…it’s an odd day & apparently all my technology has the hump with me…which…is probably fair since I return the favor with some of it on a fairly constant…if rotating…basis…but…for a change…I’m thinking aside from the first exception to prove the rule…that I might go with just stuff out of the weekend edition of the FT…because if I start in on…you know…elections & stuff…I might sap the remaining will I appear to possess & then nobody takes the dog for a walk & when the rest of the household gets home chaos ensues & by the time anyone gets to go to bed there’ll probably be tears…so…exception first

There is no doubt the Republicans on SCOTUS (hereinafter R-SCOTUS) are lined up behind Trump in his criminal cases. The timeline in the ridiculous immunity case and the decision in the Colorado ballot case are clear demonstrations of their commitment to his reelection despite his obvious unfitness for office.

…I know…it’s sort of election-adjacent…so I might be pushing my luck & stretching a definition or two…but neither is under the sort of torque being applied by the court so I figure I can give myself a pass like they do?

Barrett and the Democratic appointees expressly dissented from the majority’s holding that only Congress can enforce the Insurrection Clause, and only with the approval of SCOTUS. The majority concludes with this:

These are not the only reasons the States lack power to enforce this particular constitutional provision with respect to federal offices. But they are important ones, and it is the combination of all the reasons set forth in this opinion—not, as some of our colleagues would have it, just one particular rationale—that resolves this case. In our view, each of these reasons is necessary to provide a complete explanation for the judgment the Court unanimously reaches.

That last quote refers to the part of the per curium opinion saying that § 5 of the 14th Amendment

… limits congressional legislation enforcing Section 3, because Section 5 is strictly “remedial.” To comply with that limitation, Congress “must tailor its legislative scheme to remedying or preventing” the specific conduct the relevant provision prohibits. Section 3, unlike other provisions of the Fourteenth Amendment, proscribes conduct of individuals. … Any congressional legislation enforcing Section 3 must, like the Enforcement Act of 1870 and §2383, reflect “congruence and proportionality” between preventing or remedying that conduct “and the means adopted to that end.” Citations omitted.

…if you believe the part about this not being a retro-engineered attempt to arrive at a predetermined position based on a singular rationale…you might not be as smart as I think you are…but an old dude who can’t be fired will happily lie right to your face, it turns out

The women on SCOTUS agree that this is unnecessary for the decision. It’s purely a creation of the SCOTUS men. It prescribes no standards, and it arrogates power to SCOTUS at the expense of Congress.

I note that the claim that the 14th Amendment only applies to the actions of individuals is the invention of an earlier SCOTUS, in cases like US v. Cruikshank and The Civil Rights Cases, which I discuss here and here. The Congress that drafted the 14th Amendment thought it had the power to legislate against the KKK and other violent white supremacists acting in their private capacity. For example, in Cruikshank, SCOTUS said principles of federalism mean that the 14th Amendment only applies to state action. Those early  rancid decisions are never questioned even though we now have thousands of federal laws governing individuals.

The kicker is that any restrictions on Congress say nothing about limitations on the States. And any limitations SCOTUS dreams up to control Congress of power can just as easily be applied to the states, and with just as much historical and legal justification.

…they already set their cap for their guy…so the stall they seem to be setting out is…not exactly a surprise…but…it looks shonky if you ask me

This is an interlocutory appeal. The decision of the Circuit Court was clearly right. There was no need for SCOTUS to take this case at this state of the proceedings. No one thinks the president is entitled to blanket immunity. After sitting on it for two weeks, SCOTUS set the case for “expedited” review seven weeks later. Who knows when they’ll issue a ruling.

It would be stupid for SCOTUS to take up the claim that Trump is immune from prosecution for any and all crimes committed in his official capacity. So SCOTUS rephrased the question presented:

Whether and if so to what extent does a former President enjoy presidential immunity from criminal prosecution for conduct alleged to involve official acts during his tenure in office.

This phrasing enables SCOTUS to screw up the trial by all sorts of legal trickery. For example, Trump is charged with “knowingly” participating in conspiracies. SCOTUS could hold that Trump is entitled to a presumption of immunity, and that the prosecution has the burden of proof on whether Trump intended to take actions outside his official duties. That would dramatically increase the burden on the prosecution.
[…]
I think R-SCOTUS members are bad at judging. They claim to be originalists, but that’s not what they did in the ballot case. The per curium opinion selectively quotes one iota of the history of the 14th Amendment and ignores the rest. It doesn’t address the mountains of information provided in the two amicus briefs filed by historians. It’s solely based on outcomes.

I discussed good judging in my post on Dobbs.  As I see it, good judging at the appellate level is solving hard problems in the way most likely to produce the best possible long-term results. Past cases and history are not absolutely binding, but provide guidance and wisdom (sometimes) from other judges. For this rule, I rely on Judge Richard Posner’s views, and those of Oliver Wendell Holmes and John Dewey’s pragmatism, but I won’t rehash that here.

What R-SCOTUS does is invent a bunch of reasons why their preferred outcome is right. The per curium opinion is jumbled to the point that they feel obligated to justify its lack of coherence.

https://www.emptywheel.net/2024/03/10/scotus-lines-up-behind-trumps-defensive-strategy/

…as ever…it’s worth reading the rest of what dr wheeler has to say…but…those guys on the court aren’t the only ones who feel themselves secure enough to not care overmuch how obvious it is that they’ve been working backwards to claim it makes sense to go from where we are to how they think things ought to pan out…it’s…not exactly a modern phenomenon?

Today, Opus Dei has 95,000 members worldwide, some of them highly influential. In the US, for example, the Catholic Information Centre, an event space run by Opus Dei priests, claims that its chapel is the “closest tabernacle to the White House”. Its supporters have been central to the conservative takeover of the US judiciary. High-profile Opus Dei members elsewhere include the late Luis Valls, former president of Banco Popular, Patrick Njoroge, current governor of the Central Bank of Kenya, and Guillermo Lasso, the president of Ecuador until last year. Within the Church, Opus Dei members have been in charge of the Vatican’s press office and its bank.

Connections like these fuelled the hyperbolic and nefarious depiction of Opus Dei in Dan Brown’s 2003 thriller, The Da Vinci Code, and its subsequent film adaptation. Ever since, the elite standing of its membership has fuelled speculation about the group’s influence in business, education and politics. Far less known are the women whose labour has propped up Opus Dei for decades. Called “assistant numeraries”, they give their lives to the organisation as domestic workers. In many cases, they have done so without pay and against their will.
[…]
The women in this article are the first to speak publicly about Opus Dei’s treatment of assistant numeraries in the western world. They are doing so at a time when the organisation’s status within the Church is in flux and it has had to question some of its foundational principles, including the role of its domestic workers. But at Ballyglunin, Anne Marie wanted one answer in particular: how did an organisation of people trying to lead virtuous lives end up causing so much harm? “The day that I came here, my life changed for ever,” she said. “It was devastating what happened to me and to others here. I was a child, you know.”

…suffer the children meant something else, as I recall…still the FT put that out under the heading

The Opus Dei diaries
How girls around the world were coerced into decades of gruelling service to the secretive Catholic group

…but…if you were poking about on the web archive you’d find it here…still & all…I can’t help thinking this kind of thinking isn’t unique to the clergy or the judiciary…even if both are classes with an over-representation of old white dudes who haven’t had it tough, comparatively speaking…unlike…say…the girls that cleaned up after them along the way…although…they might be feeling the pinch in a few places?

When Reddit lists on the New York Stock Exchange next week, the social media platform is expected to carry a valuation of up to $6.4bn — well down on the $10bn it was worth in 2021. It will be the first high-profile tech start-up to list since Instacart, which was valued at $10bn in its initial public offering in September, just a quarter of the eye-watering valuation placed on it by investors in 2021.

Despite the combined nearly $35bn write-off of supposed shareholder value, these “down round” IPOs are not being met with derision in Silicon Valley. Instead, they are a signal that rationality is slowly returning to venture capital.

Down round IPOs “are not only going to become common, they will become the standard for the class of 2021”, says Venky Ganesan, a partner at Menlo Ventures. He is referring to a group of late-stage companies whose valuations soared that year as investors, punch drunk on low interest rates, poured in astronomical sums. US venture investment in 2021 was a record $345bn, more than double the previous year.

Now start-ups are running out of cash and venture capital funds need to return some money to their investors. “I am encouraging all of our companies who have the financials to support going public to go public,” Ganesan adds. “Down is the new up.” 

…no need to break out the sympathy, though…they seem to be feeling pretty good about the whole thing

It is a sentiment that has been rippling across Silicon Valley with increasing confidence in recent weeks as technology stocks rally, partly on the booming prospects of artificial intelligence. “People who were hiding in their caves are now wandering outside and feeling good and that is palpable,” a co-founder of a large venture firm told me.

Successful new investments in AI could offset a multitude of misjudgments in the recent past. And there is a growing consensus that it is finally time for founders to swallow their pride, accept a massive haircut to valuation and help establish a new floor for their stock to start growing again, helping to encourage all the companies coming up behind them to do the same. 

…but…some stuff is less immune to “correction” than other things &/or people

Still, when listings start happening in force, there will be some seriously painful consequences for later-stage investors who fuelled the 2021 start-up bubble. There are hundreds of companies that were funded in a low interest rate environment that should have been shut down or sold, but have managed to only delay the inevitable reckoning. A valuation cut might not be the worst outcome for many.

The looming crunch also highlights the cost of the herd mentality in the venture capital industry, which has become comfortably used to mostly moving en masse and in the same direction. The rush erodes discipline.

In 2021, deep-pocketed investment funds competed for ways into overpriced fledgling companies. In many cases, they signed away key protections, including those that allowed them to veto an IPO below a certain price.

Unlike a sale of a company or a liquidation, a stock market listing converts all preferred stock held by a business’s venture investors to the same common stock held by employees and management, extinguishing the various rights secured by backers over rounds of raising private funds. The drop in valuation combined with the lack of protections means late-stage investors have little recourse to prevent decisions likely to result in punishing losses. 

…caveat emptor & all that fun never-get-involved-in-a-land-war-in-asia stuff about not doing business with elon musk…or assmunch von hairspray begging for a half-billion bond with an upturned MAGA hat…or…*deep breath*…no…not getting into putin…or elections…not today…gotta remember that part

“It is becoming increasingly clear that whatever was underwritten is no longer the case,” said one venture capitalist at a firm that controls billions of dollars. If Silicon Valley is moving through the stages of grief from denial and anger to acceptance, that might be a healthy thing in the long-run.

Reddit IPO reveals the reality check for Silicon Valley [FT] [archive.ph]

…you’d be forgiven for thinking this might be one of them accidents of hourly proof or something high-falutin’…but…probably nah?

Jay Gatsby, Albert Einstein, Frodo Baggins, John Pierpont Morgan, Michael Jordan, Bill Gates, Elon Musk, Mark Zuckerberg, Warren Buffett, Michael Milken, Bernard Madoff, Charles Ponzi — the list of people to whom Sam Bankman-Fried has been compared is an extraordinary one.

He seems destined to be remembered alongside those last three names, after being convicted of what prosecutors called “one of the largest financial frauds in American history”. The Californian, who has just turned 32, is set to be sentenced this month on charges that could see him spend decades behind bars.

But what is our verdict on crypto? Have we learnt the lessons from the disastrous 2022 crash in digital assets? To judge from recent action in the crypto market, the answer appears to be no.

…I know…shocker…not least in light of the green light on the ETF hookup

Since hitting bottom after FTX collapsed into bankruptcy with a $9bn-ish hole in its balance sheet in November 2022, crypto market values have roughly tripled. Bitcoin’s price rose above $70,000 this week to touch record highs. A new wave of enthusiasm is growing, with institutions such as BlackRock and Invesco moving into the market.

…plain sailing?

Oddly, both critics and defenders of digital assets have often tried to frame the Bankman-Fried case as if it had nothing more to do with the fundamentals of crypto than if he and his cronies had committed fraud through telemarketing or selling shoddy double glazing.

For fear of confusing the jury, prosecutors at Bankman-Fried’s US fraud trial, which I covered for the FT, argued that the embezzlement of customer money from his FTX cryptocurrency exchange to his private trading firm Alameda was “stealing, plain and simple”.

…the simple part…not so much?

If you want to try to get your head around crypto, starting with the technology is often a recipe for further confusion. You can spend hours contemplating blockchains, hash rates, consensus mechanisms — and more esoteric subjects like parachain auctions and flash loans — without getting any closer to understanding how crypto works in the real world.

Technical explanations will almost always tell you that crypto’s key attribute is that it is decentralised. It is not. This is problem number one.

The notion of decentralisation has been at the heart of crypto since Satoshi Nakamoto, the pseudonymous creator of bitcoin, launched the modern cryptoverse in their 2008 white paper. The idea was that blockchain technology, which creates an unchangeable record of transactions shared between multiple computers, could supplant intermediaries such as banks, brokers and regulators.

…can’t help but feel supplanting our whole model of legal tender…would look a little different…but that’s a whole other rabbit hole

The white paper implies a vision for digital assets that runs something like this. Step One: invent a clever system that allows payments with no middlemen (this is bitcoin). Step Two: popularise bitcoin so that banks and financial institutions become redundant. Step Three: build on top of this innovation to make a whole new economy that is better for everyone.

In reality, crypto got stuck at Step Two. Decentralisation did not catch on because it requires people to take absolute responsibility for their money. We have all read the stories about people who forgot the password to unlock their crypto fortune, or threw away a tiny hard drive back when crypto was worth peanuts, only to find that it is now worth millions. In a decentralised world, there is no mechanism to recover from these human errors.

…I dunno if the underpants gnomes qualify as “art”…but they must be held in high regard by a lot of crypto types…I mean they say imitation is the sincerest form of flattery & all?

Now, a new set of central institutions are entering the market. It’s never easy to figure out exactly why crypto markets are moving. Crypto is a vibes-based financial market. The lack of fundamental anchors such as earnings or interest rates mean that crypto trades overwhelmingly on sentiment. But the proximate cause of the recent return of “good vibes” to the crypto market appears to be the Securities and Exchange Commission’s decision to allow direct crypto exchange traded funds (ETFs) run by investment institutions to enter the US market. 

The irony of this development is remarkable. The bitcoin white paper, crypto’s founding text, says: “The main benefits are lost if a trusted third party is still required.” When you consider that the big positive news in cryptoland today is that BlackRock has opened a bitcoin fund that trades on the Nasdaq, it’s hard to escape the conclusion that the main benefits have been lost.

…markets…they’re what you make of them?

BlackRock’s bitcoin ETF reached $10bn faster than any ETF in US history. Although all such funds benefit from the run-up in crypto prices, they will continue to earn fees as long as retail investors are hanging on for the ride.

The persistence of middlemen in crypto builds on customer demand. People on the whole have enough common sense to know that we are fallible. The very clever tech behind bitcoin was undermined because it didn’t take human nature into account. 

…& some of these people are plenty smart…so…the idea they might be on to something isn’t odd when you think about some of the more out-there mechanisms by which people have managed to leverage their way to astronomical wealth

Arthur Hayes, the former chief executive of crypto exchange BitMex, once commented: “While bitcoin is supposed to be this libertarian, be-your-own-bank kind of thing, most people are pretty lazy, and are perfectly fine with buying some crypto and holding it on the exchange as if the exchange was a bank.” 
[…]
Starting in 2016, Hayes pioneered the financial instruments that became the most traded in crypto — which are actually hyper-leveraged derivatives contracts based on crypto prices, not the crypto tokens themselves. But he lost control of his company, BitMex, and was forced to plead guilty in the US in a 2020 case that centred around failure to respect US jurisdiction and money-laundering rules. 

…maybe it all comes down to perspective

Even with the example of Hayes hanging over them, crypto companies’ persistent battle with national authorities points to their second fundamental failing. Crypto still often wants to be above the law. 

This impulse goes back to the invention of bitcoin in reaction to the failure of banks and regulators in the global financial crisis. But the result has been a complete perversion of the initial vision. 

We are invited to replace financial intermediaries such as banks — which are overseen by broadly competent, democratically accountable regulators — with a crypto-financial system that allows a sleep-deprived 28-year-old like Bankman-Fried untrammelled power over a $40bn financial institution. I think it’s very hard to argue this is a good idea. 

…@farscythe mentioned yesterday that striking the wrong note when invoking the term “bloody” might be grounds for concern that a brit was losing touch with his birthright…& joshua oliver may turn out to hold a different passport…but based on the understatement that closes that para…the man’s at least an honorary brit if you ask me?

In the face of offshore entities such as FTX, UK regulators struggled to enforce a ban on crypto derivatives trading brought in to protect amateur investors in 2021. Even the US has not been able to stop its citizens from reaching offshore venues. 

The ultimate example of this phenomenon is not actually Bankman-Fried, but his nemesis. Changpeng “CZ” Zhao, founder of Binance, still the largest crypto exchange, made an eleventh-hour offer to buy FTX as it spiralled towards bankruptcy, but then pulled out — dooming Bankman-Fried. Zhao described his company in its early years as a “pirate ship”. 

Binance has long refused to name its headquarters, and for years even tried to shroud the location of its main offices. By refusing to make landfall in any country, it was able to drift away from regulatory pressure in one jurisdiction and appear in another. Its local subsidiaries might take the heat, but the main moneymaking engine, its online crypto exchange Binance.com, stayed safely in international waters. 

A senior Binance executive once explained the logic bluntly: “We do not want [Binance].com to be regulated ever.” The company claims it has since changed course. Zhao last autumn pleaded guilty to US charges. He could face jail time even after Binance agreed to pay $4.3bn to settle its differences with the Feds. 

…uh huh…& I should give hard earned cash money to these people for “virtual” currency because that will make *me* rich…uh huh…well…that bridge they sold me was a bust but this seems much more substantial…right?

You could argue that recent developments such as the US ETF launches suggest crypto as it matures is getting over its problems with authority. Crypto is indeed inching towards more regulation. But simply putting an asset such as bitcoin into a regulated vehicle like an ETF doesn’t change the wild west nature of the market that determines crypto prices, which is still fraught with potential for manipulation and abuse. 

…it’ll probably be fine

Crypto promises to “democratise” finance. It takes the power to create new, easily tradable assets out of the hands of a few institutions and gives it to everybody. A helpful parallel is how Twitter and other social media platforms smashed the monopoly of mass publishing. What the internet did to newspapers and broadcasters, crypto promises to do to finance.

…I mean…twitter’s all good…right?

Here we need to distinguish between bitcoin and the thousands of other crypto coins out there. The total number of bitcoins is limited by design to 21mn. But for many others, there is no limit on supply. Anyone with a certain level of computer skills can launch a new coin in minutes. 

This is a remarkable and revolutionary idea. But is it a good one? So far, unconstrained asset creation in crypto does not have a good record. The crypto analytics company Chainalysis tried to gauge the number of scam tokens launched in 2022 by looking for coins that lost most of their value shortly after launch. Of about 40,000 launches that year, a quarter lost 90 per cent of their value in the first week. Investors were burnt every time. 

Unlimited asset printing is also a crucial reason why the crypto market blew itself up in 2022. Within Bankman-Fried’s empire, a token issued by FTX, known as FTT, was used by Alameda as collateral for billions of dollars of borrowing.  

…money from nothing…it’s the ultimate alchemy…or so they tell me…I clearly misunderstood the whole concept of the awesome power of transmutation…I thought it was about being able to manipulate the universe in ways that would make money obsolete…like that star trek replicator business heralding a post-scarcity remix of society…not the most resource-intensive infrastructure ever devised to produce the shakiest unit of volatile “value” ever to syphon life-savings…but…you know…that’s probably why I don’t make the big bucks?

Imagine that you have a notebook of 100 sheets of paper, and you write “money” on every page. If you can sell the first sheet to some true believer for $1, then you can give the rest of the notebook a paper value of $99. What if you could then use that $99 as collateral for a loan in real money, which you then spend? This effectively happened during the crypto boom, creating an incredibly fragile bubble of theoretical value. 

Hilary Allen, a law professor at the American University Washington College of Law who worked on the congressional commission appointed to study the causes of the financial crisis, explains how crypto took the errors of 2008 one step further. 

Before the crisis, she says: “We had a proliferation of financial assets that you could borrow against; leverage went through the roof; complexity went through the roof. You could take a house, create a CDO [collateralised debt obligation], put a derivative on it and have a synthetic CDO squared. But somewhere — very tenuously — there was a house. What crypto does is that it gets rid of the need for the house.” 

Without limits and oversight, free-for-all asset creation is ripe for abuse. “My concern about crypto has always been what the traditional financial system would do with it. If traditional finance sees that you can just make up financial assets, they are going to get in on that,” Allen adds. 

…it’s not that I don’t see the appeal

Alienation from mainstream finance has helped to bolster crypto’s appeal. Many people, perhaps especially those around my age who grew up around the 2008 crisis, have developed the suspicion that finance is a self-referential, corrupt and pointless game that helps the rich get richer and screws everybody else. 

…but…I mean…c’mon…do we need to draw a picture?

This critique is painfully true of crypto’s recent history. For all its faults, mainstream finance is crucial to our daily lives. Crypto still doesn’t play a meaningful role in the economy. Its value has always been underpinned by the belief that it is the future of finance. But price rises have run far ahead of any proof of genuinely practical applications gaining real traction. 

This list of crypto’s faults is not exhaustive. Its principal real-world application to date has been making life easier for criminals. (According to the DoJ, one Binance employee memorably joked in private that they needed a banner saying “is washing drug money too hard these days[?] — come to binance; we got cake for you.”) Creating some cryptocurrencies through so-called mining still has a rapacious energy consumption because of the computation required, and this generates next to no benefit for its high environmental cost.  

What crypto (still) gets wrong [FT] [archive.ph]

…because that doesn’t sound to me like it adds up to anything pretty…but then in eye of the beholder terms…I’m probably not the target audience…& in aggregate…the bad apples have a way of making that grouping look…not great?

A young man — the protagonist is traditionally male — goes to Wall Street to seek his fortune. He suffers a hazing ritual on a raucous trading floor. He endures this and gains the respect of other traders, then earns his first, delicious bonus. He is soon taking frightening risks, and triumphs at first. Finally, he fails and is disgraced, coming to grasp afterwards that money is a false god.

There have been many such tales over the years and publishers are eager for them. An inside glimpse of the high-pressure, high-reward, ultimately disillusioning life of traders is more tantalising than the average literary submission. Such tales also provide a satisfying shot of schadenfreude about the angst of the bonus-making classes for the rest of us.

Some concern rogue traders: I co-wrote one myself about Nick Leeson and Barings bank (All That Glitters, 1998). Perhaps the most influential and amusing portrait of raucous traders was Michael Lewis’s Liar’s Poker: Rising Through the Wreckage on Wall Street (1989), his memoir of the heyday of Salomon Brothers. Rather than getting into trouble, Lewis left to become a successful author.

Salomon Brothers was later acquired by Citigroup, but much of its culture endured. That comes across in The Trading Game, Gary Stevenson’s book about his experience of Citi’s bond trading floor at London’s Canary Wharf. Stevenson, who briefly became one of its highest paid traders following the 2008-09 financial crash, got burnt out, and has finally written this confession.

So ingrained is the image of the casino-capitalist trader and his dubious exploits that the casual observer could be forgiven for not realising that the financial centre of gravity on Wall Street and in the City has shifted. Today’s masters of the universe are often found on the “buy-side” at hedge and private equity funds, and more are now female.

It is rarer for this world to be exposed to view, and even rarer for the story to be told by a woman. So Private Equity, Carrie Sun’s memoir of her time as executive assistant to the boss of “Carbon”, a pseudonymous New York hedge fund, makes an intriguing change. Her trajectory from wonder to exhaustion and alienation is similar but the world she depicts is glossier — at least superficially.

That gloss may be one reason why the more vivid of this pair is The Trading Game. Stevenson, the son of a Post Office worker, attended the London School of Economics (like Michael Lewis) and then broke into finance by winning a recruitment trading game hosted by Citi. He possessed both a mathematical brain and an instinct for outwitting opponents.

…now…as it happens I heard the lad getting interviewed…& my guess is that’s probably a good read…& chock full of stuff that would make you reconsider a thing or two…maybe even about some stuff you wouldn’t expect to change your view about…he’s more than articulate…& he has an unusual perspective having gone from hard up to flashy flush before he hit his late 20s…but the culture it examines is largely composed of people to whom wealth is not that sort of life-changing

The role of Stevenson’s desk was to sell foreign exchange swaps to customers, but he makes clear that he and the others were chiefly motivated by making as much money for the bank, and by extension themselves, as possible. Since the bank’s formula was, he claims, to give its top traders a bonus of 7 per cent of revenues they made, they were acting rationally.

“If I try to put myself back into the shoes of me as a 21-year-old, all I can tell you is this: I was hungry,” Stevenson writes. Call it hunger, ambition or greed, the grinding culture and stark incentives of the trading floor induced ruthless competition and paranoia. “The only people you see here are the survivors. What you don’t see is the people who lost,” one trader observes.

This Hunger Games atmosphere did not make the victors happy but it made them money, and it offered the prospect of one day being able to walk away with their spoils. “What could I do with £2mn?” Stevenson once asked himself, fantasising about the annual bonuses he went on to make. “What couldn’t you do? You could do anything, You could retire. You could be free.” 

…& how many examples are there out there of young, hungry & crypto-positive folks with that same look in their eye as they cast it over those ETF options?

The ultimate exponent of that Ayn Randian mindset in Sun’s Private Equity is “Boone Prescott”, billionaire founder of Carbon (“the world’s hottest hedge fund”). Like the name of the firm, “Boone” is a pseudonym — and might not be too hard to work out. Boone is introduced as “the nicest”, but he also has a simple philosophy: “Carrie, remember, money can solve nearly everything.”

…can it, tho?

This being a rise-and-fall story, the reader keeps waiting for Boone’s mask of civility to slip. It never quite does and he remains relentlessly nice — with the emphasis on relentless. While showering Sun with encouraging pep talks and expensive gifts, he continues to pile on his work demands. “From my observation, he’s been destroying you,” a friend tells Sun. 

Stevenson’s own revelation came after the 2008-09 financial crisis, when he guessed that interest rates would stay low for much longer than others thought because economies would not recover fast or easily. By 2011 “it had started to become clear to me that the market was wrong,” he writes, and he took out a large, and very rewarding, bet on what he calls “the disaster trade”.

…the clue is in the name…& if your analysis is on the money then it is…in a very real sense…just doing your job…but when the horse you’re betting on is that the global economy is gonna step on rakes at a sideshow bob level…that sort of shit tends to make me think we’re not using our smart people very…uh…smart?

Carbon pampered its employees to ensure they remained alert and dedicated on the job, but it damaged Sun’s health. She describes her dismay at putting on weight, having gorged on cupcakes due to anxiety, and Boone’s sympathetic yet implacable response. “The institution is never wrong, you are always wrong. You have no one to blame but yourself,” was Carbon’s message, she concludes.

Despite the genuine distress of the authors, part of me wanted to respond at the end of these accounts: well, what did you expect? Did you come to the City and Wall Street to make millions (or, in Sun’s case, the near-$300,000 she ended up being paid annually as an executive assistant) and not know it would be soulless and stressful? Did you not read the other books?

“It occurred to me that Carbon did not have any superpowers beyond the boring and total efficiency of the enterprise,” Sun writes perceptively, and that is surely the point. These highly tuned machines make money by getting intelligent, ingenious people to compete fiercely to achieve the best financial results. If you seek deeper meaning, look elsewhere.

Two sharp memoirs give a glimpse of the steep rewards — and downsides — of working at the summit of the financial sector [FT] [archive.ph]

…also…don’t sleep on where you might find the smart people

On the morning of August 12 2020, the day he decided to fight the Uber Eats algorithm, Armin Samii woke earlier than usual. He dressed, made coffee and sat down at his computer where he remained for the next 16 hours, coding a web application and filming videos to show other couriers how to use it. He called it UberCheats, published it online at midnight and made it free to use.

UberCheats was an algorithm-auditing tool. Samii, who was working as a cycle courier for Uber in Pittsburgh, Pennsylvania, at the time, had lost trust in the automated system that essentially functioned as his boss. He had become convinced the Uber Eats app was consistently making errors and underpaying him. After weeks of trying and failing to get a human being at Uber to explain, he felt he had no choice but to take matters into his own hands.

Samii’s app performed a simple, yet crucial function. UberCheats was able to extract GPS coordinates from receipts and calculate how many miles a courier had actually travelled, compared to the distance Uber claimed they had. There is no set rate for Uber couriers since the platform prices jobs dynamically. Pricing can change by the hour, between different geographies and individuals. It is affected by everything from surges in demand to the weather. Because, at the time, Uber generally hid exact delivery locations from couriers after they’d completed their trips, it was hard for them to confirm how far they’d gone. When a courier received a receipt, all they saw was an anonymised route from A to B, alongside the number of miles and what they were paid. This meant delivery workers had no way to double-check any discrepancies.

…you’ll never guess what that looked like when you could run the numbers

Samii soon began to hear from Uber Eats workers around the world, in Japan, Brazil and Australia, in India and Taiwan. About 6,000 trips were logged on UberCheats in total, 17 per cent of which appeared to have been underpaid. Whichever city they were in, drivers were seemingly being underpaid by an average of 1.35 miles per trip, according to the data they were logging in UberCheats. One email Samii received read: “I just used your extension and found that 8.31 per cent of my deliveries were affected . . . At least one every day. If you do gather enough data for a class action suit, I will gladly participate. Thank you for your work on this.”

Samii was part of a growing global workforce who labour in the service of algorithms. There are now more than a billion workers in their ranks in one form or another. Apps use AI that hands down edicts to these workers via their mobile phones. Machine-learning software allocates drivers their jobs, verifies their identities, determines dynamic pay per task, awards bonuses and detects fraud. It even makes hiring and firing decisions. And the rules these workers live by are highly changeable, rewritten based on a continuous stream of data.

Samii likes to tell stories, spinning little details into important plot points. When I asked him to describe what it feels like having a black box as your boss, his answer was: dehumanising, soul-crushing, frustrating. It’s a job with a false sense of autonomy. “Take my very first experience of it,” he said. In July 2020, when he tried to sign up as a courier to Uber Eats, the app required an identity check. He had to take a selfie, which would be verified by a facial-recognition system.

Except it didn’t work. He kept taking photos and the app kept rejecting them. “I know this is a huge problem for people of colour. I don’t know if it was my hair being bigger or a big beard that I had, but there was some sort of algorithmic error,” Samii said. “That happened three times.” The fourth time, he washed his hair, tamped it down and then opened his mouth so the algorithm could find it within his dark beard. Finally it worked. He could start working, but he had a niggling feeling that something was amiss.

Samii’s aggravations began to pile up on his first day on the job. He received repeated orders to collect burgers from a branch of McDonald’s that had shut down months before. Customers had no idea that Uber had neglected to delete it from its database. “I guess all the other drivers had figured out they had to reject meals from this McDonald’s, but I spent 45 minutes trying to convince Uber to remove it from their system. They said, ‘We can’t change the data in the system, but we can offer you $2 because you went there.’ I spent 20 minutes biking there and 45 minutes on the phone to them, and they gave me $2.”

…bug…meet feature

Samii struggled to accept there was no human he could speak to who was empowered to make basic changes. He had been trained as a computer scientist, and he knew how easy it would be for a developer to correct this kind of error. But his colleagues weren’t bothered. They’d found that the app’s software didn’t reward honesty or responsible behaviour. It prized speed. So he learnt to get around the algorithm by cancelling trips to that McDonald’s, just like all the other drivers.

The delivery rider who took on his faceless boss [FT] [archive.ph]

…anyway…that’s as far as I got before the clock chimed…so I’ll sling this up…but I got one more before I get to the tunes today?

These clever experiments shed light on synaesthetic links between vocal sounds and symbolic shapes that might have arisen in our ancestral past. So-called “iconic words”, which show a resemblance between form and meaning, include onomatopoeic terms such as “boom” and “splash”. They, writes archaeologist Steven Mithen in The Language Puzzle: How We Talked Our Way Out of the Stone Age, “would have obviated the need for learning [by early ancestors] because their meanings can be intuitively grasped”.

Iconic words are just one clue in the enduring mystery of how Homo sapiens came to acquire the flowing, compositional language that is so different from the grunts and screams of our closest relative, the chimpanzee. That history includes genetic mutations that changed brain shape, sparking a cognitive fluidity that facilitated the development of metaphor and abstract thought. Metaphor “enhanced communicative power, including the ability to describe and explain complex technological skills and ideas to others”, Mithen suggests.

That language-driven meeting of metaphorical minds, he argues, created spear throwers, bows and other tools — which further drove linguistic and technological change, supplemented by an evolving vocal tract and hearing apparatus. A command of fire, which extended social activities into the night, turned our ancestors into storytellers by introducing the concept of the supernatural. Somewhere along the line, our forebears added arbitrary words — those named by convention, as opposed to iconic words — to the lexicon.

In short, our ancestors moved from producing the apelike calls of Australopithecus afarensis 4mn years ago, via the iconic words of Homo erectus 2mn years ago and strings of utterances from Neanderthals 50,000 years ago, to the roughly 7,000 languages spoken today. As Mithen writes of the human past, “brain, language and material culture [have been] bootstrapping each other into modernity”.

In ‘The Language Puzzle’, archaeologist Steven Mithen explores how linguistic and evolutionary development go hand in hand, from our grunt-filled past to our garrulous present [FT] [archive.ph]

…honestly…that’s probably the one I’d recommend if you want to enjoy your sunday…now…just need a few tunes & then I best get back to making sure things are in order in case the dog & I aren’t back before everyone else this afternoon