurrency and include reported and unreported theft.

“One problem that we’re seeing in addition to the criminal activity like drug trafficking and money laundering using cryptocurrencies is the theft of these tokens by bad guys,” Dave Jevans, chief executive officer of cryptocurrency security firm CipherTrace, told Reuters in an interview.
Jevans is also chairman of APWG.

Of the $1.2 billion, Jevans estimates that only about 20 percent or less has been recovered, noting that global law enforcement agencies have their hands full tracking down these criminals.
Their investigations of criminal activity will likely take a step back with the European Union’s new General Data Protection Regulation, which takes effect on Friday....MORE

"DHS Fusion Center Gets Request For Documents On Extremists, Decides To Hand Over Mind Control Docs Instead"

Techdirt, May 24:

from the here's-the-thing-you-didn't-ask-for-but-will-probably-enjoy-reading dept
Once you release a document to a public records requesters, it's a public record, whether you meant to release it or not. The person handling FOIA requests for the Washington State Fusion Center (a DHS/local law enforcement collaboration known more for its failures than successes) sent Curtis Waltman something unexpected back in April. Waltman asked the Fusion Center for records pertaining to Antifa and white supremacy groups. He did get those records. But he also got something titled "EM effects on human"

Instead of intel and assessments on local Antifa/white supremacists, Waltman found things like this
And this:
The files did not appear to have been generated by any government agency, but rather collected from other sources who thought there might be some way the government could control minds using electronic stimulation or "remote brain mapping." Why the Fusion Center had them on hand remains a mystery, as does their attachment to a FOIA request containing nothing about electronic mind manipulation.

This inadvertent disclosure has led to more requests for the same documents. Only this time, requesters -- like Joshua Eaton of ThinkProgress -- are asking specifically for government mind control files. It appears the Fusion Center first thought about withholding some mind control docs, but somewhere along the line decided it couldn't pretend the documents that weren't supposed to be released hadn't actually been released.

An email chain in the release [PDF] to Eaton contains an apology from the staffer who accidentally sent Waltman the mind control files....MORE

"Uber Unveils Another Loss, CEO Promises To Be Profitable "One Day, Can't Say When""

Hey, speak of the devil!

From ZeroHedge:
It appears Uber is readying itself for an IPO as its release of what Bloomberg calls "cherry-picked financials" suggests a fast-growing company whose losses are shrinking.

Uber "was a company that was in trouble and lost its way in certain ways" according to Chief Executive Officer Dara Khosrowshahi, but now he is fixing things apparently.

Uber said that in the first quarter it generated about $2.6 billion in revenue.

As Bloomberg reports, the company recorded a profit on paper, after accounting for the value of selling its Southeast Asian business to Grab and its Russian business to Yandex.
But it’s a different story without those windfalls.

Uber had a loss of $312 million before interest, taxes and other expenses in the quarter, cutting those losses in half compared to the first three months of 2017, according to financials provided by Uber. That’s a marked improvement for a company that’s burned through more than $10 billion....MUCH MORE

"Try as you might, it's difficult to find a more depressing stock market story than Noble Group".

A couple of the FT's heavyweights (commodities editor, energy markets editor) tell a sad, sad (but potentially instructive) tale.
Via FT Alphaville:

Noble rot in a shrinking Harbour
Try as you might, it's difficult to find a more depressing stock market story than Noble Group.

Once Asia’s biggest commodity trader, the Singapore-listed company has left a trail of devastation for investors who bought into Richard Elman’s dream of building a Far East rival to Glencore.
From Singapore’s mom and pop investors on the light-touch SGX, to institutional buyers that probably should have known better, all have suffered serious wealth destruction as critics have savaged Noble’s accounting practices.

While the company has always defended its financial reporting since it first came under attack three years ago, it has nevertheless written down billions of dollars worth of paper profits linked to long-term supply contracts that were at the heart of the initial controversy. Some were linked to projects that had never got off the ground.

Seemingly unable to generate cash and saddled with large debts, Noble has spent the past 18 months fighting for its survival. Now it is trying to push through a debt restructuring deal that will hand control of what’s left of the trading house to group of hedge funds and banks - who are charging the company millions in fees for the privilege.

Noble, however, seems to have learnt very little from the three-year crisis, which was triggered by a string of devastating reports published by a former employee under the guise of Iceberg Research.
Results published last week show muddy accounting - legal under international standards but often with the effect of obfuscation rather than clarity - something that appears to be embedded in Noble’s DNA. The company and its management team, many of whom would retain plum roles after the restructuring, seems unable to help itself.

The first quarter numbers were, predictably, poor. It was another loss - this time $71m - accompanied by the usual claims that there is a slimmed-down business worth saving.
The loss, the company accounts showed, was an improvement on this time last year. Shareholders, they seemed to suggest, should be emboldened to vote through the convoluted debt-for-equity swap even if it leaves them with just a sliver of the restructured company.

But a close examination of the figures shows the downward trend at Noble’s core business remains firmly intact....MUCH MORE
From Trading Titan to Penny Stock: Noble Group Faces Crunch as Creditors, Investors Circle

"China Now Has a Trade Deficit"

From The Conversable Economist, May 21:
A large share of the concern over China's effect on the world economy starts with large Chinese trade surpluses. But in the first few months of 2018, China's trade balance was negative(using the standard broad measure of the current account balance). That is, China had a trade deficit, not a trade surplus. For example, the Economist magazine reports: "China’s vanished current-account surplus will change the world economy" (May 17, 2018).  The South China Morning Post reports: "China’s first current account deficit for 17 years ‘could signal fundamental shift" (May 4, 2018).

Here's a figure showing China's pattern of trade imbalances since the late 1990s. Notice that although China's economic reforms and very rapid growth started in the late 1970s, its trade balance was fairly close to zero during late 1990s and early 2000s. Then China's trade surplus exploded in size before the Great Recession, fluctuated for a few years while gradually trending down, and then turns negative in early 2018.
There's a seasonal pattern in China's economy that exports tend to be lower in the early months of the year. Assuming the usual rise in China's exports later in the year, China may well end the year with a trade surplus, but it will be quite modest in size.

I have argued before that thinking of the trade balance as a measure of the unfairness of trade is economically illiterate. But if you are someone who holds that belief, then consider what it implies. You must believe that China was a fair trader in the late 1990s and into the early 2000s (near-zero trade deficit), then it exploded into large trade unfairness, and less but fluctuating trade unfairness, before now returning to trade fairness. Such an interpretation taxes credulity. But if China's trade surpluses are the rationale for imposing trade barriers on Chinese imports, that rationale does not presently exist....MORE

Watch Out Elon: Nikola Is Offering More Than Just Trucks (TSLA; NEL:Oslo)

Following up on May 11's "Watch Out Elon: "Anheuser-Busch just bought 800 fuel cell Nikola trucks" (TSLA; NEL:Oslo)".

From Ars Technica:
This rugged electric off-roader from Nikola has specs to rival a Tesla 
This go-anywhere vehicle goes on sale next year.
FLAT ROCK, MICH.—If I were to tell you about an electric vehicle with 125kWh of batteries, 590hp (440kW), and a 0-60mph time of 3.5 seconds, you'd probably think "Tesla." But this EV is something a little more esoteric and one that can go places a Tesla would fear to tread. It's called the Nikola NZT, and it's a UTV, or utility task vehicle; think ATV but with four seats, pedals, and a steering wheel. The vehicle is still in development—Nikola is targeting next year as the on-sale date—but it was one of the highlights we saw showcased at the Bosch Mobility Experience USA event this week.

You might be more familiar with Nikola for its heavy-duty fuel cell trucks; Anheuser-Busch recently placed an order for 800 of those, and the company is embroiled in a lawsuit with Tesla over the latter's electric Semi, which Nikola claims infringes its patents. Like Tesla, Nikola uses Bosch components in its vehicles, although in this case the relationship is quite a close one, with the tier 1 supplier being deeply involved in the development of both the long-haul truck as well as the NZT.

The NZT has a rather interesting design. Each wheel gets its own electric motor, which uses Bosch's eAxle technology we've described previously. This design also means it's capable of torque vectoring for better agility. Each corner also uses a Fox internal bypass damper with 20 inches (508mm) of travel. Since it's a completely flat-bottom design with no differential or other mechanical gubbins poking down, that means great off-road ability, with 14.5 inches (368.3mm) of ground clearance....MORE

China Signals to State Giants: ‘Buy American’ Oil and Grains

From Reuters via gCaptain:
China will import record volumes of U.S. oil and is likely to ship more U.S. soy after Beijing signaled to state-run refiners and grains purchasers they should buy more to help ease tensions between the two top economies, trade sources said on Wednesday.

China pledged at the weekend to increase imports from its top trading partner to avert a trade war that could damage the global economy. Energy and commodities were high on Washington’s list of products for sale.

The United States is also seeking better access for imports of genetically modified crops into China under the deal.

As the two sides stepped back from a full-blown trade war, Washington neared a deal on Tuesday to lift its ban on U.S. firms supplying Chinese telecoms gear maker ZTE Corp , and Beijing announced tariff cuts on car imports.

But U.S. President Donald Trump indicated on Wednesday that negotiations were still short of his objectives when he said any deal would need a “different structure.”

China is the world’s top importer of both oil and soy, and already buys significant volumes of both from the United States. It is unclear how much more Chinese importers will buy from the United States than they would have otherwise, but any additional shipments would contribute to cutting the trade surplus, as demanded by Trump.

Asia’s largest oil refiner, China’s Sinopec will boost crude imports from the United States to an all-time high in June as part of Chinese efforts to cut the surplus, two sources with knowledge of the matter said on Wednesday....MUCH MORE

"Digital Capitalism’s War on Leisure" (Gaming and Much More)

As a former* subscriber to The Journal of Leisure Studies...(see below).

On a more serious note, although we are not gamers, the subculture is worth keeping an eye on.
For example, Gamergate was a foreshadowing of Harvey Weinstein, Senator Franken and the whole #MeToo movement.

And the dopamine (and other neurotransmitter reward cascades) tie-ins with "Techlash". (253 hits)

And then there''s NVIDIA. Have I ever told you about NVIDIA?
(Yes, yes we have. A Google site search returns 1800 hits with most of them as the stock was running from $20 to $120: " NVIDIA")

So we pay attention to leisure, although not as intensely as previously.

From Democracy Journal:

Market forces are invading the space for leisure. Defending it will require nothing less than a return to robust twentieth-century social democracy.
Last July, a paper by Mark Aguiar et al. made waves by attributing 23-46 percent of the 12 percent decline in work hours among predominantly low-skill males aged 21-30 to improvements in video-gaming technology. That hypothesis offended the sensibilities of anyone who believes that all those who are able to work should do so. But what if it misses a larger point about the changing patterns of work and leisure?

Start with the story of recreational gaming in recent years, which is also a story about the commodification of free time. Where once video gaming offered individual or cooperative escapes from the workaday world (after the initial cost of purchase), it has now increasingly been pressed into the service of the market. As a result, gaming has come to privilege haves over have-nots, work and passive consumption over leisure, and the economic over the social. It represents a cautionary tale for what can happen to any social and leisure activity, particularly in the digital economy.

The market capture of gaming has taken at least three forms. First, gaming has, in many ways, been transformed from an ordinary leisure activity into a consumer luxury good. According to the Entertainment Software Association, “software, including in-game purchases and subscriptions,” accounted for $29.1 billion of the industry’s revenue in 2017, whereas “hardware, including peripherals,” accounted for a relatively meager $6.9 billion. And in 2016, mobile-gaming apps made up 75 percent of all Apple App Store revenues and 90 percent of Google Play Store revenues.
More to the point, the makeup of the gaming industry’s revenue—which grew by almost 20 percent in 2016 alone—suggests that it is catering not just to those who are working less, but also to a leisure class with higher levels of disposable income. Much of the industry’s growth is the product of a widely adopted “freemium” model, whereby users get a game for free, but are pressured to make credit-card purchases in order to experience it in full (hence the portmanteau of “free” and “premium”).

Accordingly, many of the highest-grossing games create a sunk-cost dilemma, in that users must continuously make new purchases to keep up with each software version update. In what becomes a vicious cycle, a player who has spent $50 to get a leg up over other players easily succumbs to the temptation to spend just $5 more to keep things that way. Similarly, many games use addictive “gacha” or “loot boxes” that deliver randomly generated, exclusive rewards. This increasingly common ploy functions so much like a slot machine that it has prompted new anti-gambling legislation in six U.S. states. Far from being just an inexpensive escape for idlers, then, modern gaming has become an outlet for people with money to burn—or, worse, for those gambling on credit.

Meanwhile, this trend has been accompanied by the rise to a growing precariat of semi-professional “content creators” publishing videos on YouTube and streaming their gameplay on Twitch. This growing informal labor force may constitute a healthy share of the 4 percent of young men who report spending six or more hours per day on computers, while neither working nor looking for work.
In fact, Twitch boasts 1.5 million “broadcasters” worldwide, some of whom log 60-hour weeks and make six figures from viewer donations, ad revenues, and sponsorships, notes Taylor Clark of The New Yorker. Still, most grind away in Twitch’s online gig economy without ever achieving that level of success. And all the while, the entire experience is saturated in advertising and direct solicitations to the site’s 100 million monthly visitors.

A third form of market mediation is not far off. Many machine-learning applications rely on vast stores of human-produced data, and digital gaming is an especially data-rich activity. Already, the “Grand Theft Auto” series is being used to teach autonomous vehicles to recognize street signs and other obstacles. Presumably, it is only a matter of time before developers start designing games with the goal of collecting even more human behavioral data. Such financial concerns will inevitably affect the content of games, optimizing them for machine learning alongside—or instead of—quality of experience.

Although the commodification of leisure is not new, it is also not something to be complacent about. In industrial and post-industrial societies, work tends to be necessarily hierarchical. But leisure has always held out the promise of equality. Under ideal conditions, one need not belong to the same socioeconomic class to belong to the same book club, or, for that matter, to the same “Clash of Clans” clan (a private in-game community formed by players who set the qualifications for membership). Video games, at their best, offer everyone an equal chance to overcome the same challenges on an equal playing field. “Pac-Man,” after all, didn’t let you add extra quarters to purchase immunity from the ghosts. And, like leisure generally, games provide a space for the formation of social relations that can stand apart from economic ones.

But as Harvard University philosopher Michael Sandel has demonstrated in great detail, the introduction of market forces can shatter the ideal of equality in a variety of spheres. Markets bring extraneous competition, even envy, which, as Bertrand Russell once observed, “consists in seeing things never in themselves but only in their relations.”

Thus, in the “freemium” economy, one’s expendable income really does determine whether one can join certain “Clash” clans, because many only accept members who have advanced to a level that can only be achieved through the in-app purchase of “gems.” On Twitch, income divides social communities into haves and have-nots who must constantly hustle for the former’s patronage. And in an AI-driven setting – as on social media – one can never be too sure where the fun stops and the exploitation begins. In any case, a potential realm of equal opportunity has been replaced by a congeries of unequal, transactional power relations.

To be sure, any discussion of recreational gaming, and the community it has created, is largely a discussion about a narrow cohort of men and boys born after 1980. But the market’s wholesale colonization of this domain is of a piece with broader trends across health care, education, media, and even public spaces such as U.S. national parks—areas where a strict economic logic is often incompatible with the public good. What’s more, this process has been accompanied by a larger cultural shift toward market prerogatives, one that is reflected in most gamers’ passive acceptance of the full-bore commodification of their chosen free-time activity. (Now that the Supreme Court has granted an imprimatur for state governments to legalize sports betting, the culture of athletic “fantasy” leagues – and fandom more generally – will likely continue even further down this path.)

Reversing the cultural acceptance of market infiltrations into leisure will require nothing less than a return to traditional twentieth-century social democracy. Under today’s state-sanctioned system of per capita GDP-anchored utilitarianism (or “neoliberalism”), the social and environmental costs of unfettered GDP growth are considered not just incidental, but justified for the greater good. Within this prevailing economic model, the social-democratic impulse is to redress the externalities of growth through labor-market and social-insurance policies.

But such policies are merely the “apps” of social democracy. The operating system is something larger. It might best be understood as a political dispensation for preserving that which should be separate from markets, be it the environment, organic social networks, or public goods such as education and basic research....

*June 2012
Work and Leisure
Guess who gets to write off their subscription to The Journal of Leisure Studies?

From FT Alphaville:
On abundance, post-scarcity and leisure
Robert and Edward Skidelsky, emeritus professor of political economy at the University of Warwick and lecturer on moral and political philosophy at the University of Exeter respectively, have penned what FT Alphaville feels is a must read essay on the impact of abundance and post-scarcity dynamics on price stability and the nature of labour, and work itself.

Entitled “In Praise of Leisure“, it picks up beautifully from where our own “Beyond Scarcity” series left off, echoing many of the same points....MORE
Thanks Izzy.

Anybody Find a Million Missing Shipping Containers?

From Reuters, May 17:

P&R's million missing ship containers puzzle German prosecutors
Managers of insolvent P&R Group are being investigated after it was discovered the investment firm sold nearly one million more shipping containers than it owned, the Munich prosecutors’ office said on Thursday.

Once the world’s biggest lessor of shipping containers, P&R sells containers to investors and its sister company in Switzerland rents them out to shipping companies.
P&R later buys back the containers from investors.

P&R, which is based near Munich, has sold some 1.6 million containers to around 54,000 investors for a total 3.5 billion euros ($4.12 billion).

But a tally made after its German units filed for insolvency earlier this year has shown that P&R only has a fleet of around 600,000 containers, administrator Michael Jaffe said in a statement.... MORE

Wednesday, May 23, 2018

Carreyou: "A New Look Inside Theranos’ Dysfunctional Corporate Culture"

Over the years I've mentioned "we like business journalists, we've gotten some of our best ideas from them."
It's not just a Kindergarten-style "ooh great idea, let's trade this" (although we've done a bit of that).
On a higher level of abstraction, following a good journo is akin to machine-learning: exposing your brain to examples of behaviors, corporate and individual, to train the brain and create pattern-recognition templates.

The advantage in reading such examples is the ability to absorb many more variations than your personal experience could ever give you. This is one of the reasons we spend so much time on non-publicly traded situations. If you follow a company such as Uber for a few years you will see many different manifestations of dysfunction that may stand you in good stead should you come across something similar in the market.

Ditto for Theranos which was showing signs of being a fraud before Mr. Carreyou ripped the bandage off to expose the suppurating pustule that was Ms. Holmes' creation. See our 2015 "Theranos: She's Young, She's Rich, Is She A Marketing Huckster?" if interested. And apologies for the pustule line, I was channeling another fraudster we've highlighted, more after the jump.

Here's the headline story:
about the author
John Carreyrou is a two-time Pulitzer Prize-winning investigative reporter at The Wall Street Journal. For his extensive coverage of Theranos, Carreyrou was awarded the George Polk Award for Financial Reporting, the Gerald Loeb Award for Distinguished Business and Financial Journalism in the category of beat reporting, and the Barlett & Steele Silver Award for Investigative Business Journalism.
From Wired, May 21:

When a chemist raised concerns about the blood testing machines' high error rates, she was ignored. So she resigned.
Alan Beam was sitting in his office reviewing lab reports when Theranos CEO and founder Elizabeth Holmes poked her head in and asked him to follow her. She wanted to show him something. They stepped outside the lab into an area of open office space where other employees had gathered. At her signal, a technician pricked a volunteer’s finger, then applied a transparent plastic implement shaped like a miniature rocket to the blood oozing from it. This was the Theranos sample collection device. Its tip collected the blood and transferred it to two little engines at the rocket’s base. The engines weren’t really engines: They were nanotainers. To complete the transfer, you pushed the nanotainers into the belly of the plastic rocket like a plunger. The movement created a vacuum that sucked the blood into them.

Or at least that was the idea. But in this instance, things didn’t go quite as planned. When the technician pushed the tiny twin tubes into the device, there was a loud pop and blood splattered everywhere. One of the nanotainers had just exploded.
Holmes looked unfazed. “OK, let’s try that again,” she said calmly.

Beam1 wasn’t sure what to make of the scene. He’d only been working at Theranos, the Silicon Valley company that promised to offer fast, cheap blood tests from a single drop of blood, for a few weeks and was still trying to get his bearings.

He knew the nanotainer was part of the company’s proprietary blood-testing system, but he’d never seen one in action before. He hoped this was just a small mishap that didn’t portend bigger problems.
The lanky pathologist’s circuitous route to Silicon Valley had started in South Africa, where he grew up. After majoring in English at the University of the Witwatersrand in Johannesburg (“Wits” to South Africans), he’d moved to the United States to take premed classes at Columbia University in New York City. The choice was guided by his conservative Jewish parents, who considered only a few professions acceptable for their son: law, business, and medicine.

Beam had stayed in New York for medical school, enrolling at the Mount Sinai School of Medicine on Manhattan’s Upper East Side, but he quickly realized that some aspects of being a doctor didn’t suit his temperament. Put off by the crazy hours and the sights and smells of the hospital ward, he gravitated toward the more sedate specialty of laboratory science, which led to postdoctoral studies in virology and a residency in clinical pathology at Brigham and Women’s Hospital in Boston.

In the summer of 2012, Beam was running the lab of a children’s hospital in Pittsburgh when he noticed a job posting on LinkedIn that dovetailed perfectly with his budding fascination with Silicon Valley: laboratory director at a Palo Alto biotech firm. He had just finished reading Walter Isaacson’s biography of Steve Jobs. The book, which he’d found hugely inspiring, had cemented his desire to move out to the San Francisco Bay Area.

After he applied for the job, Beam was asked to fly out for an interview scheduled for 6 pm on a Friday. The timing seemed odd but he was happy to oblige. He met with COO Sunny Balwani first and then with Holmes. There was something about Balwani that he found vaguely creepy, but that impression was more than offset by Holmes, who came off as very earnest in her determination to transform health care. Like many people who met her for the first time, Beam was taken aback by her deep voice. It was unlike anything he’d heard before.

At the time, Theranos was on the cusp of becoming a tech darling. Founded by the charismatic Stanford dropout in 2003, its promises to revolutionize blood-testing—and by extension, the vast industry of medical diagnostics—would be swallowed whole by most of the technology press, which would lavish Holmes with glowing coverage. (WIRED was not exempt). Only later—in October 2015—would the truth come out: Theranos was a fraud built on secrecy, deliberate fabrication, and hype. After I revealed that fraud, the company would begin an implosion that continues to this day....MUCH MORE
From last year's "Faraday Future issues bombastic statement accusing former CFO of ‘malfeasance and dereliction of duty’":

...And my all time favorite bit o'bombast, recounted as the intro to 2007's "Planktos Highlights Real Ocean/Climate Crises & Responds to Recent Misinformation Campaigns" about a Euro-American reinsurance scam that had reverse-merged its way onto the American Stock Exchange, gotten onto the Fed Board's margin list and then, rather than doing the dump half of a pump-n-dump as they gunned it from 50 cents to $15.00, had just margined  the hell out of their brokerage accounts, requested the excess buying power be wired out and skedaddled, picking up the remaining cash in the corporate bank accounts on their way out the door:
...But first, one of my favorite examples of a stock scam (I told you, I have a morbid fascination with the underbelly of the markets, it's like watching the lions approach the wildebeest at the watering hole, you don't want to see it but you can't look away):
...Peter Uttley, Equisure's chairman and a former Lloyds of London executive, took control of the company this week, assuming the chief executive post....

...Uttley said in the press release that his chairman role had been a "passive" one, but he now plans an active reorganization of the company, whose reputation has been stained by allegations that it is a scam insurance operation....
...In an unusually emotional statement to the press, sent from an Equisure board meeting Friday in London, Uttley told his version of events over the summer, which eventually led to the delisting of Equisure shares on the American Stock Exchange.
"The simple truth was consumed in the belly of deception, but now has been vomited for the world to see," Uttley began.
He then proceeded to tell a story of three men, whom he described as "liars," "cheats," and "scallywags," who worked with law enforcement officials and the press to spread false rumors about the company with the intent of buying Equisure out at 50 cents a share, a tiny fraction of the stock's trading price of $15, before AMEX suspended trading Aug. 1.
Isn't that damn fine bloviating? It's hard to research but I think Uttley et. al. got away with $100 mil.
Here's Russ George of Planktos responding (I think) to Greenpeace's submission to the recent meeting of the International Maritime Organization...
Who's going to top "The simple truth was consumed in the belly of deception, but now has been vomited for the world to see," in a press release?
Scallywags is a nice touch as well.

"The US military is funding an effort to catch deepfakes and other AI trickery"

But, but...I saw it on the internet.
From MIT's Technology Review:

But DARPA’s technologists admit that it might be a losing battle.
Think that AI will help put a stop to fake news? The US military isn’t so sure.
The Department of Defense is funding a project that will try to determine whether the increasingly real-looking fake video and audio generated by artificial intelligence might soon be impossible to distinguish from the real thing—even for another AI system.
This summer, under a project funded by the Defense Advanced Research Projects Agency (DARPA), the world’s leading digital forensics experts will gather for an AI fakery contest. They will compete to generate the most convincing AI-generated fake video, imagery, and audio—and they will also try to develop tools that can catch these counterfeits automatically.
The contest will include so-called “deepfakes,” videos in which one person’s face is stitched onto another person’s body. Rather predictably, the technology has already been used to generate a number of counterfeit celebrity porn videos. But the method could also be used to create a clip of a politician saying or doing something outrageous.
DARPA’s technologists are especially concerned about a relatively new AI technique that could make AI fakery almost impossible to spot automatically. Using what are known as generative adversarial networks, or GANs, it is possible to generate stunningly realistic artificial imagery.

“Theoretically, if you gave a GAN all the techniques we know to detect it, it could pass all of those techniques,” says David Gunning, the DARPA program manager in charge of the project. “We don’t know if there’s a limit. It’s unclear.”

 A GAN consists of two components. The first, known as the “actor,” tries to learn the statistical patterns in a data set, such as a set of images or videos, and then generate convincing synthetic pieces of data. The second, called the “critic,” tries to distinguish between real and fake examples. Feedback from the critic enables the actor to produce ever-more-realistic examples. And because GANs are designed to outwit an AI system already, it is unclear if any automated system could catch them....MUCH MORE
Related (and because all news is local), from the Columbia Journalism Review:
Reporting in a Machine Reality: Deepfakes, misinformation, and what journalists can do about them
That's not local in the geographical sense but rather intellectual provincialism:
...In yesterday's "Questions America Wants Answered: How Will Brexit Affect The Art Market?" I amused myself with the provincialism of the headline question, somewhat akin to the old joke about the small Italian town that sent its most esteemed resident, a tailor by trade, to represent said villaggio at an audience with the Pope. Upon his return from Rome the citizens crowded around and asked "What kind of man is Il Papa?

Their emissary replied, "About a 42 regular"....
We all see the world through our own self-created lenses. And on a related provincialism point, easily the most terrifying news of the last couple years:

"Equity Analysts Join the Gig Economy"
"The automation of creativity: scary but inevitable"
First they came for the journalists and I did not speak out-
Because I was not a journalist.

Then they came for the ad agency creatives and I did not speak out-
Because I was not an ad agency creative. (see below)

Then they came for the financial analysts and I
said 'hang on one effin minute'....