Quote to Note: Digital Currencies and Old School Swiss Bank Accounts
January 13, 2018
I noticed “Bitcoin Shouldn’t Become the New Swiss Bank Account: Mnuchin.” In my DarkCyber video program, I have mentioned the efforts of authorities to put a dog harness on digital currencies. Now I have a quote to note:
Dominant digital currency bitcoin should not be allowed to become the Swiss bank account of the modern era used to hide illicit activity, Treasury Secretary Steven Mnuchin said Friday.
One other factoid, assuming that the write up is accurate. Cooperative pressure on digital currencies is now a reality for fans of digital currencies. What countries are on Mr. Mnuchin’s team? The G20 countries. The list includes the European Union and others. I know this is almost 50 countries, but G20 has a bit of cachet.
That “follow the money” idea is tough for governments to shake.
Stephen E Arnold, January 13, 2018
IBM Disputes Bain Claim
January 12, 2018
I don’t read the Poughkeepsie Journal very often. However, I made a delightful exception this morning. The story “IBM Disputes Report of Redeploying Staffers” reminded me of Robert X Cringely’s The Decline and Fall of IBM and its subsequent hoo-hah. My recollection is that IBM suggested that Mr. Cringely (whom I think of as X) was off base. I am not sure he was.
The Poughkeepsie article reported:
An IBM spokesman disputed an article reporting the company plans to reassign roughly 30 percent of Global Technology Services staffers through attrition this year.
A British online publication reported that Bain was likely to help IBM on its road to recovery.
IBM, according to the Poughkeepsie source, said:
“It’s not accurate,” said Clint Roswell, spokesman for IBM’s Global Technology Services business. He did not give specifics on what information was inaccurate. “The company did not make any announcement and we don’t comment on speculation,” Roswell said. He said IBM hires “many consultants, many of whom make recommendations. It’s as simple as that.”
Okay, where did the British publication’s story originate?
Another question: If IBM hires lots of consultants, why did this particular Bain report trigger a response in the estimable Poughkeepsie newspapers?
My hunch is that a kernel of truth resides in the British report and the IBM denial.
IBM is going to have to do some fancy dancing. Whether Bain, BCG, Booz, McKinsey, or another of the blue chip consulting firms get the job of fixing IBM, the system and method will lead to the same changes I described in “IBM Watson: Fresh Out of Correct Answers?”
For those who have made it through advanced degree programs, the blue chip consulting firm charm schools, and the on the job training with Type A “experts”—the thought processes lead to:
- Reassessment of internal financial data
- Calculations to identify cost savings and money making opportunities
- Ranking of units and their people
- Reorganizations
- Sales of certain business units
- Embedding of consultants in place of existing managers
- An effort to work directly with the Board of Directors
These types of changes are ones that people working for a company rarely make without the help of outside expertise.
Maybe IBM is on its way to sustainable revenues and impressive growth dusted with healthy profits?
On the other hand, IBM admits it works with lots of advisers. One of those outfits will get the job to fix IBM. The result will be the same sequence of actions identified in the dot points above.
The third quarter earning come out during the week of January 15, 2018. Has IBM returned to its glory days? If so, forget the consultants with repair kits. On the other hand, if the numbers are not exciting, maybe the Bainies or another blue chip outfit will be able to flip on the chain saw and do what has to be done. I think I can safely assert that asking Watson will not be Job One.
Stephen E Arnold, January 12, 2018
Google: Even More Humans Needed
January 12, 2018
I read “Google Plans to Vet YouTube Premium Video Content.” The main point of the write up strikes me as:
Google told partners that it plans to use both human moderators — the company recently announced it will have 10,000 employees focused on the task — as well as artificial intelligence software to flag videos deemed inappropriate for ads.
Yep, humans. Just like the old fashioned, endangered newspaper, magazine, and commercial database companies did.
I find this amusing because the shift at Google is similar to the approach that Facebook seems to be implementing. Humans who require vacations, medical insurance, retirement plans, vacations, and management. Well, maybe not management in the go go gig approach to business.
My take on this allegedly accurate real news story is:
- The baloney about smart software is starting to become inedible even for the most ardent lovers of processed hype
- The cost controls now in place are going to be reworked which means more for fee services for formerly “free” stuff. I can envision a subscription service with regular rate increases easily.
- The predictions that 2018 will transform businesses may become true in an unexpected manner: More flawed operations plus higher costs.
Interesting stuff. Going to the museum of information production and walking off with old fashioned tools. What’s next? typewriters and some Linotype machines?
Stephen E Arnold, January 12, 2018
Will Mobile Be Microsoft Downfall in AI Field?
January 12, 2018
We are startled to see Computerworld levy such a blow to Microsoft, but here we go— see their article, “The Missing Link in Microsoft’s AI Strategy.” Writer Preston Gralla insists that the company’s weakness lies in mobile tech—and it could prove to be a real problem as Microsoft competes against the likes of Google, Apple, Facebook, and Amazon in the growing field of AI. Galla acknowledges Microsoft’s advantages here—its vast quantities of valuable data and its AI system, Cortana, already built into Windows. However, she writes:
Microsoft is missing something very big in A.I. as well: a significant mobile presence. Google and Apple, via Android and iOS, gather tremendous amounts of useful data for their A.I. work. And gathering the data is just the starting point. Hundreds of millions of people around the world use the A.I.-powered Siri, Google Assistant and Google Now on their mobile devices. So Google and Apple can continue to improve their A.I. work, based on how people use their devices. Given that the future (and to a great extent, the present) is mobile, all this means serious problems for Microsoft in A.I. A.I. is likely a big part of the reason that Microsoft kept Windows Phone on life support for so many years, spending billions of dollars while it died a slow, ugly, public death.
The article outlines a few things Microsoft has been doing to try to catch up to its rivals, like developing (little-used) versions of Cortana for iOS and Android, working with hardware makers on Cortana-powered speakers, and partnering with Amazon’s Alexa for any tasks Cortana is not quite up to (yet). Will this need to play catch-up seriously hamper Microsoft’s AI prominence? We shall see.
Cynthia Murrell, January 12, 2018
IBM Watson: Fresh Out of Correct Answers?
January 11, 2018
As a former laborer in the vineyard of a blue chip, bit time, only slightly misunderstood consulting firm, I know when a client throws in the towel.
I read allegedly accurate write up “Black & Blue: IBM Hires Bain to Cut Costs, Up Productivity.” Let’s assume that the story has the hiring of the Bainies 100 percent correct. (If you see me at one of the law enforcement and intelligence conferences at which I will be speaking in 2018, ask me about the Holiday Inn and Route 128 meetings from the late 1970s. That’s an interesting Bain anecdote in my opinion.)
The write up informed me:
IBM has indicated to senior Global Technology Services management that that a third of the global workforce will be “productively redeployed” in 2018 with tens of thousands of personnel “impacted”. Insiders told The Reg that Big Blue had hired consultant Bain & Company to help it plot a way forward for GTS, bringing in external business consultants despite spending $3.5bn to buy PWC in 2002
Interesting.
Let me share my view of what will happen:
- Hiring a big time, blue chip consulting firm will lead to upper management changes. I would not be surprised to see a Bainie become the shadow CEO of the company with other Bainies advising the Board of Directors. The reason? In order to book revenues, one moves up the food chain until the blue chip outfit is at the top of the heap and has a way to punch the cash register keys.
- Lots of people will lose their jobs. The logic is brutal. If your unit is not making money or hitting its targets, you are part of the problem. The easiest way to solve the problem is to show the underperformers the door with a friendly “find you future elsewhere, you lucky devil.”
- Divestitures will play a role in the remediation effort. If the incumbent management cannot turn a sow’s ear into a silk purse, polish it up, whip out some nifty future value diagrams, and sell what Boston Consulting folks once called “dogs.” Bain, like the Boozer, borrowed the BCG quadrant thing, and it will play a part in the Bain solutions.
- The stock price will go up. Hey, Bain is like magic dust. Those buy backs should have been used to generate new, sustainable revenue. Now with the Bainies reanalyzing the data, some Wall Street MBAs will see gold in them thar terminations, sell offs, and reorganizations.
Worth watching. If Bain is not on board, at some point another blue chip outfit will like McKinsey & Company could implement the same game plan.
In short, IBM is over. I suppose I could ask IBM Watson, but why bother? Time might be better spent trying to land a top job at Big Blue. Are you on Bain’s radar?
Stephen E Arnold, January 11, 2018
Digital Currencies: A Bit of Push Back
January 11, 2018
The Beyond Search and Dark Cyber research teams have been watching the great “avoid regulated currency” movement. Our view is that when bad actors have access to something which makes their life easier, regular folks may want to look both ways before crossing the street. We noted this article today:
South Korea Plans to Ban Crypto currency Trading, Rattles Market
Our view is that this type of nation state action will pick up steam. There are tax implications, of course. But digital currencies are almost purpose built to make authorities nervous. Toss in the benefit of mostly untraceable use of digital currencies to buy contraband, and you have a cattle prod for government entities. Once these folks get rolling, it may be difficult to slow their regulatory and enforcement momentum. Just our view from Harrod’s Creek.
Stephen E Arnold, January 11, 2018
Indian Regulators Pursue Market Manipulators Around Web
January 11, 2018
Apparently, efforts by India’s market watchdog have driven manipulators in that country to explore alternative methods of communication. So we learn from the article, “Market Manipulators Take To Dark Web, Whatsapp As Sebi Steps Up Surveillance” at India’s NDTV. Note that a “multi-bagger” is a deal promising multi-fold returns. We’re told:
Market manipulators have hooked onto dark web and private chat groups on messaging apps like WhatsApp and Telegram for sharing ‘multibagger’ stock tips and unpublished price sensitive information about listed firms. This has prompted the exchanges and the regulator to beef up the ‘whistleblower’ framework to encourage people, including investors and those working with various market intermediaries, to anonymously give a tip-off on such groups. The shift to these platforms follow an enhanced vigil by the capital markets watchdog Sebi (Securities and Exchange Board of India) and the stock exchanges on social media platforms like Facebook and Twitter, while the regulator can also seek call data records from telecom firms for its probe.
The article notes that both the National Stock Exchange of India and the Bombay Stock Exchange have tip-off systems in place and that officials are considering ways to reward whistleblowers. Both exchanges are using social media analytics to monitor for rumors and news reports about companies they have listed. They are also analyzing the last year’s worth of trade data for such companies, hoping to spot any breaches of norms. So far, Sebi has taken action against some parties for providing investment advice without a registration. The article observes that last year, Sebi suggested banning the exchange of “unauthorized trading tips” through chat apps, social media, and securities-related games and competitions; however, no such regulation has been put in place as of yet.
Cynthia Murrell, January 11, 2018
Two Senior Citizens Go Steady: IBM and British Telecom Hug in the Cloud
January 10, 2018
I read “BT Offers businesses Direct Access to IBM Cloud Services.” That sounds like an interesting idea. However, BT (the new version of British Telecom) has joined hands with Amazon’s cloud as well. See this Telecompaper item, please.
These tie ups are interesting.
When I learned of BT’s partnering, I thought of an image which I saw on a Knoxville, Tennessee, TV news program. I dug through Bing and located the story “Couple Renews Vows in Nursing Home after 70 Years of Marriage” and this image:
British Telecom open for business in maybe as far back as 1880, depending on how one interprets the history of the British post office. IBM, of course, flipped on its lights in 1911.
The idea that those with some life experience find partnering rewarding underscores the essence of humanity.
Will the going steady evolve into significant, sustainable new revenues?
Where there is a will there is a way. I am tempted to state boldly, “Let’s ask Watson.” But I think I will go with Amazon’s Alexa which will be installed in some Lexus automobiles.
But age has its virtues. A happy quack to WVLT in Knoxville. No pix of the new couple (BT and IBM) were available to me. Darn.
Stephen E Arnold, January 10, 2018
Encryption and Decryption: A Difficult Global Problem
January 10, 2018
I read “FBI’s Wray Calls for Significant Innovation’ in Accessing Encrypted Data.” The story echoed a statement which appeared in one of the technical product sheets from a company few people reading generalized online content have heard about.
The firm is Shoghi, and it is based in India. The main business of the firm is designing and licensing hardware and software for military and law enforcement use. The company can acquire data from a range of sources, including undersea cables. In the company’s description of its https intercept service, I noted this statement:
“Interception of this secure HTTPS traffic is possible at various point but it is normally not possible to achieve the decryption of the HTTPS traffic due to the secrecy algorithms used for encryption of the data.”
HTTPS poses a challenge. Encrypted hardware poses a problem. The volume of data continues to increase.
When a major lawful intercept company is quite explicit about the difference between intercept (capture) and being able to “read” the information, the problem is not confined to the US. Shoghi has as customers more than 65 countries and, it appears, each has the same problem.
Jumping back to the Fox story and Mr. Wray’s call for innovation, I want to point out that:
- The problem is not just the FBI’s; it is a problem for many authorities
- The “weakening” of the Internet is a powerful argument; however, as the fabric of security continues to fray from insider and outsider activities continues to capture headlines, the Internet has not become weak. The Internet is what it was designed to be: Robust in delivering packets and weak in terms of inherent security.
- The technical innovation referenced in the write up is what Shoghi wants its licensees to do: Figure out how to make sense of the captured data.
- The solution may reside with specialist firms which have developed technologies which perform date and time stamp analysis, clustering, digital fingerprinting of handles (user names), link analyses, and other text processing methods.
To sum up, Mr. Wray has identified a problem. Keep in mind that it is one that exists for countries other than the US. From my point of view, identifying specialists with non-intuitive ways of approaching the encryption problem warrant additional funding in the efforts to crack this “problem.”
My Dark Web Notebook team has compiled a list of companies with orthogonal approaches. We do make this information available on a fee basis. If you are interested, write benkent2020 at yahoo dot com for more information. Also, the January 23, 2018 “Dark Cyber” video includes a segment about the encryption problem for lawful intercept and surveillance vendors.
Stephen E Arnold, January 10, 2018
IBM Socrates Wins 2017 Semantic Web Challenge
January 10, 2018
We learn from the press release “Elsevier Announces the Winner of the 2017 Semantic Web Challenge,” posted at PRNewswire, that IBM has taken the top prize in the 2017 Semantic Web Challenge world cup with its AI project, Socrates. The outfit sponsoring the competition is the number one sci-tech publisher, Elsevier. We assume IBM will be happy with another Jeopardy-type win.
Knowledge graphs were the focus of this year’s challenge, and a baseline representing current progress in the field was established. The judges found that Socrates skillfully wielded natural language processing and deep learning to find and check information across multiple web sources. About this particular challenge, the write-up specifies:
This year, the SWC adjusted the annual format in order to measure and evaluate targeted and sustainable progress in this field. In 2017, competing teams were asked to perform two important knowledge engineering tasks on the web: fact extraction (knowledge graph population) [and] fact checking (knowledge graph validation). Teams were free to use any arbitrary web sources as input, and an open set of training data was provided for them to learn from. A closed dataset of facts, unknown to the teams, served as the ground truth to benchmark how well they did. The evaluation and benchmarking platform for the 2017 SWC is based on the GERBIL framework and powered by the HOBBIT project. Teams were measured on a very clear definition of precision and recall, and their performance on both tasks was tracked on a leader board. All data and systems were shared according to the FAIR principles (Findable, Accessible, Interoperable, Reusable).
The Semantic Web Challenge has been going on since 2003, organized in cooperation with the Semantic Web Science Association.
Cynthia Murrell, January 10, 2018
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