Showing posts with label Transparency. Show all posts
Showing posts with label Transparency. Show all posts

Sunday, December 24, 2017

Will Ethereum Be The Next Facebook?

Authored by Kenneth Tan via Hackernoon.com,


2017 has been an amazing year for Ethereum.


Prices has hit an all time high of $800, and it is now the processing nearly double the number of transactions of bitcoin at a million a day.


As we enter 2018, I think Ethereum will be the next Facebook due to the massive amount of use cases that i am finding in major industries that benefit greatly from decentralization & transparency.


Ethereum is basically the app store for blockchain.


It allows creators to build and run apps without having to worry about the underlying “operating” system just like Apple.


Here are some of the areas to look out for:


Fundraising and ICOs


ICOs are the largest real world use case for ethereum. Traditionally, to fund your idea, you would have to borrow money from a bank, give up a lot of equity to a VC, or get an expensive loan from people lending sites. Basically, ICOs is a kickstarter on steroids.


As the founder of fundyourselfnow.com, I have worked with entrepreneurs all over the world on their product to get it ready for their ICOs. Many come from developing nations such as Indonesia (EagleCoin) and India (WandX) where it would have been extremely hard to raise significant funding for their idea due to lack of local investors.


ICOs are democratizing funding and spawning the next wave of innovation from young hungry entrepreneurs all over the world who will eventually contribute back to their local communities for a better future.


Payments & Lending


Currently, the crypto-currencies are quite hard to spend. Crypto credit card companies such as TenX, Monaco, Tokencard are stepping in to fill in the gap. All of them are built on the ethereum network. I personally hold a TenX Card and have used it to spend on daily goods and services using bitcoin.


Monaco in particular, has gotten official approval from VISA to issue cards to Singapore residents. Expect to see a huge increase in actual cryptocurrency spending & adoption 2018 as many of these crypto-card companies get official approval from VISA or MasterCard.


There has also been a rise of ethereum based lending solutions, such as SALT lending and ETHLend. The interest rates are expected to be fairer than getting from a bank, and people globally can gain access to financing even without a bank account.


I expect that 2018 will be the year where we will help lot of the unbanked get included in this new digital world.


Gambling


The gambling industry is ripe for disruption. 2017 started off with a very simple dice game, etheroll. You send ether to a smart contract and winnings are sent to you in a matter of minutes. Etheroll has over 260,000 ethers wagered so far (Around 2000m USD), which is incredible considering how simple and basic the game is.


Keep an eye out on Edgeless and Funfair in 2018 as one of them could potentially grow to become the largest online global casino. They have significant advantages over traditional real world casinos:


  1. There is no capital controls

  2. Anonymous, money doesn’t flow through the banking system

  3. Trustless smart contract to process payouts and ensure fairness of game.

Gaming


The virtual nature of gaming lends itself incredibly well for the blockchain. Many successful gaming companies have started to include tokens in their games/product to fund their gaming ecosystem.


Here are some of the interesting ways tokens are used (not exhaustive):


Decentraland?—?Buy Land in their virtual world. Virtual worlds has been around since 2003 with Second Life and Ethereum might be the fuel that makes it finally takes off


Engin Coin?—?Used to create virtual goods that people that can on their marketplace. Instead of using “gold” in most games, expect games in 2018 to require you to use their own Ethereum game token to make & trade items.


CryptoKitties?—?Tokens represents a digital cat in the blockchain. Over 17m worth of cats were transacted since they launched early Dec , with the most expensive cat sold for more than 100k USD.


What more interesting is that with the use of Ethereum tokens for games, this could potentially mean that you could eventually trade items across games. For example, you can trade an Enjin Coin Item for land in decentraland through decentralized exchanges using the ENJ/MANA trade pair. Virtual worlds economies which are currently “silo-ed” could potentially change with the ability to “trade” across worlds.


Final Words


I see the money flowing into Ethereum and the overall cryptocurrency market as a positive. The technology underpinning Ethereum has a lot of real world usage that has yet to be unlocked and money is being funneled into innovative ethereum projects via ICOs at an incredible rate.


Mark Zuckerburg started facebook at the young age of 20 about 13 years ago, and it has completed changed the way we interact with our friends and family.


Vitalik, founder of Ethereum, started Ethereum also at the young age of 20 too about 3 years ago. I strongly believe that within the next 10 years, Ethereum will radically change the we interact with our world.









Sunday, November 26, 2017

Pentagon To Admit To 2,000 Troops In Syria; Number Likely Far Higher

Authored by Jason Ditz via AntiWar.com,


General Had Previously Said US Had 4,000 Troops There...



US officials said on Friday that the Pentagon is expected to concern confirm that there are “about 2,000” US ground troops in Syria, a major increase from the roughly 500 that they officially claim is the case.


An accounting system, known as the Force Management Level (FML), was introduced in Iraq and Syria under the Obama administration as a way to exert control over the military.


 


But the numbers do not reflect the extent of the US commitment on the ground, since commanders often find ways to work around the limits, sometimes bringing in forces temporarily or hiring more contractors.


 


Current FML figures are officially 5,262 in Iraq and 503 in Syria, but officials have privately acknowledged that the real number for each country is more.




The US has overtly lied about troop levels in Syria consistently throughout their deployment.


Less than a month ago, Gen. James Jarrard told reporters the US had about 4,000 troops in the country...


 


though the Pentagon at the time claimed he was wrong and the real number was only 503.


 


Adding to the confusion, the Defense Department had also offered figures to Congress on overseas deployments, and those figures said 1,723 troops were in Syria at the time.



Despite this, the official troop figure has not changed.


President Trump has made a point of troop levels needing to be kept secret from “the enemy,” but consistent lies from the Pentagon about their deployments have made the figures less a closely guarded secret than a mockery of transparency.


While 2,000 is almost certainly closer to the truth than 500, it’s not necessarily the actual figure.









Wednesday, November 22, 2017

Bahamas Prime Minister Blames US Cable News For Collapse Of Journalism

Over the weekend, Bahamas Prime Minister Dr Hubert Minnis addressed the Third Annual Press Club Awards Banquet, where he blamed the collapse of journalism standards on 24-hour cable news shows in the United States. He said, the declining of standards “would not have been allowed in previous times” and urged local journalist not to be  “champions of any political party, business, group or interest in a country”.



While addressing the Third Annual Press Club Awards Banquet Munnis said,




This is not a practice that would be allowed by journalists in other countries. I am not speaking here of editorial writing. A journalist and a columnist are distinctly different roles.


 


The 24-hour cable news shows in the United States have in a number of ways led to a lessening of standards that would not have been allowed in previous times. There has been a considerable blurring of reporting and commentary.


 


It is telling when certain standards have been breached, that some in the press do not even realize that a standard has been breached.


 


Journalists are not supposed to be champions of any political party, business, group or interest in a country.




Minnis noted that journalist must report news on a fair and balance perspective while avoiding conflict of interests, adding “the best journalism criticises, celebrates and inspires”. In the United States, that is certainly not the case with 24-hour cable news networks waging an informational war against the American people flooding them in a DDOS style attack of misinformation. The constant bombardment of Russia/Trump collusion stories have sent the trust in television news to record lows.



The Jamaican Observer ends the report by saying,




Minnis said, adding that the press has an essential role in promoting good governance, transparency and accountability.


 


“By pressing public officials for accurate and timely information, the press helps citizens to learn about the decisions being made by a government on their behalf,” he told the awards ceremony.  




It seems as Bahamas Prime Minister Dr Hubert Minnis and the American people have something in common and it’s the distrust of the mainstream media. The one question we ask mainstream media execs: Was the fake news in the last election cycle worth the credibility loss?









Tuesday, October 24, 2017

Twitter To Crack Down On Revenge Porn Ahead Of Senate Intel Committee Hearing

Via StockBoardAsset.com,



Last week, Twitter Safety released ‘a calendar of our safety work’ in approach to make the social media platform a much safer place. Twitter’s blog indicates “far too often in the past we’ve said we’d do better and promised transparency but have fallen short in our efforts”. The timeline will include regular and real-time updates about safety changes and overall progress of the social media channel to provide transparency. The blog also indicates “this is the first time we’ve shared this level of visibility into our work”.


According to Ars Technica, Twitter’s transformation will begin this Thursday–




On October 27, Twitter will expand what types of “non-consensual nudity” (aka “revenge porn”) that it takes action against. The company will already act when a victim complains, but Twitter will soon act even in cases where the victims may not be aware images were taken, instances like upskirt photos and hidden webcams. “Anyone we identify as the original poster of non-consensual nudity will be suspended immediately,” 





What is Revenge Porn?


The term ‘revenge porn,’ though frequently used, is somewhat misleading. Many perpetrators are not motivated by revenge or by any personal feelings toward the victim. A more accurate term is nonconsensual pornography (NCP), defined as the distribution of sexually graphic images of individuals without their consent.


As of June 08, 2017, C.A. GOLDBERG, PLLC, who focuses in the areas of revenge porn, domestic violence, sexual assault, & public figure crises says about 38 US states have adopted ‘revenge porn laws’. Interesting enough, Alabama, Kentucky, Indiana, Ohio, Massachusetts, Missouri, Montana, Nebraska, New York, and South Caroline do not have ‘revenge porn laws’.



Here are various states and the penalties for revenge porn…



Revenge porn search term in the United States has been an explosive trend over the past 5-6 years. States such as Maine, West Virginia, and Kentucky have the highest interest by region.



Unfortunately, millions of Americans idolize Hollywood, who have been actively promoting revenge porn for the world to see. The latest story is Rob Kardashian posting nude pictures of Blac Chyna…



Back to the Twitter’s blog post, where the social media platform has outlined 4-months of proposed transparency in attempt to make the platform a much safer place. After Thursday, on November 03, Twitter will suspend organizations and groups who have a history for advocating violence . This will include banning hate imagery in profile headers and avatars, along with banning “hateful display names”.



Most social media channels are in damage control ahead of the Senate Intelligence Committee to testify in a public hearing November 01 about Russian interference in the 2016 election. Twitter has felt the need to become more ‘transparent’ and tackle revenge porn ahead of the meeting.


Here are questions we ask: 



  1. Why does Twitter suddenly care about revenge porn?




  2. Is it because of the Senate Intelligence Committee meeting?



*****


Are insiders attempting to transform Twitter <TWTR>  post -81% stock crash?










Monday, October 2, 2017

Google Reports Record Level Of Government Data Requests

Google has just released its biannual transparency report disclosing the number of requests governments send for users" private data.


As Statista"s Niall McCarthy details, in the first six months of this yearthe search engine giant received 48,941 requests for data while 83,345 accounts were specified in those requests.


Infographic: Google Reports Record Level Of Government Data Requests | Statista


You will find more statistics at Statista


That has broken the record for the most Google user data requests in a six month period.


The company complied with 65 percent of the requests, meaning over 54,000 accounts were impacted.

Friday, September 29, 2017

Vietnam Shows How To Clean Up The Banking System: Ex-Banker Sentenced To Death For Fraud

The lack of prosecution of US bankers responsible for the great financial crisis has been a much debated topic over the years, leading to the coinage of such terms as "Too Big To Prosecute", the termination of at least one corrupt DOJ official, the revelation that Eric Holder is the most useless Attorney General in history, and of course billions in cash kickbacks between Wall Street and D.C. And, naturally, the lack of incentives that punish cheating and fraud, is one of the main reasons why such fraud will not only continue but get bigger until once again, the entire system crashes under the weight of accumulated theft, corruption and Fed-driven malinvestment. But what can be done? In this case, Vietnam may have just shown the way - sentence embezzling bankers to death. Because if one wants to promptly stop an end to all financial crime, few things motivate as efficiently as a firing squad.


According to the BBC, the former head of a major Vietnamese bank has been sentenced to death for his role in a fraud case involving some 800 billion dong (which sounds like a lot of dong, but equals roughly $35 million) of illegal loans. Nguyen Xuan Son, who served as general director of OceanBank, was convicted of embezzlement, abuse of power and economic mismanagement. Bank founder, tycoon Ha Van Tham, and dozens of other banking officials are also on trial, accused of lending violations.



Nguyen Xuan Son was sentenced to death at the People"s Court in Hanoi


Meanwhile, dozens of former employees also received lengthy prison sentences in the major corruption trial. Because OceanBank is partially-state owned, Son"s crime of mishandling state money was thought to be particularly serious. After leaving the bank, he rose to be head of state oil giant PetroVietnam. As Reuters reported previously, PetroVietnam and Vietnam’s banking sector are at the heart of a sweeping corruption crackdown in the communist state.





The four officials are accused of intentional breaches of state rules over a loss-making investment in Ocean Group’s banking unit, police said in an online statement.



Investigations into PetroVietnam made global headlines last month when Germany accused Vietnam of kidnapping Trinh Xuan Thanh, a former official of a PetroVietnam unit, from a park in Berlin and forcing him home to face charges of financial mismanagement.



A Politburo member who was a former PetroVietnam chairman and a vice trade minister have also been sacked from their positions as part of the crackdown -- unusual moves in a country where such senior officials are rarely dismissed.



To be sure, Vietnam is one of the world"s biggest executioners, according to Amnesty International, but this is said to be the first time in years that the death penalty has been given to such a high-flying former official. Back in 2013, another former banker, Vu Quoc Hao, the former general director of Agribank Financial Leasing Co, was also sentenced to death by lethal injection for embezzling $25 million (or what Goldman would call "weekend lunch money") a case which however was relatively low profile and received little international attention. 


Earlier in the day, OceanBank"s ex-chairman Ha Van Tham, once one of the richest people in Vietnam, was jailed for life on the same charges, and for violating lending rules. Judge Truong Viet Toan said: "Tham and Son"s behaviour is very serious, infringing on the management of state assets and causing public grievances, which requires strict punishment."



The bank"s ex-chairman Ha Van Tham was jailed for life


More details from BBC:





In total, 51 officials and bankers stood trial, accused of mismanagement leading to losses of $69m (£50m).



The case comes amid a massive anti-corruption crackdown in Vietnam, which is ranked as one of the most corrupt countries in Asia. It is ranked 113th out of 176 countries on Transparency International"s corruption perceptions index.



The government has vowed to tackle the issue in order to boost the country"s economic growth. In May, a top Vietnamese official was sacked for "serious violations" while running PetroVietnam.



And yet,  while one could be left with the impression that this is a case of justice finally being done, even today"s sentences appears to have an element of corruption to them: according to BBC, the blitz, while tackling corruption, has mainly targeted opponents of Communist Party chief Nguyen Phu Trong.


Still, no matter the circumstances, an outcome such as this in the US remains impossible: after all it is America"s very own embezzling bankers that control the legislative and judicial branches, and most recently, the executive not to mention the central bank, which is why deterrence of any substantial scale will never take place in the US and small, medium and large-scale theft will continue unabated, with the occasional slaps on the wrist, until there is nothing left to steal.

"What"re They For, Exactly?" $100 Million Bridge-And-Tunnel Towers Baffle New Yorkers

After a summer plagued by hours-long delays and service outages, New Yorkers’ frustration with the city’s rapidly deteriorating subway system has reached a boiling point. But while the MTA is desperately trying to close massive budget shortfalls by hiking fares in lieu  of any kind of meaningful assistance from the State of New York, commuters have noticed that a series of mysterious metal towers have started appearing at the entrances of tunnels and bridges around the city.


And some are expressing frustration with Gov. Andrew Cuomo and the MTA for refusing to release any details about the towers" purpose, despite planning to spend $100 million on them.


One New Yorker, Jose Lugo, told CBS that the quickly appeared after the Brooklyn Battery Tunnel toll booths came down.



Earlier this month, Reinvent Albany asked the Authorities Budget Office to investigate whether the "MTA board was fully informed, before approving contracts" related to the construction of the towers. The group is trying to figure out if the MTA board knew what it was doing when it approved a series of contract amendments worth some $47 million worth of expenses for the towers that currently sit at the entrance to the Battery and Queens Midtown Tunnels.


Eventually, the MTA plans to construct 18 such towers, saying only that they will serve some vague anti-terrorism-related purpose.


“It’s a bit mind-boggling that the MTA is approving $100 million for what appears to us to be big, decorative pylons,” says John Kaehny, the leader of the watchdog group Reinvent Albany. “What we’re asking for is transparency from the MTA.”


 


“What we"re asking for is transparency from the MTA.”  



But the individuals in charge are staying tight-lipped about what the towers actually do.


Cedrick Fulton, the head of the MTA"s bridges and tunnels, refused to comment to media organizations asking about the towers, and MTA chaiman and former mayoral candidate Joe Lhota said he wasn"t at liberty to discuss details of the project, other than to confirm that they would serve some type of anti-terrorism-related purpose.


Shams Tarek, a spokesman for the MTA, told Politico that the towers "host cameras, traffic monitoring and other equipment related to homeland security that would otherwise have been hosted by the former toll booth structures".


If this is accurate, then $100 million seems like a hefty price tag for such a project.


Citizens aren’t the only ones asking questions about the towers. According to CBS, some MTA board members, including New York City Transportation Commissioner Polly Trottenberg, say they know too little about the towers – especially considering that the MTA has already spent $50 million on them.


“It’s a $100 million MTA project shrouded in secrecy, with 18 of them for tunnels and bridges. So, what are they exactly?” Trottenberg said.



Let’s hope – for the MTA’s sake – that these pylons do have some kind of sophisticated functionality, and that this isn’t another classic example of the wasteful spending habits that have contributed to the subway’s present-day troubles.  
 









Thursday, September 21, 2017

Turkish Authorities Top For Twitter Censorship

Twitter has evolved to become an important outlet for political discussion, debate and commentary. The platform was notably put to use to successfully organize anti-government protests on numerous occasions, and as Statista"s Niall McCarthy notes, this put some world leaders on edge, unsurprisingly leading to some countries clamping down on the network"s content.


Twitter"s latest transparency report shows the number of content removal requests made by different countries as well as the share that were granted.


Infographic: Turkish Authorities Top For Twitter Censorship | Statista


You will find more statistics at Statista


In the first six months of 2017, Turkey was the most controlling of Twitter content, making nearly 2,000 removal requests between January 01 and June 30. 11 percent of those requests were granted to some extent.


Turkish authorities detained thousands of people after last July"s failed coup with President Tayyip Erdogan clamping down on what he percieves as illegal online activity for years.


Russia also has a long history of attempting to silence Putin critics and it comes second, making a total of 1,213 removal requests up to June 30th.


In the first six months of the year, 90 percent of all removal requests came from just four countries - Turkey, Russia, France and Germany.

Friday, September 15, 2017

Facebook&#039;s Advertising Algorithms Targeted "Jew Haters"

Facebook is having a rough couple of weeks...


Last week, Democrats and progressives who had once praised the company for promising to eradicate “fake news” on its platform were outraged by revelations that it had sold at least $100,000 in advertising to a Russian troll farm – an allegation that Facebook had initially denied when it first surfaced in the spring. Lawmakers, including Democratic Senator Mark Warner demanded more information from the company, even speculating that Congress may need to pass legislation to “protect Americans” from malicious foreigners dedicated to subverting the American Democratic process by…purchasing targeted ads.



Now, ProPublica is reporting that Facebook"s advertising algorithms inadvertently created a series of targeted-ad categories directed at anti-semites and racists. To test if these ad categories were real, ProPublica paid $30 to target those groups with three “promoted posts” — in which a ProPublica article or post was displayed in their news feeds. Facebook approved all three ads within 15 minutes.





“Last week, acting on a tip, we logged into Facebook’s automated ad system to see if “Jew hater” was really an ad category. We found it, but discovered that the category — with only 2,274 people in it — was too small for Facebook to allow us to buy an ad pegged only to Jew haters.



Facebook’s automated system suggested “Second Amendment” as an additional category that would boost our audience size to 119,000 people, presumably because its system had correlated gun enthusiasts with anti-Semites.


Instead, we chose additional categories that popped up when we typed in “jew h”: “How to burn Jews,” and “History of ‘why jews ruin the world.’” Then we added a category that Facebook suggested when we typed in “Hitler”: a category called “Hitler did nothing wrong.” All were described as “fields of study.”



Now, the company’s advertising business is facing another scandal. According to ProPublica, the world’s largest social network enabled advertisers to direct their pitches to the news feeds of almost 2,300 people who expressed interest in the topics of “Jew hater,” “How to burn jews,” or, “History of ‘why jews ruin the world.’”





The company had continued with the targeted pitches until earlier this week, when ProPublica reporters shared their findings with Facebook’s communications team.  





“Until this week, when we asked Facebook about it, the world’s largest social network enabled advertisers to direct their pitches to the news feeds of almost 2,300 people who expressed interest in the topics of “Jew hater,” “How to burn jews,” or, “History of ‘why jews ruin the world.’”



Unsurprisingly, the company blamed the anti-Semitic ads on one of its algorithms and promised to fix the problem and make sure it never happens again.





“There are times where content is surfaced on our platform that violates our standards,” said Rob Leathern, product management director at Facebook. “In this case, we’ve removed the associated targeting fields in question. We know we have more work to do, so we’re also building new guardrails in our product and review processes to prevent other issues like this from happening in the future.”



Most internet users prefer to conveniently ignore how platforms like Facebook and Google can afford to provide so many free services while still operating profitable businesses.


Of course, they’ve managed to do this by dominating the global market for advertising. Facebook and Google essentially hoover up user data and feed it through to their algorithms, which perform complicated analyses to help develop a users’ demographic profile. The company’s platform then uses this information to target advertisements that might be more relevant to their interests. The purported efficacy of these tactics has allowed Facebook to muscle out traditional purveyors of advertising – like media companies – with whom it is now attempting to formulate an uneasy partnership.



Following the attack in Charlottesville, Va. last month, when a young woman was killed and dozens were injured after an Ohio man who had attended a White Nationalist rally on the campus of the University of Virginia rammed his car onto a crowd of counter-protesters.


Facebook CEO Mark Zuckerberg wrote at the time that “there is no place for hate in our community” and promised to purge such speech from Facebook.





“It’s a disgrace that we still need to say that neo-Nazis and white supremacists are wrong - as if this is somehow not obvious,” he wrote.



But, as ProPublica points out, the company, while it may have deleted a some questionable posts, it didn’t apply any scrutiny to its ad-buying platform. The ad categories that ProPublica spotted were likely generated after scraping data from profiles featuring anti-Semitic themes - either as an interest, an employer or a “field of study.” Facebook’s algorithm automatically transforms people’s declared interests into advertising categories.


ProPublica has been scrutinizing Facebook’s advertising business for years. Last year, it collected a list of 29,000 ad categories from Facebook’s ad system — and found categories ranging from an interest in “Hungarian sausages” to “People in households that have an estimated household income of between $100K and $125K.”


The report didn"t appear to have much of an impact on the company"s share price, which was flat in early trading.


Tech companies’ advertising businesses are generating billions of dollars in revenue, and yet – as the ProPublica investigation demonstrates – there’s little transparency surrounding how the Facebooks, Amazons and Googles of the world repurpose user data for commercial purposes.


Perhaps when he is done cracking just how an (allegedly) Russian $100,000 ad campaign changed the course of US election history. Mark Warner can look into this.

Saturday, September 2, 2017

"Yes, Google Uses Its Power to Quash Ideas It Doesn&#039;t Like - I Know Because It Happened To Me"

Authored by Kashmir Hill via Gizmodo.com,


The story in the New York Times this week was unsettling: The New America Foundation, a major think tank, was getting rid of one of its teams of scholars, the Open Markets group. New America had warned its leader Barry Lynn that he was “imperiling the institution,” the Times reported, after he and his group had repeatedly criticized Google, a major funder of the think tank, for its market dominance.


The criticism of Google had culminated in Lynn posting a statement to the think tank’s website “applauding” the European Commission’s decision to slap the company with a record-breaking $2.7 billion fine for privileging its price-comparison service over others in search results. That post was briefly taken down, then republished. Soon afterward, Anne-Marie Slaughter, the head of New America, told Lynn that his group had to leave the foundation for failing to abide by “institutional norms of transparency and collegiality.”


Google denied any role in Lynn’s firing, and Slaughter tweeted that the “facts are largely right, but quotes are taken way out of context and interpretation is wrong.”


Despite the conflicting story lines, the underlying premise felt familiar to me:





Six years ago, I was pressured to unpublish a critical piece about Google’s monopolistic practices after the company got upset about it. In my case, the post stayed unpublished.




I was working for Forbes at the time, and was new to my job. In addition to writing and reporting, I helped run social media there, so I got pulled into a meeting with Google salespeople about Google’s then-new social network, Plus.


The Google salespeople were encouraging Forbes to add Plus’s “+1" social buttons to articles on the site, alongside the Facebook Like button and the Reddit share button. They said it was important to do because the Plus recommendations would be a factor in search results—a crucial source of traffic to publishers.


This sounded like a news story to me. Google’s dominance in search and news give it tremendous power over publishers. By tying search results to the use of Plus, Google was using that muscle to force people to promote its social network.


I asked the Google people if I understood correctly: If a publisher didn’t put a +1 button on the page, its search results would suffer? The answer was yes.


After the meeting, I approached Google’s public relations team as a reporter, told them I’d been in the meeting, and asked if I understood correctly. The press office confirmed it, though they preferred to say the Plus button “influences the ranking.” They didn’t deny what their sales people told me: If you don’t feature the +1 button, your stories will be harder to find with Google.


With that, I published a story headlined, “Stick Google Plus Buttons On Your Pages, Or Your Search Traffic Suffers,” that included bits of conversation from the meeting.





The Google guys explained how the new recommendation system will be a factor in search. “Universally, or just among Google Plus friends?” I asked. ‘Universal’ was the answer. “So if Forbes doesn’t put +1 buttons on its pages, it will suffer in search rankings?” I asked. Google guy says he wouldn’t phrase it that way, but basically yes.



(An internet marketing group scraped the story after it was published and a version can still be found here.)


Google promptly flipped out. This was in 2011, around the same time that a congressional antitrust committee was looking into whether the company was abusing its powers.


Google never challenged the accuracy of the reporting. Instead, a Google spokesperson told me that I needed to unpublish the story because the meeting had been confidential, and the information discussed there had been subject to a non-disclosure agreement between Google and Forbes. (I had signed no such agreement, hadn’t been told the meeting was confidential, and had identified myself as a journalist.)


It escalated quickly from there. I was told by my higher-ups at Forbes that Google representatives called them saying that the article was problematic and had to come down. The implication was that it might have consequences for Forbes, a troubling possibility given how much traffic came through Google searches and Google News.


I thought it was an important story, but I didn’t want to cause problems for my employer. And if the other participants in the meeting had in fact been covered by an NDA, I could understand why Google would object to the story.


Given that I’d gone to the Google PR team before publishing, and it was already out in the world, I felt it made more sense to keep the story up. Ultimately, though, after continued pressure from my bosses, I took the piece down—a decision I will always regret. Forbes declined comment about this.


But the most disturbing part of the experience was what came next: Somehow, very quickly, search results stopped showing the original story at all. As I recall it—and although it has been six years, this episode was seared into my memory—a cached version remained shortly after the post was unpublished, but it was soon scrubbed from Google search results. That was unusual; websites captured by Google’s crawler did not tend to vanish that quickly. And unpublished stories still tend to show up in search results as a headline. Scraped versions could still be found, but the traces of my original story vanished. It’s possible that Forbes, and not Google, was responsible for scrubbing the cache, but I frankly doubt that anyone at Forbes had the technical know-how to do it, as other articles deleted from the site tend to remain available through Google.


Deliberately manipulating search results to eliminate references to a story that Google doesn’t like would be an extraordinary, almost dystopian abuse of the company’s power over information on the internet.


I don’t have any hard evidence to prove that that’s what Google did in this instance, but it’s part of why this episode has haunted me for years: The story Google didn’t want people to read swiftly became impossible to find through Google.


Google wouldn’t address whether it deliberately deep-sixed search results related to the story. Asked to comment, a Google spokesperson sent a statement saying that Forbes removed the story because it was “not reported responsibly,” an apparent reference to the claim that the meeting was covered by a non-disclosure agreement. Again, I identified myself as a journalist and signed no such agreement before attending.


People who paid close attention to the search industry noticed the piece’s disappearance and wrote about it, wondering why it disappeared. Those pieces, at least, are still findable today.


As for how effective the strategy was, Google’s dominance in other industries didn’t really pan out for Plus. Six years later, the social network is a ghost town and Google has basically given up on it. But back when Google still thought it could compete with Facebook on social, it was willing to play hardball to promote the network.


Google started out as a company dedicated to ensuring the best access to information possible, but as it’s grown into one of the largest and most profitable companies in the world, its priorities have changed. Even as it fights against ordinary people who want their personal histories removed from the web, the company has an incentive to suppress information about itself.


Google said it never urged New America to fire Lynn and his team. But an entity as powerful as Google doesn’t have to issue ultimatums. It can just nudge organizations and get them to act as it wants, given the influence it wields.


Lynn and the rest of the team that left New America Foundation plan to establish a new nonprofit to continue their work. For now, they’ve launched a website called “Citizens Against Monopoly” that tells their story. It says that “Google’s attempts to shut down think tanks, journalists, and public interest advocates researching and writing about the dangers of concentrated private power must end.”


It’s safe to say they won’t be receiving funding from Google.


*  *  *


Update, September 1, 1:55 p.m.: Yesterday, we asked Google’s communications team for a response to this story. Initially, after reviewing contemporaneous internal Google emails about the Forbes story, two PR reps told us there was no way to know whether Google was responsible for deleting the cache and issued a short statement saying only that Forbes took down my story because it was “not reported responsibly.”


This morning, Google’s vice president of global communications, Rob Shilkin, emailed me to say definitively what two of his colleagues wouldn’t: “We had nothing to do with removing the article from the cache.” When I asked Shilkin how he came to that conclusion, he said it was based on old internal Google email threads. Since his colleagues had old email threads about the issue but never denied that Google took down the cache, I asked Shilkin if I could see the threads myself. He declined. His entire email, which he agreed to publish, is below.





Hi Kashmir



I wanted to clear the air on this. We have always enjoyed working respectfully with you and are sad to hear that you’ve carried this since 2011. I’m sorry about how this went down, and wanted to give you the tick-tock from our end.



From our perspective, this was a disagreement over whether a meeting was held under NDA. As you know, you attended a Forbes business meeting with the Google sales team, which was presenting on the (then) new +1 button. It didn’t strike our sales team as unusual that someone from Forbes’ editorial was in the meeting because they’d often attend these types of meetings - Editorial is often involved in a publication’s social strategy.



However, like most of our client meetings that discuss new features, it was held under an NDA (it sounds like Forbes didn’t inform you of this before you attended and had we known you were going to report on the meeting, we would have raised that concern).



Our sales team called their fellow attendees of the meeting from Forbes to express surprise that the article was based on a meeting held under NDA. I understand that one of our PR reps raised this concern to you, and then your editor. I understand that our PR rep asked that the piece come down from Forbes’ website, as it was reporting on a confidential business meeting.



Your editor agreed - he told our PR rep that the article was being removed because it involved reporting on an NDA meeting. As for the Google cache, it’s trivial for a website owner to request its cache to be cleared (see here). I assume this is what happened because we had nothing to do with removing the article from the cache. I hope our team has enough credibility, among those who work with us, that you know that we couldn’t and wouldn’t engage in this type of behavior - never have, never will.



You have long held our and the tech industry’s feet to the fire on privacy issues. And you have written (more than) a few critical stories about Google+ and many other things Google-related :) To my knowledge, never have we had any issues like this, with even the most critical story. On this one piece, there seems to have been an unfortunate misunderstanding over whether all the attendees at a meeting believed they were under an NDA.



I won’t pretend to love how you shared your concern about this incident but - after a stiff drink - I’m glad you raised it. I hope that in the intervening six years, we’ve re-earned your trust. And if not, we’ll keep trying.



Regards


Rob



 

Friday, August 25, 2017

Google To Refund "Fake Traffic" Advertising Revenue

One month ago, consumer products giant Procter & Gamble - one of the largest and most sophisticated advertisers in the world - launched a mini crisis in the online advertising space, when the company announced that it was scaling back its online advertising spend, stating that "digital ad spending was lower versus a high base period and due to current period choices to temporarily restrict spending in digital forums where our ads were not being placed according to our standards and specifications." The implications to this admission that online advertising was either being gamed by bots, or generally underperforming were significant, as it jeopardized the future revenue streams of two of the biggest companies in the world, Alphabet (aka Google) and Facebook, both almost entirely reliant on online advertising. How long before other anchor names decided to similarly cut back on their online ad spending?


So, one month later, in its first tacit admission that its ad network has few protections against "fake traffic" such as ever more sophisticated ad bots - and that P&G"s criticism was spot on - the WSJ reports that Google will issue refunds to advertisers for ads bought through its platform that ran on sites with fake traffic "as the company develops a tool to give buyers more transparency about their purchases."


Hoping to avoid further spending cuts and outright contract losses - especially to arch rival Facebook, which has similarly admitted to having ad exposure problems on numerous occasions - in the past few weeks Google has informed hundreds of marketers and ad agency partners about the issue with invalid traffic, also known “ad fraud.” According to the WSJ, the ads were bought using the company’s DoubleClick Bid Manager.





Typically, advertisers use DoubleClick Bid Manager to target audiences across vast numbers of websites in seconds by connecting to dozens of online ad exchanges, marketplaces that connect buyers and publishers through real-time auctions.



The ad spending flows through to the exchanges. The problems arise when ads run on publisher sites with fraudulent traffic, such as those where clicks are generated by software programs known as “bots” instead of humans. This is an issue of growing to concern to marketers. It is difficult to recoup the money paid to those sites when the issue is discovered too late.



While in the past advertisers have received small credits from Google when they detect discrepancies, in this case, for some buyers, the fraud was larger than usual. However, since Google’s "increased" refund still amounts to only a small fraction of the total ad spending served to invalid traffic, some advertisers remain unsatisfied: "Google has offered to repay its “platform fee,” which ad buyers said typically ranges from about 7% to 10% of the total ad buy."





Scott Spencer, director of product management for Google, acknowledged that refunds have been paid, but he declined to provide a dollar figure for the amount being returned. Some ad buyers said the refund amounts range from “less money than you would spend on a sandwich” to hundreds of thousands of dollars.



“Today, we can’t disclose the information about third parties,” Mr. Spencer said. “So when we aren’t able to catch invalid traffic before it impacts our advertisers and we’re unable to refund their media spend, it hurts us, even if we’re not responsible.”



Google added the affected ad buyers in this instance were impacted by invalid traffic over the course of a few months this year, primarily in the second quarter. Part of that traffic affected video ads, which carry higher ad rates than typical display ads and are therefore an attractive target for fraudsters.


Of the billions of dollars flowing into online advertising each year, a percentage is inadvertently shown to sites with fake traffic, with fraudsters siphoning off advertisers’ money for themselves. And while the individual instances of ad fraud tend to be modest in amount, combined they add up quickly: some $6.5 billion in ad spending will be wasted this year to fraud, according to a report released in May by the Association of National Advertisers.


Unlike infamous clickfarms, typically found in some shady warehouse in India or Bangladesh, the methods used by fraudsters are highly sophisticated. Some infect unsuspecting consumers’ computers with malware to form a “botnet” that clicks on ads in the background.


And while ad fraud has long been a well-known, if unresolved, problem associated with online advertising, what makes Google"s admission unique is that for years the company had claimed to have it largely under control.





The search giant has had teams dedicated to filtering out fraud before an advertiser makes a bid on an ad. Those teams can also prevent exchanges from being paid if an ad has already been bid on, but invalid traffic is quickly detected. The teams also work to discover historical instances of fraud, which is what happened in this particular case.



In other words, Google confirms that a substantial chunk of revenue that it, and others like it, pocketed over the years was never actually earned. It also may explain the recent shift in the mood of online advertisers, such as P&G, which failing to generate the desired IRR, decided to cut back on advertising altogether.


Needless to say, any blowback against online advertising which is rapidly eclipsing conventional advertising media such as print and TV, would have a staggering impact on the valuations and stock prices of some of the most valuable companies in the world, among which Google and Facebook to name a few. As such while Google"s admission is commendable, the question is not just how endemic "ad fraud" has become but also how credible any new anti-bot initiatives could be. If, as Google admits, as much as 10% of recurring revenue is "fake", if only applies a generous forward multiple to this, the impact to shareholders would be dramatic. Of course, if the real "ad fraud" number is notably higher, then it could eventually lead to a crash among the ad-driven tech giant space, which as disclosed in the latest 13F reporting period, is where the bulk of the hedge fund money is invested. Which is also why preserving credibility is suddenly so critical to the like of Google, because if and when doubts emerge among investors about the company"s otherwise opaque revenue practice, then what until recently has been Wall Street"s darling sector will be abandoned in a hurry.


For more on this topic, please read: "It"s the Biggest Scandal in Tech (and no one"s talking about it)"

Monday, August 7, 2017

Will China Use Blockchain To Collect Taxes?

Authored by Mac Slavo via SHTFplan.com,


The Chinese government listed blockchain in its “Thirteenth Five-Year” National Informatization Plan from 2015, and since that time the nation has been working diligently toward the incorporation of the technology into daily life.


China has just announced that it will use blockchain technology for social taxation and the issuing of electronic invoices.



The government’s announcement that it “will utilize blockchain technology for social taxation and electronic invoice issuance matters,” has been met with silence from the mainstream media.



China has already launched a test of its own cryptocurrency based on the technology, so these initiatives should be able to build on each other.  This will also be a large-scale test of a government’s ability to collect taxes more efficiently, considering China has the biggest economy on earth.



Moving forward, experts claim that we will all see more and more innovative uses of blockchain technology as its potential is more fully realized. Transparency and security are both absolute essentials in a digital age, and China appears to be recognizing that need and putting this powerful tech to use through policy, enforcing theft through taxation.  


But it’s unclear as of yet, just when China will begin using Blockchain to tax. Blockchain technology has been proposed for use in elections already due to its potential for both transparency and security. It’s these features that make it appealing for taxation as well.





Furthermore, we should also see implementation at the city level in China, as several local and provincial governments have recently promulgated pro-blockchain policies.



In fact, a smart cities initiative has already enticed a Chinese automaker to integrate the tech into its business model. Additionally, blockchain-based industrial parks have gone up in Chengdu, Hangzhou, and other major cities, and agencies at different levels of government have created blockchain R&D teams.



Futurism



Tax professionals in the United Kingdom have also discussed implementing Blockchain to ease the financial burden of collecting taxes from their peasants.


With the good, comes the bad.


Once governments begin using technology such as Blockchain, they will do it with efforts to steal productivity or funds or liberty from civilians.  Governments around the world (especially the United States) are losing support rapidly and as such, implementing stifling means of collecting taxes will almost certainly rile up the masses.

Saturday, August 5, 2017

‘We Will Find You’: White House Ominously Vows to Destroy Whistleblowers—End Transparency

leaks

(CN) – The Justice Department is making changes to its policies on subpoenaing news organizations as part of its crackdown on government leaks, Attorney General Jeff Sessions said Friday.


“We respect the important role that the press plays, and we’ll give them respect, but it is not unlimited,” Sessions said. “They cannot place lives at risk with impunity. We must balance the press’s role with protecting our national security and the lives of those who serve in the intelligence community, the armed forces and all law-abiding Americans.”


Sessions noted during a late morning news conference that the DOJ under his leadership has devoted more resources to “seriously ramping up” investigations of classified leaks.


Since he took over, Sessions said the DOJ has charged four people for classified disclosures or hiding contacts with federal officers.


He outlined a zero tolerance policy for classified leaks from government employees.


“Criminals who would illegally use their access to our most sensitive information to endanger our national security are in fact being investigated, and will be prosecuted,” Sessions added.


The attorney general said the department does not confirm or deny the existence of specific investigations, but nevertheless offered that “since January, the department has more than triple the number of active leak investigations compared to the number pending at the end of the last administration.”


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Sessions also stressed repeatedly that a way to solve the problem is to change the culture in government, which routinely leaks classified information. After a review of how the agency handles leak investigations, Sessions said he said he discovered “too few referrals” and “too few investigations.”



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“This culture of leaking must stop,” he said. Directing his comments to would-be leakers, Sessions cautioned: “Don’t do it.”


The press conference came after eight months of continuous leaks that have beleaguered the White House and the Trump administration, the latest of which on Thursday revealed details of conversations President Trump had with Mexican President Enrique Pena Nieto and Australian Prime Minister Malcolm Turnbull.


Trump has repeatedly called for the DOJ to more aggressively prosecute leaks.


“I strongly agree with the president and condemn in the strongest terms, the staggering number of leaks undermining the ability of our government to protect this country,” Sessions said.


“No government can be affective when its leaders cannot discuss sensitive matters in confidence or talk freely in confidence with foreign leaders,” he added.



Sessions said the National Security Insider Threat Task Force, established in 2011 during the Obama administration, has made some changes to help ramp up their efforts to investigate and prosecute leaks of classified information.


He said the agency would prioritize cases involving classified disclosures, which Deputy Attorney General Rod Rosenstein and newly confirmed FBI director Christopher Wray will oversee.


Part of the DOJ’s ramped up effort also includes a new FBI unit dedicated specifically to investigating media leaks.


During an untelevised session after the press conference, Rosenstein said the unit was created because media leaks pose unique challenges.


He had no comment, however, when asked if he would commit the agency to not prosecuting journalists. But he did say that he anticipates meeting with media representatives before making any changes to the agency’s policies on media subpoenas.




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Rosenstein stressed, when asked, that the department is only reviewing those policies and taking a “fresh look” at them.


He did not say what, if any, changes the department is considering making to those policies.


During the press conference, Director of National Intelligence Dan Coats said the intelligence community has in the past several years had to contend with the worst disclosures of classified information it has ever faced.


“They have resulted in a major threat to our national security,” Coats said, adding that they have endangered the lives of Americans at home and abroad.


Rosenstein had no comment when asked to elaborate on Coats’ comment, saying that he would not specify how leaks put American lives on the line.


Sessions, Coats and Rosenstein all said the DOJ should do more to make government employees with legitimate concerns aware of proper internal whistle blowing channels.


According to Coats, the National Counterintelligence and Security Center, which the Office of the Director of National Intelligence oversees, will make recommendations to strengthen the security clearance process.


Efforts will also be made to restrict the universe of government employees classified information is circulated among in order to narrow the pool of potential leakers, making them easier to identify, Rosenstein said.


Coats said his agency would take all steps necessary to identify leakers and will support prosecution. He added that he will exercise his full authorities as DNI to punish leakers, issuing a warning of his own to would-be leakers.


“We will find you, we will prosecute you to the full extent of the law, and you will not be happy,” he said.



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Thursday, July 13, 2017

Hackers Steal Swedish Security Company CEO&#039;s Identity, Declare Him "Bankrupt"

The 59-year old CEO of Swedish Security Firm Securitas was declared bankrupt this week after hackers stole his identity, took out a loan in his name, then filed for bankruptcy.  As Bloomberg noted, “the sub-optimal branding implications were hard to miss.”


Securitas AB hopes to have put the whole awkward incident behind it by the end of the day. According to Bloomberg, the appointed bankruptcy trustee has been informed and will support the appeal of the bankruptcy decision, which is expected to be removed, Securitas said. Securitas CEO Alf Goransson is appealing the July 10 bankruptcy decision by the Stockholm District Court, which acted on false information, the company said on Wednesday. The appointed bankruptcy trustee has been informed and will support the appeal of the bankruptcy decision, which is expected to be removed, Securitas said.






“The perpetrator used the CEO’s identity to seek a loan of an undisclosed amount, after which a bankruptcy application was filed in his name. The identity theft took place in March. Goransson didn’t know he’d been hacked until this week, the company said.”



The hack attack “has no effect on the company, other than that our CEO has been declared bankrupt,” spokeswoman Gisela Lindstrand said. “And that will hopefully only last until later today, depending on how soon they can remove the decision.”



However, the theft, as Bloomberg notes, raises questions about security in a society that is leading the way in digitization. Sweden is well ahead of most of the rest of the world in replacing cash with digital payments - even homeless groups there accept credit cards.


Even a museum dedicated to the pop group Abba – the group that popularized the song “Money, Money, Money” – doesn’t accept cash.





At the country’s Abba museum, tourists aren’t allowed to pay for anything with cash.



Has Sweden’s commitment to transparency created an environment where identity theft is commonplace? The statistics would say yes.





“The country’s efforts to embrace transparency in all fields are also well documented. Sweden encourages widespread access to public information (employees can find out what their colleagues earn by checking with the tax authorities) and, like most other rich countries, online shopping and loan applications are on the rise. All of this has coincided with a sharp increase in identity fraud. Sweden responded last year by introducing specific legislation to target the development. Goransson’s case was one of 12,800 crimes involving hacked identities reported in Sweden in the first six months of 2017.”



Goransson has been de-registered as chairman of Loomis, a cash-handling company that used to be part of Securitas, in accordance with formal procedures of the Swedish Companies Registration Office. Goransson is also expected to appeal this decision after he gets the bankruptcy ruling thrown out, according to Bloomberg.

Monday, June 26, 2017

First India Bans Cash, Now It&#039;s Targeting Gold

Authored by Jeff Paul via ActivistPost.com,


In November of last year, India banned certain cash notes in a bold move to force businesses into the banking system to better harvest more taxes from its livestock.


Now, under the guise of “improving transparency” and forming a “common market,” India has begun targeting gold with new taxes, regulation, and incentives for citizens to turn over their undeclared gold to the financial sector.



Roughly 86% of India’s economic activity happened in cash at the time much of it was banned. Presumably that includes the $19-billion-per-year retail gold industry. Again, it appears that India’s government (central bankers) wants a bigger cut of the action and to better track the private assets of citizens.


Bloomberg has been reporting that India’s government is teaming up with crony gold dealers to plan a complete revamp of its gold policy – which is always code for “control, regulate and tax.”


Bloomberg reports:





India, which vies with China as the top consumer of bullion, is working on new policies to improve transparency and help expand its $19 billion gold jewelry industry, according to people with knowledge of the matter.



The plans being worked out by the finance and commerce ministries along with industry groups should be finalized by the end of March, the people said, asking not to be identified because they aren’t authorized to speak publicly….



The start of a spot bullion exchange, to make gold supply more transparent and help enforce purity standards, is under consideration, the people said. An import tax of 10 percent could also be reduced as the government seeks to eliminate smuggling, they said. The plans also include a dedicated bank for the jewelry industry, according to one of the people.



The overhaul of India’s disorganized and fragmented gold jewelry industry is meant to bolster confidence among consumers, where the gifting of gold at weddings and festivals or its purchase as a store of value are deeply held traditions. Ensuring quality standards and allowing supply chains to be easily tracked are ways to enhance trust.



In addition to a 10% import tax on gold, which authorities admit causes smuggling, India recently placed a 3% nationwide goods and services tax on gold that goes into effect on July 1st. Grateful slaves celebrated the event as a “lower than expected rate” and as creating a “common market,” Bloomberg reported when the tax passed:





India fixed the duty at 3 percent over the weekend, lower than the 5 percent expected, Ketan Shroff, joint secretary at the India Bullion and Jewellers Association Ltd., said Monday. The goods and services tax, to be implemented from July 1, will replace more than a dozen domestic levies including excise tax and state tariffs, drawing India for the first time into a common market.



ProTip to wannabe dictators: If you’re a tyrant who wants to centralize power over an industry, first frighten large businesses into your cartel protection racket. Then, eliminate local sovereignty over markets while imposing your own regulations and taxes. But call it “drawing into a common market” and “improving transparency to protect them.” Works every time. The final step is to prosecute non-compliance using men with guns.


The creation of a spot market and special bank for gold jewelers (as rumored above) seems like a function that doesn’t require government at all. Yet if your goal was to track, trace and database your citizens’ undeclared gold assets, it makes perfect sense.


Bloomberg makes clear that the new policies aim to encourage citizens to turn over their “idle gold” to the financial system:





The government is also keen to get the public to recycle its jewelry to reduce the nation’s reliance on imports. After a slow start to its plans to monetize the precious metal held in households and institutions, the government is looking to tweak the scheme and attract more participants, the people said, without giving details. The initiative, launched in November 2015, was aimed at returning an estimated 20,000 metric tons of idle gold to the financial system.



It’s reminiscent, albeit a softer version, of Franklin D. Roosevelt’s Executive Order 6102 “forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States” which criminalized the possession of monetary gold. Citizens were forced to turn over their gold for a set amount of government currency. We’ll have to wait and see how India “tweaks the scheme.”


Credit Suisse confirmed the latest moves in India are designed to force the gold trade onto the banking system in partnership with the central government to better track and tax the industry.


Credit Suisse Group AG told Bloomberg the (gold) sector will find it tougher to evade taxes as legal imports go through the banking system, and a full trail will now be established by the new nationwide tax compared with previous duties which were levied at the state level only.”


This echoes what Credit Suisse Group AG analysts Arnab Mitra and Rohit Kadam previously said of the coming changes to the Indian gold industry: “Over the next two to three years, the new tax should gradually force smaller, unregulated players to become tax compliant and take away their price advantage, increasing market share for bigger, organized businesses.


There you have it. The cashless agenda of control laid bare. There shall be no economic activity outside of State control. Cartels that play nice will be rewarded with more market share.


It remains to be seen if an already angry Indian citizenry can be persuaded to gift up their tradition of storing and gifting gold.

Monday, June 5, 2017

Stocks, Bonds, Euro, and Gold Go Up, Report 4 June, 2017

The jobs report was disappointing. The prices of gold, and even more so silver, took off. In three hours, they gained $18 and 39 cents. Before we try to read into the connection, it is worth pausing to consider how another market responded. We don’t often discuss the stock market (and we have not been calling for an imminent stock market collapse as many others have).


The initial reaction in the US equities market (futures, as this was before the opening bell) was down. But it was muted, and then in a few hours turned around and the market ended even higher.


Each stock represents a business. Presumably, if jobs growth was disappointing then this is bad for stocks on two grounds. One is that companies hire based on their revenue expectations. Slow or no hiring means slow or no revenue growth. The other is that people who aren’t hired don’t buy as much, and so there is a feedback loop into sluggish business revenue growth.


However, the stock market disagreed. It said let’s cut the earnings yield a bit more, from 3.94% to 3.93%. This presumably means that earnings are set to take off (or it could mean that everyone from wage-earners who pour their surplus into the stock market to older speculators are not thinking about earnings yield).


Not only did the stock market go up, so did the euro. As did US Treasury bonds. And, finally, gold and silver. What is the one thing that these all have in common?


It is possible to borrow to buy these assets.


We read this as a garden-variety day of credit expansion. Folks, this is how the monetary system is supposed to work, according to mainstream economic thought. Based on <insert story du jour>, people borrow to buy assets. This creates a wealth effect, as rising asset prices makes people (at least those who own those assets) feel richer. When they feel richer, they go out to eat more, buy more Rolexes and Porsches, and that employs everyone else. Or so their theory goes.


Stock analysts have a wealth of material to study the fundamentals of public companies. We leave that work to them. We have a theory, model, and now a robust software platform to study and calculate the fundamentals of gold and silver.


We will show charts of the fundamental prices we calculate. But first, a look at the prices of the metals and gold-silver ratio.


letter-jun-04-prices


Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It moved up a bit, though down on Friday.


letter-jun-04-ratio


In this graph, we show both bid and offer prices. If you were to sell gold on the bid and buy silver at the ask, that is the lower bid price. Conversely, if you sold silver on the bid and bought gold at the offer, that is the higher offer price.


For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.


Here is the gold graph.


letter-jun-04-gold


We had a dropping price of the dollar (the mirror image of the rising price of gold), and a slightly falling abundance (the basis) and slightly rising scarcity (the cobasis).


Our old model shows an increase in the gold fundamental price of $19 ($1,267 to $1,286). Our new software also shows an increase, though smaller and at a higher level ($1,330 to $1,334). We plan an article to discuss this difference.


Now let’s look at silver.


letter-jun-04-silver


In silver, there is a slight increase in abundance and decrease in scarcity as the price has risen.


Our old model shows an increase in the silver fundamental price of $0.05 ($16.12 to $16.17). Our new software, however, shows a decease and not a small one ($17.97 to $17.62). Here is a graph.


letter-jun-04-ag-fund


Note that the fundamental price (new software platform) is rangebound from early March. It is considerably less volatile than the market price, which is what we would hope for.



Keith will be in London the week of June 19, and in New York the week of June 26. If you’re interested in attending a Monetary Metals seminar on GOFO and transparency in the gold market in either city, or to meet with Keith to discuss gold investment, please click here.



© 2017 Monetary Metals