Saturday, July 23, 2016

Adversarial Images, Or How To Fool Machine Vision

From MIT's Technology Review:

Machine Vision’s Achilles’ Heel Revealed by Google Brain Researchers
By some measures machine vision is better than human vision. But now researchers have found a class of “adversarial images” that easily fool it.
One of the most spectacular advances in modern science has been the rise of machine vision. In just a few years, a new generation of machine learning techniques has changed the way computers see.
Machines now outperform humans in face recognition and object recognition and are in the process of revolutionizing numerous vision-based tasks such as driving, security monitoring, and so on. Machine vision is now superhuman.

But a problem is emerging. Machine vision researchers have begun to notice some worrying shortcomings of their new charges. It turns out machine vision algorithms have an Achilles’ heel that allows them to be tricked by images modified in ways that would be trivial for a human to spot.  


These modified pictures are called adversarial images, and they are a significant threat. “An adversarial example for the face recognition domain might consist of very subtle markings applied to a person’s face, so that a human observer would recognize their identity correctly, but a machine learning system would recognize them as being a different person,” say Alexey Kurakin and Samy Bengio at Google Brain and Ian Goodfellow from OpenAI, a nonprofit AI research company.

Because machine vision systems are so new, little is known about adversarial images. Nobody understands how best to create them, how they fool machine vision systems, or how to protect against this kind of attack.

Today, that starts to change thanks to the work of Kurakin and co, who have begun to study adversarial images systematically for the first time. Their work shows just how vulnerable machine vision systems are to this kind of attack.

The team start with a standard database for machine vision research, known as ImageNet. This is a database of images classified according to what they show. A standard test is to train a machine vision algorithm on part of this database and then test how well it classifies another part of the database.

The performance in these tests is measured by counting how often the algorithm has the correct classification in its top 5 answers or even its top 1 answer (its so-called top 5 accuracy or top 1 accuracy) or how often it does not have the correct answer in its top 5 or top 1 (its top 5 error rate or top 1 error rate).

One of the best machine vision systems is Google’s Inception v3 algorithm, which has a top 5 error rate of 3.46 percent. Humans doing the same test have a top 5 error rate of about 5 percent, so Inception v3 really does have superhuman abilities.

Kurakin and co created a database of adversarial images by modifying 50,000 pictures from ImageNet in three different ways. Their methods exploit the idea that neural networks process information to match an image with a particular classification. The amount of information this requires, called the cross entropy, is a measure of how hard the matching task is.

Their first algorithm makes a small change to an image in a way that attempts to maximize this cross entropy. Their second algorithm simply iterates this process to further alter the image.

These algorithms both change the image in a way that makes it harder to classify correctly. “These methods can result in uninteresting misclassifications, such as mistaking one breed of sled dog for another breed of sled dog,” they say.

Their final algorithm has much cleverer approach. This modifies an image in way that directs the machine vision system into misclassifying it in a specific way, preferably one that is least like the true class. “The least-likely class is usually highly dissimilar from the true class, so this attack method results in more interesting mistakes, such as mistaking a dog for an airplane,” say Kurakin and co.

They then test how well Google’s Inception v3 algorithm can classify the 50,000 adversarial images.
The two simple algorithms significantly reduce the top 5 and top 1 accuracy. But their most powerful algorithm—the least-likely class method—rapidly reduces the accuracy to zero for all 50,000 images. (The team do not say how successful the algorithm is at directing misclassifications.)

That suggests that adversarial images are a significant threat but there is a potential weakness in this approach. All these adversarial images are fed directly into the machine vision system.

But in the real world, an image will always be modified by the camera system that records the images. And an adversarial image algorithm would be useless if this process neutralized its effect. So an important question is how robust these algorithms are to the transformations that take place in the real world....
...MORE

HT: Next Big Future

Interesting that the authors consider fooling facial recognition algos to be an 'attack'.

See also last year's "Want to Know Where the 'Cameras Everywhere' Culture Is Heading?" which included, among other things, a flashback to an earlier post:

...You can go with anti-facial recognition makeup as highlighted in 2013's "How to Hide From Cameras":

responsive

but this raises its own set of problems, not the least of which is taking a half hour to apply just so you can go down to the lobby.

See also:
"Imagining a Drone-Proof City in the Age of Surveillance"
"Live a modern life while frustrating the NSA"

http://www.selfieresearchers.com/wp-content/uploads/2014/09/CV-Dazzle-antiface.png

"GM CEO: Car Hacking Will Become a Public Safety Issue"

I'll pay the ransom, just don't help WeLiveSecurity's term 'Jackware' catch on.

From MIT's Technology Review:
The auto industry may need to team up to prevent spyware, phishing, and ransomware from infecting your ride.
Automobiles are starting to resemble robotic smartphones on wheels. Unfortunately, that makes them a pretty juicy target for would-be hackers.

So far there have been relatively few incidents of car hacking beyond demonstrations by security researchers. However, GM CEO Mary Barra said today that car security would become a significant public safety issue in the years to come. “A cyber incident is not a problem just for the automaker involved,” Barra said at an industry conference held in Detroit. “It is a problem for every automaker around the world. It is a matter of public safety.”

Barra said the industry would need to collaborate on the problem: “We view cybersecurity not as an area for competitive advantage, but as a systemic concern in which the auto industry’s collective customers—and society at large—are best served by industry-wide collaboration and the sharing of best practices.”

Security researchers have shown for years that cars can be hacked, and the risk has increased as cars have become more computerized and networked (see “Is Your Car Safe from Hackers?” and “Your Future Self-Driving Car Will Be Way More Hackable”). There have also been a few real-world hacking episodes, including cases of thieves stealing vehicles after connecting to their computer systems and a disgruntled employee disabling more than 100 vehicles using an after-market immobilization system.

Following such episodes, carmakers have begun stepping up efforts to design vehicles to be more secure, but some experts warn that more needs to be done (see “Carmakers Accelerate Security Efforts After Hacking Stunts”).

In her speech, Barra also hinted at some of the threats car owners might soon face as hackers turn their attention from smartphones and laptops to vehicles....MORE
HT for both, Fortune's Data Sheet.

Dear Boomers and Gen Xers: "If You’re Over 40, Working More Than 25 Hours a Week Could Be Affecting Your Intelligence..."

As I noted in a 2011 rant against some of Jared Diamond's work, the life of a medieval peasant was not so completely filled with drudgery as some popular histories might lead one to believe:
...Painting the image of hunter-gatherer superiority he makes no mention of the agricultural peasants of the middle ages who worked between 180 and 260 days per year, the rest of the time being taken up with Sundays, feast days, holidays,  fair days etc.
On top of that, in a world where light was either by sun or by fire, the winter workday north of, say, the 45th parallel, was reasonably short.

Of course it wasn't all Holiday partaaay--famine, pestilence and war made their periodic visits--but the actual time spent working was most likely less than at present, at least for those folks who are currently attached to the workforce.

From the BBC:

Is Full Time Work Bad For Our Brains?
Don’t do an IQ test after a full week’s work if you are 40 years or older. You could be disappointed.
If you’re over 40, working more than 25 hours of work a week could be impairing your intelligence, according to a study released in February by researchers for the Melbourne Institute of Applied Economic and Social Research in Australia. The team conducted reading, pattern and memory tests in more than 6,000 workers aged over 40, to see how the number of hours worked each week affects a person’s cognitive ability.

Working 25 hours a week (part time or three days a week) was the optimum amount of time spent working a week for cognitive functioning, while working less than that was detrimental to the agility of the brain for both men and women, the study found.

“Work can stimulate brain activity and can help maintain cognitive functions for elderly workers, the ‘lose it or use it hypothesis’,” said lead researcher Colin McKenzie, a professor of economics at Keio University in Tokyo.

“But at the same time, excessively long working hours can cause fatigue and physical and/or psychological stress, which potentially damage cognitive functioning.”

But why is age 40 the turning point for the mind?

According to McKenzie, our “fluid intelligence”, which is how well we process information, starts declining around the age of 20 and “crystallised intelligence”, or the ability to use skills, knowledge and experience starts decreasing after 30 years of age. McKenzie said that by age 40, most people perform less well at memory tests, pattern recognition and mental agility exercises....MORE

Daniel Kahneman, Molly Crockett: Deontology Or Trustworthiness?

From Edge:

Molly Crockett, Daniel Kahneman [6.16.16] 
Molly Crockett
Associate Professor of Experimental Psychology, University of Oxford
Daniel Kahneman
Recipient, Nobel Prize in Economics, 2002; Eugene Higgins Professor of Psychology Emeritus, Princeton; Author, Thinking, Fast and Slow
DANIEL KAHNEMAN:  The benefit that people get from taking a deontological position is that they look more trustworthy. Let's look at the other side of this. If I take a consequentialist position, it means that you can't trust me because, under some circumstances, I might decide to break the rule in my interaction with you. I was puzzled when I was looking at this. What is the essence of what is going on here? Is it deontology or trustworthiness? It doesn't seem to be the same to say we are wired to like people who take a deontological position, or we are wired to like people who are trustworthy. Which of these two is it?
  MOLLY CROCKETT:  What the work suggests is that we infer how trustworthy someone is going to be by observing the kinds of judgments and decisions that they make. If I'm interacting with you, I can't get inside your head. I don't know what your utility function looks like. But I can infer what that utility function is by the things that you say and do.
This is one of the most important things that we do as humans. I've become increasingly interested in how we build mental models of other people's preferences and beliefs and how we make inferences about what those are, based on observables. We infer how trustworthy someone is going to be based on their condemnation of wrongdoing and their advocating a hard-and-fast morality over one that's more flexible.

DEONTOLOGY OR TRUSTWORTHINESS?

DANIEL KAHNEMAN:  Molly, you started your career as a neuroscientist, and you still are. Yet, much of the work that you do now is about moral judgment. What journey got you there?
      
MOLLY CROCKETT:  I've always been interested in how we make decisions. In particular, why is it that the same person will sometimes make a decision that follows one set of principles or rules, and other times make a wildly different decision? These intra-individual variations in decision making have always fascinated me, specifically in the moral domain, but also in other kinds of decision making, more broadly.

I got interested in brain chemistry because this seemed to be a neural implementation or solution for how a person could be so different in their disposition across time, because we know brain chemistry is sensitive to aspects of the environment. I picked that methodology as a tool with which to study why our decisions can shift so much, even within the same person; morality is one clear demonstration of how this happens.
    
KAHNEMAN:  Are you already doing that research, connecting moral judgment to chemistry?        

CROCKETT:  Yes. One of the first entry points into the moral psychology literature during my PhD was a study where we gave people different kinds of psychoactive drugs. We gave people an antidepressant drug that affected their serotonin, or an ADHD drug that affected their noradrenaline, and then we looked at how these drugs affected the way people made moral judgments. In that literature, you can compare two different schools of moral thought for how people ought to make moral decisions.     
                  
On one hand, you have consequentialist theories, which advocate that the morally right action is the one that maximizes the greatest good for the greatest number of people. On the other hand, you have deontological theories, which argue that there's a set of absolute moral rules that you cannot break, even if there are cases in which adhering to those rules results in worse outcomes for people. These are two traditions that are at odds with one another—a very longstanding debate in philosophy.             
          
What we found was that if you enhance people's serotonin function, it makes them more deontological in their judgments. We had some ideas for why this might be the case, to do with serotonin and aversive processing—the way we deal with losses. That was the starting point for using both neurobiological and psychological tools for probing why our moral judgments and behaviors can vary so much, even within the same person.
    
KAHNEMAN:  When you use the word deontological, do you refer to how people behave, or how it's expressed in their reaction to others, or do you ask them how they think about it? Those can be very different.   
 
CROCKETT:  Absolutely. One thing that has long fascinated me is why there is so often a distinction between what we think is right or wrong, how we'll judge another person's action, and what we do ourselves. With respect to deontology, these are normative theories, they're prescriptions for what we ought to do. There's a long tradition in moral psychology of trying to understand how human judgments about what we think is right or wrong map onto these ethical theories that have been painstakingly mapped out by philosophical scholars.
     
KAHNEMAN:  What is the psychological reality of these philosophical dimensions? I understand the idea of deontology, but can you classify people? Would the classification of people apply both to what they say, what they do, and what they feel, or is there a dissociation? I might have the idea that I'm quite tolerant of certain actions, and at the same time if you checked me, I'd be disgusted by them. Is it how people feel or what they say that counts?
      
CROCKETT:  That is the crux of all of this research. When people are making judgments, much of the time they're doing this reasoned-out calculation or evaluation of consequences. We can think of them as using System 2 thinking. It's more likely that judgments are going to reflect a set of ideals or principles that people feel they ought to or, in an ideal world, would like to conform to. Of course, when people are making actual decisions that have real consequences, and there are strong incentives to behave in an unethical way, we get overwhelmed by these different sources of value and can often behave in a way that's inconsistent with our principles.   
 
KAHNEMAN:  I was asking about something that's neither of those. I was asking about indignation as an emotional response. I can think of many behaviors that I condone in the sense that I don't have the grounds to oppose them, and yet I don't like them. Does this fit into your system?  
  
CROCKETT:  Yeah. Indignation, or a retaliative desire to punish wrongdoing, is the product of a much less deliberative system. We have some data where we gave people the opportunity to punish by inflicting a financial cost on someone who treated them unfairly or fairly, and we varied whether the person who was going to get punished would find out if they'd been punished or not. We were able to do this by making the size of the overall pie ambiguous.                      
If people are punishing others in order to enforce a social norm and teach a lesson—I'm punishing you because I think you've done something wrong and I don't want you to do this again—then people should only invest in punishment if the person who's being punished finds out they've been punished. If punishment is rational and forward‑looking in this way, it's not worth it to punish when the person isn't going to find out they've been punished....     
...MORE                           

Urban Dystopias: The Burj Khalifa is not just a skyscraper, and Metropolis is much more than a film.

From Inverse:
Science fiction cityscapes have awed audiences since Metropolis debuted in Germany in 1927. These amplified skylines provide a visual shorthand for change, depicting a sort of physical and political accretion. The future Los Angeles of Blade Runner (and Blade Runner 2) implies the end of nationalism. The flooded New York of Spielberg’s A.I. Artificial Intelligence implies climate change and loss. The upper middle class verticality of Spike Jonze’s Her implies the economic and cultural results of widespread automation. These cities aren’t just predictions, they’re caricatures of our culture that eventually inform real world decision making.

Steve Graham understands the reciprocal relationship between science fiction and reality better than most: He’s a professor of cities and society in the Global Urban Research Unit at Newcastle University, an expert on speculative fiction, and the author of Vertical: The City from Satellites to Bunkers. Inverse spoke with Graham about science fiction’s urban landscapes, what they mean, and how they’re being built already.

Could you highlight some of the symbolism common to most science fiction cityscapes?
The vertical cityscape has totally dominated modern science fiction since its inception in the late 19th century, and persistent tropes of the vertical city re-emerge endlessly with the inscription of class and political and social relations into vertical space. The power of the elite being a power of inhabiting the high spaces of the huge, elongated towers; the domination of the airspaces. And their vertical dominance is literally overwhelming to those who are at the lower level in society, who are almost always inscribed into these labyrinthine, burrowing, hell-like subterranean or street levels.
So there’s this obsession with gigantism. Ever since H. G. Wells wrote The Sleeper Awakes, in late 19th century London, the assumption was that the future was going to be vertically gigantic.
Elites, in many of these worlds, inhabit this world of decadence and fantasy and power, and have an arrogant disdain for the minions who are building and operating their city. This is very prevalent in the recent film looking at J.G. Ballard’s High-Rise dystopia about modernist housing in England. This means that the politics of resistance in these cities tend to be about how repressed workers can actually transcend the strata of society by uprising against the arrogant elite power above — whether it be through trying to take on surveillance systems built to control them, or literally, physically, uprising against the elites like in Metropolis.
Dubai.
Dubai
Do you think this theme is common merely because it’s a powerful visual metaphor, or for other reasons as well?
This is much more than metaphorical. These are not just imagined cityscapes: The way these putative futures are imagined have enormous implications for our contemporary urban life. There are all sorts of issues here. One is that they inspire contemporary architecture. There’s no doubt whatsoever that Blade Runner has been a big inspiration for a lot of architecture. The visual designer who shaped the sets of Blade Runner — a guy called Syd Mead, who was an architectural draftsman by training — has done a lot of touring around the Middle East, especially, to talk to elites in those parts of the world about futurist architectures. The architect for the Burj Khalifa, Adrian Smith, has a hugely influential practice in Chicago, SOM, which designs most of the world’s supertall skyscrapers. He said that his inspiration for designing the Burj Khalifa came from watching Wizard of Oz as a child — the Emerald City being these gleaming towers looming high above flat, endless plains...MORE

"Who Was the Richest Person Who Ever Lived?"

From Barron's Long View:

The emperor of Mali lived on top of a 14th century gold mine so prolific that it probably made him the richest person who ever lived.

 Mansa Musa on His Way to Mecca Photo: Hulton Archive/Getty Images
One of the most intractable problems in economic history is translating the value of money over time. What would $1 million in, say, 1816, be worth in today’s money? 

The consumer-price index, based on the price of a basket of commodities, works as a measure of inflation over small periods of time. But while the CPI has actually been calculated back to the beginning of the 19th century, such a period has seen the creation of a completely new and vastly richer economy. 

The basket of commodities that people actually buy has changed radically. Servants were cheap in 1816; lunch could be bought for a nickel; the rent on a luxurious town house in Manhattan would have been under $100 a month. But clothes, which had to be handmade, were very expensive, as was private transportation (hence the phrase “carriage trade”). 

The best we can do is to ballpark it: In 1816, $1 million would have made its owner one of the richest people in the country, easily in the top 10 of the Forbes 400 list, had there been one then. Indeed, a net worth of $1 million (or one million pounds sterling) was so rare in 1816 that the word millionaire had only just entered the English language.

So if grasping the economic meaning of $1 million a mere two centuries ago is difficult, how can we understand the wealth of a man who lived in the 14th century? One way is to see how his spending affected an entire national economy. 

Musa Keita I (circa 1280 to circa 1337) was the ruler of the Mali Empire in west Africa. Taxing the many camel caravans that crisscrossed the Sahara Desert every year produced considerable imperial income. But two local commodities had made his country very, very rich: gold and salt. 

In the 14th century, Mali produced about half of the Old World’s gold from three highly productive mining regions. Bags of gold dust functioned as money in the kingdom, while nuggets were stored in the treasury as the property of the emperor.

Salt, an essential commodity for many purposes in the Middle Ages, came from a great salt pan near Taghaza, in the north of the present day country of Mali. Salt was so abundant and cheap there that slabs of it were used to construct buildings. But when loaded, two slabs to a camel, and shipped south to coastal regions where the commodity was scarce and expensive, salt became very valuable indeed.

MANSA MUSA, AS HE IS USUALLY remembered in Western sources (Mansa means “emperor”), was a devoted Muslim, and one of the obligations of the faithful, if they can afford it, is to make the hajj, or pilgrimage to Mecca, at least once in their lives. 

Mansa Musa could afford it, and in 1324 he went.

The journey from the Mali empire’s capital at Timbuktu to Cairo is 2,347 miles, and it is a farther 800 miles to Mecca. A camel caravan can travel only about 15 to 30 miles a day, and the huge size of Mansa Musa’s caravan may well have made its pace even slower. The round-trip journey would take two years to complete, although there were several extended stops along the way.

Ancient and medieval chroniclers habitually exaggerated numbers, but, according to these sources, Mansa Musa had a personal bodyguard of 500 soldiers, along with more to guard the entire caravan. There were also servants, cooks, camel drivers, porters, and livestock herders. Altogether, the number of people accompanying Mansa Musa was certainly in the thousands, though it is not likely to have been as high as 60,000, as some of the chronicles claim. 

These chronicles also claim that there were 12,000 slaves on the pilgrimage, each carrying, among other things, a four-pound gold bar. And 80 camels, it was said, each carried 300 pounds of gold. That would make a total of 36 tons. At the current price of gold, that would be more than $1.5 billion worth of the precious metal, an inconceivable sum in medieval terms.

As he made his way to Cairo, Mansa Musa distributed alms to the poor and gave presents to local rulers to assure their friendship. In Cairo, he made the sultan a gift of 50,000 gold dinars, more than 7,500 ounces of gold. Not surprisingly, the sultan was happy to lend Mansa Musa his summer palace for a three-month stay.

WHILE IN CAIRO, THE EMPEROR and his vast entourage spent gold so lavishly on slave girls, clothes, food, and artwork that he flooded the Egyptian economy with the stuff, causing its price to fall by as much as 25%—an inflation in the same degree in prices in the Egyptian economy, one of the Muslim world’s largest and most prosperous....MORE

Friday, July 22, 2016

Theranos Is Flopping Like A Dying Fish

Sometimes they flop themselves right back into the water, but that's not the way to bet.

From ZeroHedge:

Dead Unicorn Bounce? Theranos Hires "Compliance" Execs Following CEO's 2-Year Ban
Sometimes you have to know when to "stay down." Having been barred from owning or operating a lab for at least two years, Elizabeth Holmes, Theranos founder and CEO, said that:
...the company would be "shutting down and subsequently rebuilding the lab from the ground up, rebuilding quality systems, adding highly experienced leadership, personnel and experts, and implementing enhanced quality and training procedures."
And it appears, as Reuters reports, that is what they are doing as desperate investors maintain the dream despite its total crushing by regulatory authorities and any reality checks...
Theranos Inc hired two executives to oversee regulatory, quality and compliance standards, in a bid to turn around the struggling blood-testing company after it received sanctions from U.S. regulators.

Dave Wurtz, who previously worked at Thermo Fisher Scientific, was appointed vice president, regulatory and quality. He will work on getting FDA clearances and approvals, marketing new products, and look into medical-device quality systems....MORE
And last month Vanity Fair relayed Draper Fisher Jurvetson's Tim Draper's thoughts:

World’s Most Loyal V.C. Says Theranos Critics Are Just Haters
Tim Draper goes to bat for Elizabeth Holmes.
When Theranos C.E.O. Elizabeth Holmes was growing up, her neighbor was famous Silicon Valley venture capitalist Tim Draper. A family friend to the Holmeses, Draper’s children grew up playing with Elizabeth. He also, incidentally, wrote one of the first seed checks to Theranos a decade ago, long before it was valued at $9 billion (and later, just $800 million). His Sand Hill Road firm, Draper Fisher Jurvetson, has continued to support Holmes. And he’s still defending the company today, even after a series of critical Wall Street Journal reports revealed that the start-up often relied on generic machines to run its blood tests because its own proprietary Edison machines—the technology that the entire business ran on—didn’t work.

Despite it all, Draper told Bloomberg’s Emily Chang in aninterview published Thursday night, “nothing’s gone wrong with Theranos.” The venture capitalist compares Theranos to “the way Uber was attacked by taxi drivers, and Bitcoin was attacked by the banks,” he says. “Theranos is being attacked by the powers that be in big pharma, in [Holmes’s] competitors, in the world of medical insurance, the people in government who are going to be very much affected by a really cheap, really effective, wonderful solution.”

In Draper’s view, Big Pharma is terrified of Theranos, and is demanding the government regulate it in ways that it wouldn’t regulate Theranos’s competition. Instead, Draper says, “we should be really focused on the consumer. The consumers love it.” ...MORE
See our June 2015 piece "Theranos: She's Young, She's Rich, Is She A Marketing Huckster?" for the thinking of one of the heavyweights of laboratory diagnostics, Dr. Dr. Eleftherios P. Diamandis.

"Soros Says Ukraine Could Become Giant Refugee Camp for EU in Turkey's Place"

From Sputnik, July 22:

Billionaire George Soros is concerned about the situation in Turkey following Friday's failed coup attempt. Warning that Ankara could soon be moving closer to Moscow, the billionaire suggested that Ukraine may now be the EU's last line of defense against an array of threats.
Interviewed by the Italian daily Corriere della Sera, Soros, the billionaire philanthropist known in Eastern Europe for financing color revolutions, warned that the present waning of the migration crisis in Europe is temporary, and that the continent cannot hope to preserve the current situation indefinitely.

The business magnate emphasized that the number of migrants from Muslim countries is set to rise, and that the ratio of migrants to Europeans will worsen accordingly. He noted that Europe's ongoing migration crisis is one of the reasons the European Union is in "mortal danger," and that this problem must be resolved as quickly as possible.

The failed coup attempt in Turkey also increases the level of uncertainty, according to Soros, and could affect Ankara's agreement with Brussels on keeping migrants out of Europe. In any case, Soros doesn't believe that the EU should build its refugee policy on the basis of this agreement.
"One thing is clear," Soros said. "Turkey's President Recep Tayyip Erdogan is now seeking some kind of reconciliation with Russia and Vladimir Putin. I do not know what his motives are. Perhaps he wants Turkey to become a balancing factor in relations between Russia and Europe. In any case, the agreement between the EU and Turkey is a very weak foundation on which to build the EU's refugee policy."

At the same time, commenting on the possible solutions to the threats facing the EU project, Soros reiterated that one of the countries that could help rescue the bloc is Ukraine. "The EU must defend itself from external enemies and recognize that Ukraine is the most important resource at its disposal for ensuring its security."
Russian commentators didn't know quite what to make of Soros' remarks, except to say that what the billionaire was implying was using Ukraine as a pawn, perhaps all the way up to turning the country into a giant dumping ground for Middle Eastern refugees in Turkey's place....MORE

"Effective Fed Funds and Money Markets"

Brown Brothers Harriman & Co's Head of Global Markets Strategy, Marc Chandler at his Marc to Market blog:
The weighted average of the Fed funds rate has edged higher.  Following the Fed hike in December 2015, the Fed funds average around 36 bp in January before moving into a 37-38 bp range.  However, since the UK referendum it has been trading consistently around 40 bp.   
The Fed fund futures contract settles at the average effective Fed funds rate for a given month, not at the policy rate.   Ahead of next week's FOMC meeting where practically no one expects a change in policy, implied yield of the July Fed funds futures contract is 40.25 bp.   
Some dealers think that one of the factors that are keeping Fed funds firm is the preparation of changes to the US money markets as of the middle of October.  Institutional money markets that invest in a range of short-term instruments including commercial paper will be required to have a floating NAV, which is to say that the price will not be constant at one dollar.   
In addition to a floating NAV, prime funds will be able to impose liquidity fees and redemption gates if the funds liquidity fell below 30%.  At the end of the first week in July, the average weekly liquidity of prime funds was 53.4%.  Reports indicate that four prime funds had liquidity below 35%, but none were below 30%.  
Besides these prime funds will be money market funds that invest only in government paper.  They will still have a constant NAV, though the yield will be a little less than the prime funds.  Many institutions who use money markets (think businesses or asset managers) will prefer the fixed NAV. Capital preservation is more important than return for those funds.   
On the surface, it appears that there has been a huge liquidation of prime fund assets and a move into government money markets.  One set of figures suggests that the prime funds have seen an outflow of nearly a third of their assets, leaving about $1 trillion, as of early July.  However, a little more than half of the outflows appears to be prime funds converting into government only funds....MORE

Nocturnal Corn Sweats And the U.S. Heat Wave

Years ago I was corresponding with a reader in Kansas:
On Jun 4, 2008, at 9:06 PM, Climateer wrote:
...pps- Have you ever heard of Nocturnal Corn Sweats?
It's supposed to be one of the reasons for higher humidity.
98% sucks.
That's a technical term that all the best weather geeks use
She responded
nocturnal corn sweats!! no! never heard of them. I just fell of my chair I laughed so hard. Really? Seriously? I'm googling it to make sure you aren't pulling my leg.
Compared to last year, almost no one (along my drive into town, anyway) planted corn this year. which is good because it has been horribly, horribly wet at all the wrong times. lots of wheat though...
Over the next couple years I got a bit obsessed:
Nocturnal Corn Sweat News!
6/11/10 Climateer wrote
If you Google "nocturnal corn sweat" (or sweats) it still comes back 'No Results Found'.
Damn it.

I shall make it my mission to bring the term into common usage,
From every village and hamlet to the great metropoli, when some says "NCS" it won't be the National Cartoonist Society they refer to.
I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression...

Good grief, I'm channeling MLK.
Here's the latest from Northern Illinois University via the Elgin Courier-News:...
I even tried remembering high school biology. She asked:
 8/4/10  Can soybeans get night sweats too? Was out two mornings around dawn and soybe...
8/4/10 Climateer wrote

...It's all about the pores.
Corn is one of the weird C4's, I've forgotten which group/subgroup soybeans are in.
And the CAM's, ah the CAM plants.

Nocturnal Bean Sweats...hmmmm
Some people laughed back then but they aren't laughing now:
Washington Post, July 18

St. Louis Public Radio, July 20
 
DesMoines Register, July 21

Murray State University, July 19

My work here is done.
See also:

Berkshire Hathaway, Allianz Are Now Insuring Representations and Warrenties in M&A Deals

From Reuters, July 19:

Berkshire unit to insure representations in corporate mergers
Berkshire Hathaway Inc (BRKa.N) plans to begin insuring representations and warranties in mergers and other corporate transactions in the United States and Canada, the latest expansion of a fast-growing unit that Chairman and Chief Executive Warren Buffett has been building since 2013.
The unit, Berkshire Hathaway Specialty Insurance, on Tuesday said it hired Robert Underhill as senior vice president and head of its transactional liability business.

Underhill was previously a partner at U.S. law firm Locke Lord focusing on insurance mergers and acquisitions, reinsurance and other insurance transactional and regulatory matters.

Representations and warranties insurance can protect buyers and sellers from losses resulting from inaccuracies in documentation for their transactions, and can increase the prospect the transactions will eventually close. The Berkshire unit plans to offer primary and excess coverage....MORE

And July 20 at Bloomberg, here comes the competition: 

Allianz to Guard Dealmakers Against M&A Surprises in U.S. Push


Allianz SE, Europe’s largest insurer, is expanding in North America to guard commercial clients against risks in dealmaking.

The insurer will offer coverage to protect buyers from losses tied to inaccuracies during negotiations with companies that they eventually acquire, Munich-based Allianz said Wednesday in a statement. The firm is partnering with Euclid Transactional LLC, which underwrites liability insurance, for the effort in the U.S. and Canada and plans to bring the offering to Asia and Europe “in the near future.”

Allianz has been focusing on business coverage in the U.S. after striking a deal in 2014 to sell Fireman’s Fund, the insurer of luxury homes and yachts, to Evan Greenberg’s Ace Ltd. The German company opened a financial lines division in North America last year, hiring Paul Schiavone from Zurich Insurance Group AG to lead the business. The company said the timing is right for the push into so-called transactional-liability coverage, given the pace of mergers and acquisitions.

“Buyers and sellers are not always forthcoming about business operations and inherent risks”...MORE
Both stories thanks to a reader.

Thursday, July 21, 2016

We'll Have About A Year's Notice Of A Volcanic Super-Eruption That Could End Civilization

From Futurity:

We’ll have only 1-year to get ready for a super-eruption
Volcanic events large enough to devastate Earth have taken place in a number of places worldwide in the recent geological past. It seems inevitable that another super-eruption will strike in the future.
Now scientists say the warning signs would probably show up about a year before a big eruption.
That’s the conclusion of a new microscopic analysis of quartz crystals in pumice taken from the Bishop Tuff in eastern California, which is the site of the super-eruption that formed the Long Valley Caldera 760,000 years ago.

“The evolution of a giant, super-eruption-feeding magma body is characterized by events taking place at a variety of time scales,” says Guilherme Gualda, associate professor of earth and environment sciences at Vanderbilt University.

Tens of thousands of years are needed to prime the crust to generate sufficient eruptible magma. Once established, these melt-rich, giant magma bodies are unstable features that last for only centuries to few millennia.

“Now we have shown that the onset of the process of decompression, which releases the gas bubbles that power the eruption, starts less than a year before eruption.”
Bishop Tuff in California
 Bishop Tuff in California, the site of a super-eruption. (Credit: US Geological Survey)
Gualda and Stephen Sutton at the University of Chicago analyzed dozens of small quartz crystals from the Bishop Tuff. Previous investigations of quartz crystals from several super-eruptions, including Long Valley, have noted that they have distinctive surface rims. These studies concluded that the rims formed in less than a century before eruption.

The new study, published in PLOS ONE, uses a more accurate method for measuring rim growth times pinned on variations in the concentration of titanium in the crystal.

Days to months before eruption
Titanium is one of the few impurities that is incorporated into quartz in appreciable amounts and it diffuses fast enough to permit probing of time scales as short as minutes. However, it is extremely difficult to measure the small levels of titanium involved at sufficient spatial resolution. So the researchers established that the concentration of titanium in quartz directly correlates with the amount of light produced when a material is bombarded by electrons, an effect called cathodoluminescence....MORE
Related:
FT: "Twelve ways the world could end"
Listicles, Financial Times style! 
Risk: "Are we ready for the next volcanic catastrophe?"
"Is a super-volcano just 390 miles from London about to erupt?"
Laki: How A Volcano Swallowed Europe
Hmmm... Krakatoa's Baby May be Getting Ready to Erupt
Isn't it About Time for Another Iceland Volcano? (Bárðarbunga dude)
Giant underwater volcano found off Indonesia
A Potentially Very High Risk, Very High Reward Agricultural Commodity Trade
World's Oldest Weather Report Found in Egypt: It Was Raining, People Were Crabby
Risk: Supervolcano Near Pompeii Could Have Globally Catastrophic Effects
Russian Civil Defense Ministry Warns of Possible Volcanic Eruption In U.S. 
"Hot air or grave warning? Scientific report prompts talk of catastrophic ‘volcano season’"--UPDATED
What's New? There Was a Major eruption at Indonesia’s ‘Mountain of Spirits’ volcano
Volcanology: Indonesian Volcano Waking Up, Danger Zone Extended

"Nvidia’s Eye-Tracking Tech Could Revolutionize Virtual Reality" (NVDA)

Yeah, but what have you done for me lately?

NVDA NVIDIA Corporation daily Stock Chart

Before we go any further, our NVIDIA boilerplate: we make very few calls on individual names on the blog but this one is special.

They are positioned to be the brains in autonomous vehicles, they will drive virtual reality should it ever catch on, the current businesses include gaming graphics, deep learning/artificial intelligence, and supercharging the world's fastest supercomputers including what will be the world's fastest at Oak Ridge next year.
Not just another pretty face.

Or food delivery app.
That's me, quoting myself (NVIDIA Sets New All Time High On Pretty Good Numbers, "Sweeping Artificial Intelligence Adoption" (NVDA))
While we are long-time fans of this little superstar we've given up posting each time NVIDIA trades at a new all-time high: we'd have something on the blog almost every day and there would be no time to get any actual work done. However....today the stock is down $1.05 (1.95%) at $53.17 and this dropped out of one of the feedreaders.

From MIT's Technology Review, July 21:

A phenomenon first observed by Da Vinci is being used to make virtual images look more realistic.
Focus on a clock on a nearby wall. The focal point of your gaze should be in focus, while the scene around the clock is blurred, as if your brain is sketching your surroundings, or, in computer graphics terms, rendering a low-resolution version of the scene.

Nvidia is applying the same trick to rendering virtual reality, and it could help improve the realism of virtual worlds significantly. By focusing graphics rendering power on a smaller area, it is possible to sharpen the image a person sees significantly.

Leonardo da Vinci was the first person to notice this visual phenomenon, called foveal vision, in the 15th century. David Luebke, together with four other researchers at Nvidia, has spent the last nine months attempting to mimic the principle in VR by fully rendering only the specific area where a player is looking, and leaving the rest of the scene at a far lower resolution.
 This virtual scene was rendered using Nvidia’s foveal vision approach. The clock, top right, is the focus of the user’s gaze.
When the player using the Nvidia system focuses on a new area of the scene, eye-tracking software shifts the focus of the rendering in kind. To render a full scene in VR at 90 frames per second, the lowest acceptable frame rate in VR before users begin to report feelings of nausea, four million pixels must be rendered at almost a hundred times a second. But by focusing the rendering only on the player’s line of sight, huge computational savings can be made. “The performance gains are too large to be ignored,” says Luebke....MORE 
See also:
Seinfeld, Virtual Reality and Mild Revulsion
The Uncanny Valley, Interior-Design Edition
Greg Miller
The "uncanny valley" usually applies to human aesthetics. It describes that vague sense of revulsion you get when you see a fabricated person—a robot, usually—who looks aaaaalmost human … but not quite. So, for example, this lady. This dude. Anything displayed here. The "valley" refers to the emotional reactions humans have toward anthropomorphized machines, when those reactions are charted: It's the deep dip in comfort level we tend to experience, based on our finely honed survival instincts, when we humans come face-to-quasi-face with beings that are at once extremely like us and extremely not....MORE

Possibly also of interest:
June 1
Machine Learning: JP Morgan Compares Google's New Chip With NVIDIA's (GOOG; NVDA)
May 23
Huh, This NVIDIA Company May Be On To Something (NVDA)
May 16
Analysts React To NVIDIA's First Quarter Report (NVDA)
May 15 
NVIDIA: A $2 Billion Chip to Accelerate Artificial Intelligence (NVDA)
May 12
NVIDIA Sets New All Time High On Pretty Good Numbers, "Sweeping Artificial Intelligence Adoption" (NVDA)
April 13 
CERN Will Be Using NVIDIA Graphics Processors to Accelerate Their Supercomputer (NVDA)
January 5
Class Act: Nvidia Will Be The Brains Of Your Autonomous Car (NVDA)
November 2015
Stanford and Nvidia Team Up For Next Generation Virtual Reality Headsets (NVDA)
November 2015
"NVIDIA: “Expensive and Worth It,” Says MKM Partners" (NVDA)
October 2015
Quants: "Two Glenmede Funds Rely on Models to Pick Winners, Avoid Losers" (NVDA)
May 2015
Nvidia Wants to Be the Brains Of Your Autonomous Car (NVID)
We've mentioned, usually in the context of the Top 500* fastest supercomputers, that:
Long time readers know we have a serious interest in screaming fast computers and try to get to the Top500 list a couple times a year. Here is a computer that was at the top of that list, the fastest computer in the world just four years ago. And it's being shut down.
Technology changes pretty fast. 
That was from a 2013 post.

Among the fastest processors in the business are the one's originally developed for video games and known as Graphics Processing Units or GPU's. Since Nvidia released their Tesla hardware in 2008 hobbyists (and others) have used GPU's to build personal supercomputers.
Here's Nvidias Build your Own page.
Or have your tech guy build one for you.

In addition Nvidia has very fast connectors they call NVLink.
Using a hybrid combination of IBM Central Processing Units (CPU's) and Nvidia's GPU's, all hooked together with the NVLink, Oak Ridge National Laboratory is building what will be the world's fastest supercomputer when it debuts in 2018.

As your kid plays Grand Theft Auto....

"Corn Belt farmland prices fall again, despite crop price firmness"

Corn seems to be headed for new yearly lows, currently 340-0 down 4-2 cents
From Agrimoney:
The spring-time rally in crop prices has not been echoed in buoyancy in land prices, with Corn Belt values landing investors a fourth successive quarter of losses, even factoring in income such as rents.

Total returns on Corn Belt land – including both land price appreciation and rents – proved notably better in the April-to-June period than in the previous quarter, when they came in at a negative 3.3%, data from the National Council of Real Estate Investment Fiduciaries showed.
However, at a negative 0.03%, "on continued depreciation", they remained in the red for a fourth quarter, a period over which investors have seen a total negative return of 6.5%.
The continued weakness came despite a rally during the April-to-June period in prices of corn and soybeans, which the Corn Belt is particularly noted for producing, amid concerns over weather setbacks.
Prices down 6%
And land prices have fallen further since the end of June, according to a separate survey by Creighton University of values in major Midwest agricultural states, including Corn Belt majors such as Illinois and Iowa.
A farmland price index compiled by Creighton came in at 31.3 for July, down 1.0 points month on month, and well below the 50.0 level which indicates a neutral market.
"This is the 32nd straight month the index has languished below growth neutral 50.0," the university said.
In terms of actual prices, bankers surveyed by Creighton believe US farmland values are now down by 6% over the past 12 months.
Orchards vs corn fields
However, the Creighton data did offer some sign of some improvement this month in market conditions outside major crop-growing states, with values in Wyoming, for instance, better known for livestock output, at least declining at a slower pace.
And the Ncreif data showed land outside the Corn Belt offering positive total returns, particularly in areas with large areas of farmland put down to permanent crops, such as almonds, apples and stone fruits, rather than to annual crops, such as corn....MORE

"Turkey to Temporarily Suspend European Convention on Human Rights..."

From Hürriyet Daily News:
Turkey will temporarily suspend the implementation of its obligations emanating from the European Convention on Human Rights (ECHR) in line with the declaration of a state of emergency in the country, a senior government official has said, while assuring that fundamental rights and freedoms will not be affected during this period.

“France proclaimed a state of emergency, too. And they have suspended the ECHR upon article 15 of the convention,” Numan Kurtulmuş, deputy prime minister and government spokesperson, told a group of Ankara bureau chiefs of media outlets on July 21. ...MORE

"Watches as investments: How the Rolex Oyster Perpetual Cosmograph Daytona might be the most collectible watch ever, if only you could get your hands on one"

In the same vein as:
"I never smile if I can help it. Showing one's teeth is a submission signal in primates. 
When someone smiles at me, all I see is a chimpanzee begging for its life.

seeing this story's headline, my first thoughts were "Lack of liquidity, wide bid/ask spreads".
It's all in how you look at the world.

From City AM:
Last year two anonymous phone bidders made history when their feverish nine minutes of bidding ended with a Patek Philippe 5016A selling for $7.3m – 10 times its estimate. The crowd at the La Reserve Hotel in Geneva burst into spontaneous applause, delighted to have witnessed the sale of the most expensive wrist-watch ever.

Stories like this clearly don't come along every day, but ones in which watches end up selling for six or even seven figures are increasingly common. In May a Rolex Daytona “Paul Newman” Ref. 6263, one of only two known to exist with a brown “tropical” dial, sold for a shade over $2m.

These tales are music to the ears of watch collectors – the idea that one day their endeavours will end not only with a box full of wonderful timepieces, but a big-money payday. It's the ultimate example of having your cake and eating it: you get to own some of the most technically accomplished items on the planet – wearable status-symbols that are more practical than a yacht, more sophisticated than a Ferrari, more enduring than a fine wine – and you can make a profit, too.

Rolex reignited the debate at this year’s Baselworld with its double-whammy announcement that it is both releasing a new Oyster Perpetual Cosmograph Daytona, and discontinuing the previous model, leading to a frantic gold-rush to get hold of what's being dubbed the most collectible watch ever made.
“I've been working in the industry a long time and I don't think there's been a single watch launch that's had the same reaction,” says Nick Tolfree, Boutique Manager at Rolex, One Hyde Park. “We had about 70 cold calls about it the day it was announced. Based on our past allocation, that would fill us up for six years. We did an event in May and two guys – one wearing a Vacheron, the other an AP – slammed down their black Amexs and said 'I'll pay higher than the other guy'. We had to politely decline them both.”...
...MORE

Volatility: "Quantedge Capital Laughs At Your Measly Little Risk Profiles"

From DealBreaker:
The year 2016 hasn’t been especially kind to hedge funds. But it’s been kinder to some than to others. On one end of the spectrum we find Bill Ackman and Pershing Square Asset Management. On the other, Quantedge Capital. The Singapore-based risk premium fund is up 40% this year, thanks to its strong stomach.
Quantedge, by comparison, maintains a common measure of risk known as annualized volatility at a constant and abnormally high level of 30%, two to three times that sought by similar hedge funds, according to investors....MORE
Although the post isn't by proprietor Bess Levin the tags at the bottom of the post sure bear her stamp:

The Old Shell Game: Scammy Little New Zealand Companies Try To Escape Tax EVERYWHERE

A couple years ago naked capitalism had a post on the New Zealand shell company racket we headlined as "Money Laundering With Inga Slavska and the Sinaloa Cartel". Today they have more.

From naked capitalism:

Dodgy New Zealand Companies: Mapping Their Global Footprint Since 2009
New Zealand Foreign Trusts, to be radically reformed after the recently-announced wholesale adoption of the Shewan report’s recommendations, are just the tip of the iceberg in terms of the ethically challenged and outright criminal use of a range of New Zealand corporate entities overseas.

Aside from trusts, New Zealand registered companies, financial service providers and building societies all feature too. Countries as diverse as Brazil, China, Malta, Latvia, Denmark, and the United States have felt their impact. Ponzi schemes, drugs, arms, tax scams and money laundering all feature alongside the simply bizarre. Usually the perpetrators are not New Zealanders. But New Zealanders have proven themselves willing to act as fronts for some very dodgy people offshore.
Concern about the behaviour of NZ registered, but overseas operating companies ramped up after the activities of shell company SP Trading came to light in 2009.
The aircraft was forced down while travelling over Thai airspace. When investigated in Bangkok it was found to contain 35 tonnes of North Korean weaponry including rocket-propelled grenades, missile and rocket launchers, missile tubes, surface to air missile launchers, spare parts and other heavy weapons to an estimated value of US$18 million. In the extensive publicity of the incident that followed there was considerable focus on the fact that the lessee of the plane was a New Zealand registered shell company [SP Trading].
This extract is taken from a High Court judgment from Justice Raynor Asher. The judgment blocked an attempt by Lu Zhang, the sole director of SP Trading whose day job was flipping burgers at Burger King, to be discharged without conviction having pleaded guilty to making 74 false statements under the Companies Act. (She was convicted and discharged without further penalty).
The weapons on the plane were bound for Iran in contravention of United Nations sanctions.
Since then, curious dubious, or outright criminal overseas activities of dodgy New Zealand companies, financial service providers, building societies and foreign trusts have remained in the news somewhere or other, almost unabated.

The details
Through the map below we have highlighted the activities of many of these entities, and the parts of the world where their activities have been felt, and in some cases where the perpetrators were located. It goes without saying that theses activities have not bolstered NZ’s international reputation.
Hovering your mouse over the dots on the map will bring up headlines and links to stories. We’ve mined our memories for a wide ranging smorgasbord. That said, there are undoubtedly others that could be here too, and we’re happy to take suggestions.
Punching above our weight
NZ is far from alone in having problems in the shadowy world of offshore finance. But the country, partly due to having a cheap and simple companies registration system, and being an easy place to do business, coupled with an international reputation for being among the least corrupt nations around, has proven ripe for exploitation.

And Swiss cheese style regulatory holes don’t help. For example, NZ foreign trusts. In a great example of the law of unintended consequences, when set up just right, NZ foreign trusts can escape tax everywhere....
...MORE

Possibly also of interest:
"SEC Suspends Trading in 128 Dormant Shell Companies"
London's Russian IPO's
Junior Gold Miners Consider Cashing Out, Pursuing Medicinal Marijuana Opportunities
SEC Approves Eight Russian Shell Companies (AMOK.OB)
Better Get The Leg Irons Boys.
These Ain't Regular Criminals,
These is Stockbrokers.
-One of Climateer's favorite Barron's headlines.
Oh happy day.
Long time readers know 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.

As they say on the nature shows:
"Sadly now, there can be but one outcome"... 
The Law Firm That Supplies Shell Companies To Oligarchs, Money Launderers, and Dictators
A Look at the Old Shell Game: Reverse Mergers From China and Russia (CGA; SGAS; QING; AGVO; AMOK)
Tax Havens--"Kenya: want a shell company? No question" 

"Which corporate bonds has the ECB been buying?"

Following up on yesterday's "Climateer Line of the Day: In With The In Crowd Edition".
From Bond Vigilantes:
Having recently blogged about the potentially eligible universe of the Corporate Sector Purchase Programme (CSPP), we were naturally eager to find out which corporate bonds the European Central Bank (ECB) has actually been buying. On Monday, the ECB eventually published the highly-anticipated list of their bond holdings.

Except that’s not what happened. Instead of the ECB releasing a neat consolidated list, each of the six national central banks carrying out the bond purchases disseminated their statements separately on the ECB’s webpage. Apart from the blatant lack of integration, they didn’t appear to be overly concerned with consistency either (see below). In fact, they took inconsistencies to almost comic levels. Most banks chose to only state International Securities Identification Numbers (ISINs), presented in a variety of layouts. The German Bundesbank, being a stickler for details, felt the need to go above and beyond by additionally mentioning security and issuer names – Dankeschön. Banco de España did not consider it necessary to provide an English language version of their document – No importa. The other banks did, even the proud Banque de France, which however didn’t release any security identifiers on the ECB’s webpage but kindly told interested readers to do their own research on Bloomberg – Incroyable!
https://www.bondvigilantes.com/content/uploads/2016/07/which-corporate-bonds-ecb1.png
Before diving into the analysis, it is important to point out that we only know the total volume of purchases – EUR 10.43 billion between 8th June and 15th July – and the identity of the 458 corporate bonds that have been bought in this period. But we do NOT have the portfolio weights. The average position size is EUR 22.8 million but the dispersion around the mean is entirely unknown. To give an example, Deutsche Bahn is the most popular issuer in terms of ISIN count: 12 of their bonds have been purchased, which puts them ahead of Telefonica (11) and BMW (10). But without knowing the size of the holdings we cannot compute weighted averages and are thus unable to draw any firm conclusions with regards to the actual risk exposure towards Deutsche Bahn.

Nonetheless, we can apply basic percentile analysis to get a better understanding of the ECB’s corporate bond holdings. The median asset swap (ASW) spread and median yield to maturity (YTM) of the CSPP holdings are 20 bps and 14 bps, respectively. In comparison, the corresponding median values of the EUR-denominated investment grade (IG) non-bank index, a crude proxy for the eligible bond universe, are both above 30 bps. The middle 50% of CSPP spread and YTM values (i.e., from the 25th to the 75th percentile) are less dispersed and shifted to lower values, compared to the index. Remarkably, more than a third (c. 36%) of the CSPP bonds are currently trading at a negative YTM. This is an indication that the CSPP holdings might be more defensively positioned than the index, but as mentioned before we do not know the portfolio weights. In terms of duration, CSPP median (5.1 years) and dispersion are very close to the index....MORE
Recently:

Frontrunning the ECB: "Investors in corporate bond ‘land grab’ ahead of ECB buying"--UPDATED
"The ECB’s momentous step into corporate asset purchases"
Deutsche Bank On the European Central Bank: We Are Governed By Idiots
Pictet: "The Pricing And Valuation Of Bonds No Longer Reflects Fundamentals" - Why This Matters

Wednesday, July 20, 2016

"Google’s Secretive and Deep-Pocketed Foe Heavily Funded by Gates, Hewlett Foundations"

From the San Jose Mercury-News' SiliconBeat:
For the second time in three months, the shadowy Campaign for Accountability has attacked Google.
First, at the end of April, the group launched “The Google Transparency Project” with a report on the revolving door between Google and the federal government. On Tuesday, Campaign for Accountability put out a new report suggesting Google-funded academics were influencing federal policymaking on the sly. 
SiliconBeat called up Campaign for Accountability with regard to both reports, and both times asked who funded it — certainly a reasonable question of an organization purportedly dedicated to accountability. The answer was essentially the same Tuesday as it was in April. 
“This is something that we have not disclosed in the past and we do not disclose it,” deputy director Daniel Stevens said Tuesday. Donors wouldn’t donate without anonymity, he suggested. Stevens declined to answer when asked whether any funding comes from companies competing with Google. 
Secrecy, for this group, goes deeper than its funding. It markets itself online as a “project that uses research, litigation and aggressive communications to expose misconduct and malfeasance in public life.” Nowhere does it reveal that it’s part of an extremely deep-pocketed public-interest group, New Venture Fund, that took in $178 million in donations in 2014, the most recent year for which data was available. (Full disclosure: To find out who was behind the Campaign for Accountability, SiliconBeat became a donor to it; for our $1 gift, we received a tax-deduction receipt from New Venture Fund.) 
New Venture Fund is heavily supported by the Bill & Melinda Gates Foundation and the William and Flora Hewlett Foundation. Between 2014 and the present, the Gates Foundation has given the group $94 million and the Hewlett Foundation has given it $17 million. The Ford Foundation has given NVF $12 million since the start of last year....MORE