Finnish Fund Manager Launches "Buffett-In-A-Box" A.I.-Based Fund... There"s Just One Thing

Amid the empty-vessel-driven "deep-learning", "artificial-intelligence", and "algorithmic" narratives-du-jour, more and more fund managers are jumping on the bandwagon. The latest is Finnish fund manager FIM, who is introducing the first investment fund in the Nordic region, where a self-learning algorithm gets to pick all the stocks.

As Bloomberg reports, targeting returns of 3 percentage points above the MSCI World Index, the FIM Artificial Intelligence fund seeks to tease out patterns even an experienced fund manager may not detect, according to Chief Investment Officer Eelis Hein, who oversees 5.6 billion euros ($6.6 billion) in investments at FIM Asset Management.

“This is the next revolution across society, including in investing,” Hein said in an interview in Helsinki.

 

“Investors are hugely interested.”

 

The “Warren in a box” technology, referring to famous value investor Warren Buffett, is a product of more than two years of work by Acatis Investment GmbH and NNaisense SA, a Lugano, Switzerland-based developer of artificial intelligence.

That all sounds very exciting and "new" and "tech" and awesome. There"s just one thing...

Johnny-5 sucks at stock-picking...

Remember what that AI Fund CEO said... “EquBot AI Technology with Watson has the ability to mimic an army of equity research analysts working around the clock, 365 days a year, while removing human error and bias from the process.”

But hey FIM is not giving up, they drop some more complex words to "splain away any potential doubts an investor may have...

“AI may detect non-linear patterns that traditional quantitative analysis is not able to identify,” Hein at FIM said.

 

“It has no emotions: it hasn’t felt fear during a crash nor euphoria when markets are up.”

Elon Musk Isn't Alone: Vladimir Putin Asks "How Long Before The Robots Eat Us"

Elon Musk isn’t the only one whose afraid that advances in artificial intelligence will leads to something akin to the creation of Skynet.

The Daily Mail is reporting that Russian President Vladimir Putin has expressed reservations about artificial intelligence, even asking the head of Russia"s largest tech firm "how long do we have before the robots eat us"?

The Russian president was speaking to Arkady Volozh, chief of internet firm Yandex, during a tour of the company"s Moscow headquarters, the Daily Mail reports. Volozh was discussing the “potential” of AI when he discovered that Putin has a dramatically different interpretation of what that might be.

According to state-funded Russian broadcaster RT, the question baffled Volozh.  

“I hope never”, he replied after taking a pause to gather his thoughts. “It’s not the first machine to be better than humans at something. An excavator digs better than we do with a shovel. But we don’t get eaten by excavators. A car moves faster than we do…”

But Putin seemed unconvinced. “They don’t think,” he remarked.

Volozh acknowledged that it was true and scrambled back to his speech on AI’s merits.

Putin hasn’t always harbored such a pessimistic view of AI. When asked earlier this month by a group of kids about who would rule the world in the future, Putin said it would be whatever country manages to perfect artificial intelligence.

As RT points out, tech firms like Google and Facebook are developing new AI technology as an increasing number of online services rely on algorithms, including search engines, automated translation between languages, image enhancement and targeted advertising, an area that recently got Facebook into hot water when its self-reporting ad algos created a targeting category using the keywords "jew hater."

Musk has repeatedly warned that AI could cause World War III. Unless the technology is properly regulated, he said, it represents a much bigger threat to the security of the US than North Korea.

Of course, Musk has been criticized for his paranoid views by such tech luminaries as Facebook CEO Mark Zuckerberg, who said he was “optimistic” about AI’s potential.

Whatever happens with AI, hopefully it doesn’t come to this.

 

Former Citi CEO Vikram Pandit: "AI Could Kill 30% Of Back-Office Banking Jobs By 2023"

Just as the development of electronic trading led to mass downsizing on sales desks across Wall Street, advances in artificial intelligence could decimate the ranks of banks’ back-office staff, according to former Citigroup CEO Vikram Pandit. And given the rapid pace of technological advance, jobs in operations and retail banking could begin disappearing in as few as five years.

Pandit, who shared his thoughts about the future of the banking industry during an interview with Bloomberg, said that the industry’s focus on technology as a cost-saving measure - Bank of America Corp.’s Chief Operating Officer Tom Montag said in June that the bank is searching for more ways for technology to replace people – has inspired him to move up his timeline aggressively.  

As Bloomberg points out, Pandit’s forecast for job losses is in step with one made by Citigroup last year. In a March 2016 report, the lender estimated a 30% reduction between 2015 and 2025, as banks find more applications for automation in their retail businesses. That could lead to job losses numbering 770,000 in the US, and as much as 1 million in Europe, Citigroup said.

“Everything that happens with artificial intelligence, robotics and natural language - all of that is going to make processes easier,” said Pandit, who was Citigroup’s chief executive officer from 2007 to 2012. “It’s going to change the back office.”

This pressure on employees to prove that they’re more productive than the technology has transformed banking into an “enormously competitive” industry, Pandit said, adding that he expects the shift to produce yet another wave of consolidation in an industry that’s already dangerously concentrated, a flaw that was both exposed and exacerbated by the financial crisis.

Though he also believes advances in technology will lead to the development of “specialist providers,” making the financial system “a bit more decentralized.”

Pandit achieved lasting notoriety after becoming CEO of Citigroup in December 2007 just as the cascading subprime mortgage crisis was driving the US economy into a recession. He had previously led a hedge fund that was acquired by the bank, and, upon taking the top job, was widely criticized in the press for his inexperience in managing many of Citigroup’s core businesses like, for example, banking.

He’s now the CEO of Orogen Group, an investment firm that he co-founded last year, five years after being forced out as Citi’s CEO.

While Pandit’s prediction should be concerning to anyone who works in the financial industry, humanity as a whole would have much more to worry about if another CEO’s dire predictions about AI are eventually realized.
In one of several memorable tweetstorms on the topic, Tesla CEO Elon Musk urged governments to start considering regulation to govern the development and application of AI technology, arguing that the machines pose a greater danger to the US than North Korea.

If you"re not concerned about AI safety, you should be. Vastly more risk than North Korea. pic.twitter.com/2z0tiid0lc

— Elon Musk (@elonmusk) August 12, 2017

However, other banking CEOs, including JP Morgan Chase & Co.’s Jamie Dimon, have played down the potential impact of technology in the financial industry, as Bloomberg reminds us. Conversely, automation could create “more opportunities” for employment as the firm hires a bevy of “technology workers.”

“JPMorgan Chase & Co. CEO Jamie Dimon cautioned in June against overreacting to the impact of technology on jobs. While the bank is using technology to reduce costs, that helps create other opportunities, Dimon said in an interview published on LinkedIn. He predicted that employee numbers at his firm will continue to rise -- as it hires more technology workers.”

…Of course, Dimon has every reason to expect this: After all, that’s exactly what happened when the adoption of automation by manufacturers began to accelerate. Right?
 

How Can America Afford A Universal Basic Income? Simple: "Tax The Robots"

By replacing low-wage cashiers and other retail workers with robots, the retail sector’s struggling companies can engineer a potentially life-saving boost in profits. But as advances in artificial intelligence continue to accelerate, according to the World Economic Forum, large swaths of laborers are going to lose their jobs, leading to unprecedented levels of unemployment.

How to distribute the profits that will accrue to corporations thanks to this paradigmatic shift in labor-market conditions has been the subject of intense debate, as it has the capacity to create a sharp drop in living standards across developed economies.

So how can governments ameliorate this diminution of the American workforce? The WEF has an idea: Tax the robots and use the proceeds to fund a universal basic income for all Americans. As the paper notes, the once-controversial UBI has never been more poplar, thanks to tech luminaries like Mark Zuckerberg, Elon Musk and Bill Gates – all of whom have spoken in glowing tones about the policy’s potential to save America from dystopia. Yet, for all this talk, Zuckerberg & Co. have glossed over a crucial question: How, exactly, will taxpayers afford this?

The WEF says it looked to the private sector for answers, and came up with this simple conclusion: Tax the robots.

“Companies will profit significantly from workforce automation,” WEF writes. “So the private sector will be able to afford shouldering this burden, while at the same time still making greater profits.”

The WEF cites a small, yet successful, experiment that was conducted in the UK, and Ontario, as justification for its plan, which it fleshes out in greater detail below:

“As the robots take over, people will begin to lose their jobs, but companies will be fine. More likely than that - they’ll thrive. The profits generated from automation could be used to pay a basic wage to those displaced by robots. To use the welder example from before, a company could slash the cost of their production by at least a third in a short period of time, and would continue to see greater profits as efficiencies increase and the price for parts drops. If that company eventually arrives at the $2 an hour mark that BCG predicts, the company’s bottom line would have been improved by 1250%.

Given all of the savings and massive profits companies are going to reap from these new technologies, they should be responsible for using part of this monetary kick-back to help the workers they’ve displaced. Legislators might consider a sliding-scale automation tax, where a company qualifying itself as using an automated workforce would be taxed depending on how many human workers they have performing tasks compared to how many tasks are performed by automated workers that a human could rightly do. This money could then be put into a UBI fund that is then distributed by the government to citizens affected by automation—or to the entire population.”

While startup costs associated with building a robotic workforce might appear daunting, the WEF notes that they’ve fallen sharply in recent years, and will likely continue to decline as advances in AI technology sharpen robots’ ability to work side-by side with humans.

Some of the largest some of the largest food-service and retail companies have announced initiatives centered around providing customers with a more seamless shopping experience. Cowen"s Andrew Charles, the analyst calculates the jump in sales at McDonald’s as a result of the company"s new Experience of the Future strategy which anticipates that digital ordering kiosks (shown above) will replace cashiers in at least 2,500 restaurants by the end of 2017 and another 3,000 over 2018.

This trend will only continue to accelerate. McDonald’s, an early pioneer of automation, is already replacing human workers with automated kiosks. They expect a 5% to 9% return on investment in just the first year; in 2019 they expect this return to balloon to double digits. And this is only one sector: PricewaterhouseCoopers estimates that 38% of US jobs will be in danger of being replaced by automation by 2030.

To this, WEF adds that Micky D’s expects a 5% to 9% return on investment in just the first year; in 2019 they expect this return to balloon to double digits.

Amazon.com’s nearly $14 billion acquisition of Whole Foods Market has spurred (long overdue) calls from a handful of Congressional Democrats for an investigation into Amazon’s business practices on anti-trust grounds. Over the past few years, the company’s push for speedier delivery times (it offers same day delivery in certain markets through its Amazon Prime service) and an increasingly expansive away of products is devastating smaller retails and brands.

Some smaller retailers, having ascertained the existential threat Bezo’s blatantly monopolistic business practices pose, have started to push back, setting the stage for a full-scale battle between Amazon and its smaller rivals. In an email sent to authorized retailers, the CEO of Birkenstock USA threatened to cut off any retailers who violate the company’s strict policies surrounding reselling by turning over their stock to Amazon. The e-commerce giant has allegedly been reaching out to individual Birkenstock retailers, offering to buy out their entire stock at full price. Amazon has denied these claims. Already, retail bankruptcies have surged 110% in the first half of this year, according to a report by Fitch as retail surpasses battered energy as the most distressed industry in the US.

Unfortunately, US officials aren’t treating the problem of creeping automation with the deference that the WEF says it deserves. Case in point:

“At the exponential rate of robotization, there isn’t a lot of time for legislators to figure out the intricacies of a solution - but they don’t seem to be in too much of a rush. Steven Mnuchin, the US’s treasury secretary, is already completely ignoring this issue, for example.”

Fed Chairwoman Janet Yellen acknowledged the severity of the problem during her Congressional testimony following questions from two Republican senators. To be sure, the Fed doesn’t have the authority to raise taxes (though it could easily choose to monetize these handouts by agreeing to buy more government bonds). Stagnant wages, worsening labor-force participation and expanding deflationary prices have been linked by economists to increasing automation. In a recent study, PricewaterhouseCoopers estimates that 38% of US jobs will be in danger of being replaced by automation by 2030.
 

HOW GOOGLE FRAMES OUT, PAYS FOR, AND GETS GOV'T TO BE ITS BITCH

Intro - Beware the Holding Funnel

Originally on marketslant.com

What can one say. This is how business is done. And what is scarier it is now being done by firms with all your data. So, the next time you use your club card for a discount at the market, ask yourself : "Does Shop-Rite really want to make less money?" With shopping habits and data, real time pricing will come, and once they know your buying habits, look out.

Prices of things you buy most can change as you enter the store. If you doubt that, search for an Uber  car, then re-search it. We"ve  found  that the price can vary widely over minutes. From $80 to $140 LGA to Greenwich CT. The explanation given  us is "traffic and car availability" . That is Uber  changing price based  on car demand which effects car supply. 

Watch, Google will be part of the move to real time price changes in those fancy new cashierless markets with phone apps that help you  find what you want. "Those crackers you like so much are right at the end of that funnel shaped aisle. You can"t miss it them - Soren  K. Group

New Evidence Reveals an Extreme Level of Corruption

Written by Josie Wales for theantimedia.org

 In September of 2011, Google’s Executive Chairman Eric Schmidt testified before Congress that Google was not manipulating search results to favor its own shopping service (it was). Schmidt also denied allegations that the company was a monopoly, citing a research paper written by David Balto, former policy director of the Federal Trade Commission. What Schmidt neglected to tell the Senate Judiciary antitrust committee was that Google had funded that research paper.

And that’s not the only one, according to a recently published report by the non-profit, non-partisan watchdog organization, the Google Transparency Project, which identified “329 research papers published between 2005 and 2017 on public policy matters of interest to Google that were in some way funded by the company.”

What’s more, the academic research funded by Google covered “a wide range of policy and legal issues of critical importance to Google’s bottom line, including antitrust, privacy, net neutrality, search neutrality, patents and copyright.”

GTP’s report reveals a shocking list of sources that Google paid off. They include:

“[A]cademics, think-tanks, law firms, and economic consultants from some of the leading law schools and universities in the country, including Stanford, Harvard, MIT, University of California Berkeley, UCLA, Rutgers, Georgetown, Northwestern Law School, and Columbia.”

Internationally, GTP reports, “Google-funded studies were written by academics at some of the most prestigious universities in Europe, including Oxford (U.K.), Edinburgh University (U.K.), Berlin School of Economics (Germany), Heinrich Heine University (Germany), and KU Leuven (Belgium).”

The Wall Street Journal took their research a bit further, and what they discovered is astounding. WSJ reported:

“Some researchers share their papers before publication and let Google give suggestions, according to thousands of pages of emails obtained by the Journal in public-records requests of more than a dozen university professors. The professors don’t always reveal Google’s backing in their research, and few disclosed the financial ties in subsequent articles on the same or similar topics, the Journal found.”

University of Illinois law professor Paul Heald neglected to disclose the $18,830 he received from Google to fund “an idea on copyrights he thought would be useful to Google.” When he was questioned in an interview about his failure to mention his sponsor, Heald replied, “Oh, wow. No, I didn’t. That’s really bad. That’s purely oversight.” The professor also claims the money had no influence on his work.

Google has paid anywhere between $5,000 and $40,000 per paper, and the number of studies surged the highest in 2012 when the company was being investigated by the Federal Trade Commission and European regulators for antitrust violations. At least 50 studies on antitrust issues authored between 2011 and 2013 were bought and paid for by Google.

[EDIT- Some Examples from the site - Soren K]

?

for complete list or click HERE

According to a former employee and a former Google lobbyist, Google officials in Washington compiled wish lists of academic papers and then searched for willing authors to complete the desired work. Google often provided working titles, abstracts, and budgets for each proposed paper. Upon completion, they were pitched to government officials. The former lobbyist told the Journal that Google would “sometimes pay travel expenses for professors to meet with congressional aides and administration officials.”

Google’s massive influence on academic research should come as no surprise given the former CEO’s openness in discussing the company’s hand in writing legislation. At the Washington Ideas Forum, Schmidt described his experience working with the U.S. government, revealing that “The average American doesn’t realize how much of the laws are written by lobbyists…and it’s shocking, now, having spent a fair amount of time in the system –  how the system actually works.”

Shocking is an understatement. It’s absolutely terrifying how the system works. A multi-billion dollar company with a monopoly on the internet not only writes the laws, but funds academic studies to shield them from further laws that might prevent them from becoming even more dangerous, all while harvesting private data from over a billion people and developing AI technology that allows two neural networks to communicate using inhuman cryptographic language indecipherable to humans.

And the executive chairman of this disturbingly powerful corporation is a man who has stated that Google’s famous “Don’t be evil” slogan was “the stupidest rule ever.” This is the same man who told an audience in Washington, D.C., that “We don’t need you to type. We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”

What could go wrong?

theantimedia.org

Read more by Soren K.Group

With New Patent, Amazon Will Collect As Much Customer Data As Google

A day after Amazon announced it would jump head-long into the bricks-and-mortar grocery business by agreeing to buy Whole Foods Market for $13.4 billion, reports from earlier this week about a new patent issued to the company are starting to make more sense. The patent, which was first reported by the Verge, is for wireless technology that can effectively block customers in Whole Food’s retail locations from “showrooming." "Showrooming" is the practice of using retail locations to test out products before buying them online - a practice that Amazon, by making it easy to comparison shop on a smartphone, helped pioneer.

In its report, the Verge focuses on how the technology will help the company solve a problem that Amazon itself helped create – a problem that has plagued virtually every other traditional retailer.

"Systems and methods for controlling online shopping within a physical store or retailer location are provided. A wireless network connection may be provided to a consumer device at a retailer location on behalf of a retailer, and content requested by the consumer device via the wireless network connection may be identified. Based upon an evaluation of the identified content, a determination may be made that the consumer device is attempting to access information associated with a competitor of the retailer or an item offered for sale by the retailer. At least one control action may then be directed based upon the determination.”

But the technology described in the patent also raises serious concerns about the company’s plans for vastly expanding its capacity to collect and store customers" data. As MarketWatch’s Theresa Poletti reports, with this added capability, Amazon may soon be gathering as much data on its consumers now as Alphabet’s Google Inc.

Stephen DiFranco, an executive-in-residence at the Plug and Play Tech Center in Sunnyvale, Calif., offered a few disturbing hints about the scope of Amazon’s data-collection capabilities in an interview with MarketWatch.

“[The technology] will also triangulate your position in the store, market to you while you are in the store, and understand your behavior in the store,” said DiFranco, who previously worked at Broadcom’s Internet of Things business and led the sale to Cypress Semiconductor CY, -1.72% “If they can collect the same kind of info that they can get while I am surfing on their site, they are going to be able to deliver the same value, the same experience that I get on their site...The company that knows more about the online behavior of me, will now own this same science...while I am in the Whole Foods retail environment.”

 

The positive aspect, he said, is that it will result in better, more convenient shopping experiences for consumers, with their preferences and habits known. It has the ability to turn into a real assistant for shopping. “You passed the milk, you always get milk,” your smartphone may tell you while shopping.

 

DiFranco said that by combining the data Amazon already has about its current customers, plus far more frequent data that comes from grocery shopping, will turn it into an even bigger giant with vastly more data. “This is jet fuel in retail analytics that no one else will have.”

But while some customers might balk at the prospect of shopping in a store where literally every single action and preference is being recorded, investors don"t seem to mind.

Whole Foods’ Market’s largest competitors lost a combined $32 billion in market capitalization yesterday after the announcement. Sell-side analysts have long been calling for a stronger management team to step in and take control of Whole Foods after years of chronically weak earnings and sluggish stock performance. Amazon’s stock also climbed 2.4% on the news, helping it slough off broader weakness in the FAAMG contingent.

Amazon, which already operates a grocery-delivery service in select markets, announced its plans for entering the bricks-and-mortar grocery business late last year when it opened its first small-format grocery store. At the time, the company said it could envision expanding to 2,000 stores. One of the store"s most widely publicized features was its use of automation and AI technology to eliminate check-out lines and allow customers to freely walk out with their purchases. But following the latest revelation about Amazon’s big-data tactics, investors should hope the ecommerce giant also plans to address the more prosaic flaws plaguing Whole Food’s business: Namely, that, as stagnant wages and rising rents force consumers to cut back on spending, the “Whole Paycheck” image will likely continue to alienate shoppers.