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“Where did the money go?” Part 5: Turning up like a bad penny

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David Dayen publishes part 5 of his Penny Stock Chronicles in The Intercept. The blurb:

The penny stock Chris DiIorio invested in that crashed and burned was one of many stocks with similar trajectories traded by the same two giant companies. But if one was the buyer and the other the seller, how could this be in both of their interests?

It’s worth reading the entire series.

Written by LeisureGuy

26 September 2016 at 9:57 am

Big Space vs. Little Space: Big and Expensive vs. Agile and Cheap

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Freeman Dyson has an interesting review in the NY Review of Books:

How to Make a Spaceship: A Band of Renegades, an Epic Race, and the Birth of Private Spaceflight
by Julian Guthrie
Penguin, 432 pp., $28.00

Beyond Earth: Our Path to a New Home in the Planets
by Charles Wohlforth and Amanda R. Hendrix
Pantheon, 320 pp., $27.95

All These Worlds Are Yours: The Scientific Search for Alien Life
by Jon Willis
Yale University Press, 214 pp., $30.00

Robert Dicke was an experimental physicist at Princeton University. He liked to build things with his own hands. When NASA began making plans for landing astronauts on the moon, he thought of a scheme that would allow the astronauts to make a serious contribution to science. This would be good for science and also good for the astronauts. The scheme was to measure accurately the distance between two objects, one fixed on Earth and the other fixed on the moon. The measurements would give us improved understanding of the dynamics of the Earth-moon system.

The object on Earth would be a laser emitting very short pulses of light. The object on the moon would be a tray holding a hundred corner-cube glass reflectors. A corner cube is a piece of solid glass cut so as to reflect light efficiently. The corner cubes would reflect the laser pulses back to the laser. The timing of the reflected pulses would measure the distance between the laser and the tray. The astronauts would plant the tray on a firm piece of ground on the moon facing Earth. Because the corner cubes reflect light straight back to its source, the small variations in the orientation of the moon as it moves in its orbit do not disturb the measurement.

Dicke was a practical person. He went to the Edmonds Scientific Company toy store down the road from Princeton and bought a hundred high-quality glass corner-cube reflectors for $25 each. He asked the machine shop at the Princeton University physics department to attach the cubes to a metal tray with a stand to support it. The complete package, including materials and labor, cost a total of $5,000. Then he got in touch withNASA officials and told them he would be happy to supply the package at this cost for a moon mission. The NASA officials accepted his proposal enthusiastically, but they said, “You do not get to build it. We get to build it.” The proposal to build the package was put through the normal bureaucratic NASA acquisition process. According to Dicke, NASA paid $3 million to an industrial contractor for it. The reflectors were duly installed on the moon and are still reflecting laser pulses as Dicke intended. Doing things the NASA way increased the cost by a factor of six hundred.

The moon missions happened long ago. Now, fifty years later, there is still a clash between two cultures. There is Big Space, with big corporations receiving contracts from NASA to produce custom-built hardware and software following NASAprocedures at enormous cost. And there is Little Space, aiming to carry out space operations in the Dicke style, using hardware and software mass-produced for other purposes by companies in a competitive market at vastly lower cost. The Big Space culture is still dominant, carrying out spectacularly successful high-cost missions, such as the Cassini mission that sent back detailed pictures of the satellites of Saturn, and the Kepler mission that discovered thousands of planets orbiting around other stars. But there are now several start-up companies operating independently of NASA in the Little Space culture, hoping to do space missions that will be bolder, quicker, and cheaper.

Will Marshall was a young engineer working in the Big Space culture at the Jet Propulsion Laboratory (JPL), a NASA center that builds big expensive spacecraft such as Cassini. He rebelled against that culture and decided to do things differently. Along with two other NASA alumni, he started his own company and built a satellite that he called Dove in his garage in Cupertino. The company then changed its name to Planet Labs and built 150 Dove satellites in a few years, with 150 more to be launched next year. His satellites are radically smaller and cheaper than anything built at the JPL, but they are equally well engineered and more agile. They belong to the Little Space culture, using modern miniaturized cameras and guidance systems and data processors, like those that are mass-produced for the cell phone and recreational drone industries.

A Dove satellite weighs about ten pounds and costs under a million dollars, including launch and operations and a communication system for distributing large amounts of information to the Planet Labs customers. The information consists of pictures of the ground taken from low earth orbit, with accurate color to show the type and condition of vegetation, with complete coverage of the planet every few days, and with “resolution”—the size of the smallest patches that can be seen in the picture—about ten feet. The customers are farmers looking at crops, foresters looking at trees, fire-control authorities looking at fires, environmentalists looking at pollution and erosion of land, and government officials at all levels looking at ecological problems and environmental disasters.

Marshall likes to describe how he lost twenty-six Dove satellites in 2014. They were sitting together on a big rocket that exploded on the launch-pad. The loss hardly affected his business, since he had had nine successful launches and only one failure. The lost satellites were quickly replaced and the replacements put in orbit. The great advantage of the Little Space culture is that every mission is cheap enough to fail. It makes a huge difference to the running of a business if failures are acceptable. Missions in the Big Space culture are too big to fail. In that culture they typically take a decade to plan and a decade to build. A Dove satellite is planned and built in a few months. Occasional failures in the Little Space culture are a normal part of the cost of doing business. If there are too many failures, the company running the business may collapse, but that is not an unacceptable disaster. Start-up companies evolve in a Darwinian ecology, where the fit survive and the unfit collapse.

Planet Labs and other start-up companies have proved that the Little Space culture is ready to take over a large share of future unmanned activities in space. The question remains open whether the Little Space culture can have a similarly liberating effect on manned missions. Can we expect to see manned missions becoming radically cheaper, so that we can travel with our machines at costs that ordinary people or institutions can afford? Neither Big Space nor Little Space shows us a clear path ahead to the fantasy worlds of science fiction, where bands of brave pioneers build homes and raise children among the stars.

Halfway between Big Space and Little Space, there is a group of companies that grew rapidly in recent years, led by SpaceX, a company founded in 2002 by Elon Musk. Musk is a young billionaire who has dreams of founding human colonies on Mars. His company builds big spacecraft paid for by big NASA contracts in the Big Space style, but he tries to keep the design and manufacture cheap and simple in the Little Space style. In ten years he has built a launcher, Falcon, and a transfer vehicle, Dragon, which ferry unmanned payloads from the ground to the International Space Station. He intends soon to include astronauts in his payloads. The SpaceX culture is a compromise, using commercial competition to cut costs while relying on the government for steady funding. The twenty-first century is likely to see manned missions exploring planets and moons and asteroids, and possibly making spectacular discoveries. But this century is unlikely to see costs of such missions low enough to open space to migration and settlement by ordinary citizens.

The three books under review describe space activities belonging to the Big Space and Little Space cultures that are now competing for money and public attention. Each book gives a partial view of a small piece of history. Each tells a story within the narrow setting of present-day economics and politics. None of them looks at space as a transforming force in the destiny of our species. . .

Continue reading. Later in the review:

. . . With Tsiolkovsky, we leave behind the parochial concerns of the twenty-first century and jump ahead to a longer future. In the long run, the technology driving activities in space will be biological. From this point on, everything I say is pure speculation, a sketch of a possible future suggested by Tsiolkovsky’s ideas. Sometime in the next few hundred years, biotechnology will have advanced to the point where we can design and breed entire ecologies of living creatures adapted to survive in remote places away from Earth. I give the name Noah’s Ark culture to this style of space operation. A Noah’s Ark spacecraft is an object about the size and weight of an ostrich egg, containing living seeds with the genetic instructions for growing millions of species of microbes and plants and animals, including males and females of sexual species, adapted to live together and support one another in an alien environment.

After the inevitable mistakes and failures, we will have acquired the knowledge and skill to build such Noah’s Arks and put them gently into suitable places in the sky. Suitable places where life could take root are planets and moons, and also the more numerous cold dark objects far from the sun, where air is absent, water is frozen into ice, and gravity is weak. The purpose is no longer to explore space with unmanned or manned missions, but to expand the domain of life from one small planet to the universe. Each Noah’s Ark will grow into a living world of creatures, as diverse as the creatures of Earth but different. For each world it may be possible to develop genetic and other instructions for growing a protected habitat where humans can live in an Earth-like environment. The expansion of human societies into the universe will be a small part of the expansion of life. After the expansion of life and the expansion of human societies have started, the new ecologies will continue to evolve in ways that we cannot plan or predict. The humans in remote places will then also have the freedom to evolve, so that they can move out of protected habitats and walk freely on the worlds where they have settled.

The essential new species, enabling Noah’s Ark communities to survive in cold places far from the sun, will be warm-blooded plants. A warm-blooded plant is a species with leaves and flowers and roots and shoots in a central structure, kept warm by sunlight or starlight concentrated onto it by mirrors outside. The mirrors are cold, separated from the warm center by a living greenhouse with windows that let the light come in but stop heat radiation from going out. The mirrors are attached to the greenhouse like feathers on a peacock. The mirrors and the greenhouse perform the same functions for a warm-blooded plant that fur and fat perform for a polar bear.

The entire plant, with the warm center and the greenhouse and the mirrors, must grow like a mammal inside its mother before it can be pushed out into the cold world. The new species of plants will be not only warm-blooded but also viviparous, growing the structures required for independent living while still inside the parent plant. To make viviparous plants possible, the basic genetic design of warm-blooded mammals must be understood and transferred to become a new genetic design for plants. Our understanding and mastery of genetic design will probably be driven by the needs of medical research, aimed at the elimination of disease from human, animal, and plant populations. Warm-blooded and viviparous plants will fill empty ecological niches on Earth before they are adapted for life support in Noah’s Arks. They may make Antarctica green before they take root on Mars.

Almost all the current discussion of life in the universe assumes that life can exist only on worlds like our Earth, with air and water and strong gravity. This means that life is confined to planets and their moons. The sun and the planets and moons contain most of the mass of our solar system. But for life, surface area is more important than mass. The room available for life is measured by surface area and not by mass. In our solar system and in the universe, the available area is mostly on small objects, on comets and asteroids and dust grains, not on planets and moons.

When life has reached the small objects, it will have achieved mobility. It is easy then for . . .

Written by LeisureGuy

25 September 2016 at 10:52 am

Part 4 of “Where did the Money go?”: Calling the SEC

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David Dayen continues his series on an institutional financial scam using penny stocks; here’s the blurb for Part 4:

Penny stock gadfly Chris DiIorio tells the SEC about his suspicion that Knight Capital is tanking penny stocks on purpose and racking up unsustainable balance-sheet liabilities. But that leads to another mystery: Why don’t they seem to care?

The entire series so far is very much worth reading.

Written by LeisureGuy

25 September 2016 at 10:38 am

A headline that made me laugh: “Monsanto Agrees to Use Gene-Editing Tool CRISPR Responsibly”

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Here’s the article.

From the article:

. . . CRISPR/Cas9 has been taking the world by storm since it was first developed in 2013by researchers at the Broad Institute. The gene-editing technology works by taking advantage of a property of DNA called clustered regularly interspaced short palindromic repeats, or small repetitions of DNA base sequences. These sequences produce an enzyme called Cas9, which essentially functions as a pair of genetic scissors which can cut the DNA sequences at certain points to add or remove small DNA segments.

Yet the ease with which researchers and companies like Monsanto could use gene-editing technology to irreversibly fuck with living things like people and plants has also raised concern that the technology might become widely deployed without understanding the consequences. This is why the “responsible use” of CRISPR/Cas9 cited by Rozen is a key stipulation in Monsanto’s latest move to corner the GMO industry (as the most recent acquisition of the chemical company Bayer, Monsanto and its affiliates now control a full 25 percent of the world’s seeds and pesticides).

Monsanto has never been a company that has been particularly lauded for doingresponsible things, and its forays into genetically modified plants have had a number of unintended consequences, such as encouraging pesticide resistant “super bugs” and weeds. In order to ensure more responsible use of this powerful gene-editing tool, the agreement prohibits Monsanto from using CRISPR/Cas9 to promote gene drives (where a genetically modified trait, such as pesticide resistance, is intentionally spread through an entire plant population), the production of sterile “terminator” seeds, or the production of tobacco to be used for smoking.

Gene drives were recently cited as a concern in a National Academy of Sciences reporton the topic since genetically modified plant traits could ravage ecosystems in ways that aren’t yet fully understood. . .

This will not end well.

Written by LeisureGuy

24 September 2016 at 1:54 pm

Naked Shorts Can’t Stay Naked Forever

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This is the most amazing series. Today is Part 3 of David Dayen’s series on an amazing scam, with this blurb:

Who engages in massive trades in penny stocks on the industry’s own “chill list”? And what happens when you sell a stock you don’t have? Victimized investor Chris DiIorio finds the answers in plain sight and wonders why no one else seems to care.

Earlier parts are found here. It really is a criminal enterprise.

Written by LeisureGuy

24 September 2016 at 12:38 pm

Inside the secret world of wealth managers

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Also in the Guardian, Brooke Harrington reports:

The Pritzker family is one of the wealthiest in the United States. Their assets, which amount to $15bn, are held in 60 companies and 2,500 trusts, using structures and strategies that Forbes magazine – normally a cheerleader for wealthy elites – describes with an unusual hint of moral distaste as “shadowy … constructed to discourage outside inquiry – and brilliantly exploitative of loopholes in the tax code.”

This complex asset-holding structure was created not by the Pritzker family itself but by its lawyers, accountants, tax specialists and investment advisers. In this respect, the Pritzkers are no different to tens of thousands of super-rich families and individuals worldwide, who use the services of wealth managers. These professionals not only shelter wealth from taxation but, in the words of one academic paper, serve to “obscure concentrations of economic power”, using vehicles that make it difficult, if not impossible, to identify the true owners of wealth.

The work of wealth managers has been described by some leading practitioners as a defence against the depredations of “confiscatory states.” Much of these professionals’ day-to-day practice occurs in an ethical grey area – a realm of activity that is formally legal but socially illegitimate. This includes the use of trusts, offshore corporations and similar tools to help clients avoid paying tax, debts to creditors or alimony to ex-spouses. Following the financial crisis and news stories such as the Panama Papers, these tactics – many of which are also used by corporations to avoid taxation and regulation – are attracting increasing public attention and condemnation.

The profession – whose main representative body is the London-based Society for Trust and Estate Practitioners (Step) – has been singled out for blame in several countries by government agencies concerned with tax evasion, money laundering, and growing worldwide wealth inequality. In its 2006 Seoul declaration, the Organisation for Economic Cooperation and Development (OECD) made special mention of the roles played by ‘‘law and accounting firms, other tax advisers and financial institutions” in helping companies and individuals find ways round international laws. In 2003, the now-retired Democrat senator Carl Levin complained to a US Senate subcommittee about the asset-holding structures created by wealth managers to obscure their clients’ assets: “Most are so complex that they are Megos – ‘My Eyes Glaze Over’ type of schemes. Those who cook up these concoctions count on their complexity to escape scrutiny and public ire.”

As world wealth has grown to record levels in recent years – to an estimated $241 trillion – inequality has also grown, with 0.7% of the global population owning 41% of the assets. Wealth managers are estimated to direct the flows of up to $21tn in private wealth, resulting in about $200bn in lost tax revenues globally each year. In effect, these professionals detach assets from the states that wish to tax and regulate them, creating a form of capital that is, like its owners, transnational and hypermobile. Doing so involves creating not just asset-holding and tax-avoidance structures but a new body of transnational institutions, which are expanding outside of any democratic process of checks and balances. In this way, the rise of the super-rich and the wealth management industry is creating an elite who are increasingly ungoverned and ungovernable.

The wealthy and powerful are notoriously difficult to study. Within this domain, wealth management presents particular challenges, as the profession depends on secrecy and is governed by a code of conduct that requires strict privacy.

As a sociologist intent on understanding the world of wealth management, I started my research by going back to school. In November 2007, I enrolled in a two-year wealth management training programme. My goal was to obtain a credential that is now the accepted global standard for practitioners: the TEP, or Trust and Estate Planning certification. To earn the credential, you need to pass five courses in key domains of technical competence: trust law, corporate law, investments, finance, and accounting.

Between 2008 and 2015, I conducted 65 interviews with wealth managers in 18 countries, including Switzerland, Hong Kong, Singapore, Mauritius, and British crown dependencies and overseas territories such as Guernsey, Jersey, the British Virgin Islands and the Cayman Islands. I also conducted interviews in the newer financial centres, particularly those serving the growing wealth of Asia, such as the Seychelles.

Only once my findings started to be published, about six years into the project, did anyone treat me with open hostility. In August 2013, I conducted a prearranged interview in the British Virgin Islands with a white British man in his 60s, who was a banker by training. He greeted me by saying that he had read my two recently published papers and found my work to be “left-leaning” and “disapproving of what the [wealth management] industry and wealthy people are doing”. He added that the islands’ wealth management community were all wondering what I was doing here. Although he graciously answered my interview questions, he was not done with the subject of my “agenda”. At the end of the interview, . . .

Continue reading. And there’s much more. In particular, the iron fist is revealed in the very next paragraph.

Written by LeisureGuy

24 September 2016 at 12:34 pm

The long fight, humans v. rats, may be drawing to a close

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Very interesting article by Jordan Kisner in the Guardian:

First, the myths. There are no “super rats”. Apart from a specific subtropical breed, they do not get much bigger than 20 inches long, including the tail. They are not blind, nor are they afraid of cats. They do not carry rabies. They do not, as was reported in 1969 regarding an island in Indonesia, fall from the sky. Their communities are not led by elusive, giant “king rats”. Rat skeletons cannot liquefy and reconstitute at will. (For some otherwise rational people, this is a genuine concern.) They are not indestructible, and there are not as many of them as we think. The one-rat-per-human in New York City estimate is pure fiction. Consider this the good news.

In most other respects, “the rat problem”, as it has come to be known, is a perfect nightmare. Wherever humans go, rats follow, forming shadow cities under our metropolises and hollows beneath our farmlands. They thrive in our squalor, making homes of our sewers, abandoned alleys, and neglected parks. They poison food, bite babies, undermine buildings, spread disease, decimate crop yields, andvery occasionally eat people alive. A male and female left to their own devices for one year – the average lifespan of a city rat – can beget 15,000 descendants.

There may be no “king rat”, but there are “rat kings”, groups of up to 30 rats whose tails have knotted together to form one giant, swirling mass. Rats may be unable to liquefy their bones to slide under doors, but they don’t need to: their skeletons are so flexible that they can squeeze their way through any hole or crack wider than half an inch. They are cannibals, and they sometimes laugh (sort of) – especially when tickled. They can appear en masse, as if from nowhere, moving as fast as seven feet per second. They do not carry rabies, but a 2014 study from Columbia University found that the average New York City subway rat carried 18 viruses previously unknown to science, along with dozens of familiar, dangerous pathogens, such as C difficile and hepatitis C. As recently as 1994 there was a major recurrence of bubonic plague in India, an unpleasant flashback to the 14th century, when that rat-borne illness killed 25 million people in five years. Collectively, rats are responsible for more human death than any other mammal on earth.

Humans have a peculiar talent for exterminating other species. In the case of rats, we have been pursuing their total demise for centuries. We have invented elaborate, gruesome traps. We have trained dogs, ferrets, and cats to kill them. We have invented ultrasonic machines to drive them away with high-pitched noise. (Those machines, still popular, do not work.) We have poisoned them in their millions. In 1930, faced with a rat infestation on Rikers Island, New York City officials flushed the area with mustard gas. In the late 1940s, scientists developed anticoagulants to treat thrombosis in humans, and some years later supertoxic versions of the drugs were developed in order to kill rats by making them bleed to death from the inside after a single dose. Cityscapes and farmlands were drenched with thousands of tons of these chemicals. During the 1970s, we used DDT. These days, rat poison is not just sown in the earth by the truckload, it is rained from helicopters that track the rats with radar – in 2011 80 metric tonnes of poison-laced bait were dumped on to Henderson Island, home to one of the last untouched coral reefs in the South Pacific. In 2010, Chicago officials went “natural”: figuring a natural predator might track and kill rats, they released 60 coyotes wearing radio collars on to the city streets.

Still, here they are. According to Bobby Corrigan, the world’s leading expert on rodent control, many of the world’s great cities remain totally overcome. “In New York – we’re losing that war in a big way,” he told me. Combat metaphors have become a central feature of rat conversation among pest control professionals. In Robert Sullivan’s 2014 book Rats, he described humanity’s relationship with the species as an “unending and brutish war”, a battle we seem always, always to lose.

Why? How is it that we can send robots to Mars, build the internet, keep alive infants born so early that their skin isn’t even fully made – and yet remain unable to keep rats from threatening our food supplies, biting our babies, and appearing in our toilet bowls?

rankly, rodents are the most successful species,” Loretta Mayer told me recently. “After the next holocaust, rats and Twinkies will be the only things left.” Mayer is a biologist, and she contends that the rat problem is actually a human problem, a result of our foolish choices and failures of imagination. In 2007, she co-founded SenesTech, a biotech startup that offers the promise of an armistice in a conflict that has lasted thousands of years. The concept is simple: rat birth control

The rat’s primary survival skill, as a species, is its unnerving rate of reproduction. Female rats ovulate every four days, copulate dozens of times a day and remain fertile until they die. (Like humans, they have sex for pleasure as well as for procreation.) This is how you go from two to 15,000 in a single year. When poison or traps thin out a population, they mate faster until their numbers regenerate. Conversely, if you can keep them from mating, colonies collapse in weeks and do not rebound.

Solving the rat problem by putting them on the pill sounds ridiculous. Until recently no pharmaceutical product existed that could make rats infertile, and even if it had, there was still the question of how it could be administered. But if such a thing were to work, the impact could be historic. Rats would die off without the need for poison, radar or coyotes.

SenesTech, which is based in Flagstaff, Arizona, claims to have created a liquid that will do exactly that. In tests conducted in Indonesian rice fields, South Carolina pig farms, the suburbs of Boston and the New York City subway, the product, called ContraPest, caused a drop in rat populations of roughly 40% in 12 weeks. This autumn, for the first time, the company is making ContraPest available to commercial markets in the US and Europe. The team at SenesTech believes it could be the first meaningful advance in the fight against rats in a hundred years, and the first viable alternative to poison. Mayer was blunt about the implications: “This will change the world.”

Mayer is a tall, vigorous woman in her mid-60s with bright eyes, spiky grey hair and a toothy grin. Her ideologies of choice are Buddhism and the Girl Scouts. “It’s kind of my core,” she said of the latter, “to do for others.” In conversation, her manner is so upbeat that she seems to be holding forth radiantly before an audience or on the verge of bursting into song. When asked how she is doing, she frequently responds in a near-rapture: “If I was any better, I’d be a twin!” – she also appears to enjoy watching people wonder whether this is an expression they should know.

When I took a seat in her office earlier this year, she clapped her hands triumphantly and said “Ooh! You’re sitting in history and strength!” There was a pause. “I had a feng shui person come and do my office,” she explained. . .

Continue reading.

There’s a lot more, and it’s interesting, informative, and intertaining (the three I’s). Later in the article:

It sounds crazy: a band of animal lovers and firemen in the mountains of Arizona, led by a Buddhist girl scout, making a pink milkshake for rats that may eventually improve the lives of millions of people. They are unruffled by scepticism: In the middle of one interview, Mayer forgot a detail and yelled towards the door, “Cheryl, who said to you, ‘That’s just not how we do it?’” Dyer hollered back from the other room. “Which time?” In response, they point to hard science, solicitations from governments and companies around the world, and an endorsement from Stephen Hawking, who featured them on his documentary mini-series Brave New World.

Written by LeisureGuy

24 September 2016 at 11:08 am

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