Ethical Behavior and the Ivy League: Redefinition by Example
April 5, 2022
First, MIT and its dalliance with the sophisticated Jeffrey Epstein. Then there was Harvard and its indifference to an allegation of improper interpersonal behavior. Sordid details abound in this allegedly accurate report. Now Yale. The bastion of “the dog”, the football game, Skull and Bones, etc., etc.
“A Former Yale Employee Admits She Stole $40 Million in Electronics from the University” makes clear that auditing, resource management, and personnel supervision are not the esteemed institution greatest strengths.
I gave a talk at Yale a decade ago. The subject was Google, sparked because one of the Yale brain trust found my analysis interesting. Strange, I thought, at the time. No one else cares about my research about Google’s systems and methods. I showed up and was greeted as though I was one of the gang. (I wasn’t.)
At dinner someone asked me, “Where did you get your PhD?” I replied with my standard line: “I don’t have a PhD. I quit to take a job at Halliburton Nuclear.” As you might imagine, the others at the dinner were not impressed.
I gave my lecture and no one — absolutely none of the 100 people in the room — asked a question. No big deal. I am familiar with the impact some of my work has elicited. One investment banker big wheel threw an empty Diet Pepsi can at me after I explained how the technology of CrossZ (a non US analytics company) preceded in invention the outfit the banked just pumped millions into. Ignorance is bliss. Same at Yale during and after my lecture.
Has Yale changed? Seems to be remarkably consistent: Detached from the actions of mere humans, convinced of a particular world view, and into the zeitgeist of being of Yale.
But $40 million?
An ethical wake up call? Nope, hit the snooze button.
Stephen E Arnold, April 5, 2022
Vimeo: A Case Study in Management Desperation?
March 19, 2022
Video is expensive. Bandwidth is a killer. Even storage is a problem at scale. Then there is marketing, customer acquisition, customer retention, and paying those who deserve the big bucks. Vimeo wants to generate revenue, and it has been struggling to be upfront about its predicament: Money.
A couple of years ago, I put my DarkCyber videos on Vimeo. I was curious about the platform. I think I had a dozen or so 12 minute programs on the service. I received an email explaining that because I was a commercial customer, I had to pay a lot of money. I liked that angle crafted by 20 somethings sitting in a cramped, uncomfortable conference room figuring out who was commercial and who was not.
My criteria were:
- I was retired
- My videos contained zero advertising
- I made the programs available to those attending my lectures at FLETC, the ISS Telestrategies’ conferences, and the National Cyber Crime Conferences, among others
- I don’t sell anything any more.
The Vimeo automated system informed me that I had to pay up or have my videos deleted. I cancelled my account and deleted the videos. I mentally noted that Vimeo was floundering. Where is that life preserver? Ooops. Not near me.
I read “Vimeo Is Sorry, and Here’s How It’s Changing.” The write up dances around the central problem of Vimeo: Making money. There’s hand waving from Vimeo management. There’s information about Vimeo’s contradictory statements about “policies.” There’s information about exceptions for special people.
Enough. Vimeo is stuck. Vimeo’s management is apparently rudderless. And most important, I find the firm’s splashing around in the pool mildly amusing. Will it gulp water and drown? Will it become the new Rumble or BitChute? Will the firm’s decisive management team knock YouTube for a loop.
Splish. Splash. Vimeo is taking a bath and there is no party going on.
Stephen E Arnold, March 25, 2022
Online Gambling in Brazil: Pinga and Soccer Fun
March 8, 2022
In the 1950s, my family lived in Brazil. Our city was Campinas. At that time, it was an okay, sort of an out-of-the-way place. I recall a couple of things from my childhood. Mr. Ricci, a family friend, pointed out individuals who drank pinga at a tiny bar, took a couple of staggering steps, and leaned against a wall until the shock wave subsided. Pinga (now called cachaça or caninha) was cheap and packed an alcohol content around 38 to 48 percent. I also recall street vendors with stands papered with lottery tickets. The idea was that Brazilians really believed that a big pay day awaited the lucky gambler. Mr. Ricci, as I recall, said, “Own the lottery. Don’t play the lottery.” After watching the pinga lovers and the lottery ticket buyers, I carried away a life long aversion to alcohol and gambling. Pretty silly, right?
If a young child about 11 years old could figure out that many Brazilians liked gambling and distilled sugar cane, one would think others would too. Nope. Just do a couple of carnivals or check out the action outside the stadium when Palmeiras plays Fluminense.
I thought about my memories of Campinas as I read “Brazil’s Move to Legalize Sports Gambling Is Fueling a Digital Gold Rush.” The article states:
With the help of Eccles, the Brazilian startup followed a game plan similar to FanDuel’s and convinced regulators that fantasy gaming should be considered a game of skill, rather than luck. Now, armed with 1.6 million users in Brazil, Rei do Pitaco is ready to move into traditional sports gambling when it becomes fully regulated. [Emphasis added]
Yep, skill. Just like card counting or being James Bond at the baccarat table.
Several observations:
- Digitizing gambling puts Teflon on exploiting some people who bet on many things
- Pinga lubricates decision making for some people
- Organized operators can put a finger on the scales in some athletic contests
Net net: Digitizing lowest common denominator activities is a way for some to demonstrate skill. Sure enough.
Stephen E Arnold, March 7, 2022
Switzerland: Clean Cows and Clean Money Mostly
March 1, 2022
Here is yet another inventory of the rich and infamous. The Irish Times reports, “Vast Leak Exposes How Credit Suisse Served Strongmen and Spies.” This latest financial data leak lists 18,000 Credit Suisse accounts from the 1940s into the 2010s, though contains no data on current accounts. In keeping with the alliterative tradition established with 2016’s Panama Papers and continuing through 2017’s Paradise Papers and last year’s Pandora Papers, this roster has been dubbed Suisse Secrets. We learn:
“Among the people listed as holding amounts worth millions of dollars in Credit Suisse accounts were King Abdullah II of Jordan and the two sons of former Egyptian strongman Hosni Mubarak. Other account holders included sons of a Pakistani intelligence chief who helped funnel billions of dollars from the United States and other countries to the mujahedeen in Afghanistan in the 1980s and Venezuelan officials ensnared in a long-running corruption scandal. The leak shows that Credit Suisse opened accounts for and continued to serve not only the ultra-wealthy but also people whose problematic backgrounds would have been obvious to anyone who ran their names through a search engine. Swiss banks have long faced legal prohibitions on taking money linked to criminal activity, said Daniel Thelesklaf, the former head of Switzerland’s anti-money laundering agency. But, he said, the law generally hasn’t been enforced.”
You don’t say. Of course, Swiss banks are famous for their high security, so this leak was quite the feat. A whistleblower sent the data to German newspaper Süddeutsche Zeitung over a year ago. That paper has since then shared the list with the Organized Crime and Corruption Reporting Project and 46 other news organizations around the world. None of those outlets were based in Switzerland, however, since a 2015 Swiss law prohibits the publication of articles based on internal bank data. The article also notes:
“Among the biggest revelations is that Credit Suisse continued to do business with customers even after bank officials flagged suspicious activity involving their finances. One account holder was Venezuela’s former vice minister of energy, Nervis Villalobos. Employees in Credit Suisse’s compliance department had reason to be wary of doing business with him.”
See the write-up for more on Villalobos and other noteworthy examples, including several Middle East officials.
A Credit Suisse spokesperson notes many of the accounts date back to “a time where laws, practices and expectations of financial institutions were very different from where they are now.” Indeed. Since its founding in 1856 until fairly recently, the institution was largely untouchable. As the public’s tolerance for shady dealings has waned, however, the bank has faced more scrutiny. We are reminded that, in 2014, it pled guilty to helping Americans file false tax returns; in 2016, it forked over $5.3 billion to settle allegations about its mortgage-backed securities marketing; and last year it agreed to pay $475 million to authorities in the US and the UK over a Mozambique kickback and bribery scheme. Of course, those are small prices to pay compared to managing more than $100 billion in questionable funds. Currently, an ongoing trial in Switzerland sees Credit Suisse accused of helping drug traffickers launder millions of euros and the US Justice Department and Senate finance committee are investigating whether US citizens are still hiding millions within its hallowed vaults. What are the odds of that?
Cynthia Murrell, March 1, 2022
Misunderstanding a Zuck Move
February 4, 2022
I read some posts — for instance, “Facebook Just Had Its Most Disappointing Quarter Ever. Mark Zuckerberg’s Response Is the 1 Thing No Leader Should Ever Do” — suggesting that Mark Zuckerberg is at fault for his company’s contrarian financial performance. The Zucker move is a standard operating procedure in a high school science club. When caught with evidence of misbehavior, in my high school science club in 1958, we blamed people in the band. We knew that blaming a mere athlete would result in a difficult situation in the boys’ locker room.
Thus it is obvious that the declining growth, the rise of the Chinese surveillance video machine, and the unfriended Tim Apple are responsible for which might be termed a zuck up. If this reminds you of a phrase used to characterize other snarls like the IRS pickle, you are not thinking the way I am. A “zuck up” is a management action which enables the world to join together. Think of the disparate groups who can find fellow travelers; for example, insecure teens who need mature guidance.
I found this comment out of step with the brilliance of the lean in behavior of Mr. Zuckerberg:
Ultimately, you don’t become more relevant by pointing to your competitors and blaming them for your performance. That’s the one thing no company–or leader–should ever do.
My reasoning is that Mr. Zuckerberg is a manipulator, a helmsman, if you will. Via programmatic methods, he achieved a remarkable blend of human pliability and cash extraction. He achieved success by clever disintermediation of some of his allegedly essential aides de camp. He achieved success by acquiring competitors and hooking these third party mechanisms into the Facebook engine room. He dominated because he understood the hot buttons of Wall Street.
I expect the Zuck, like the mythical phoenix (not the wonderful city in Arizona) to rise from the ashes of what others perceive as a failure. What the Zuck will do is use the brilliant techniques of the adolescent wizards in a high school science club to show “them” who is really smart.
Not a zuck up.
Stephen E Arnold, February 4, 2022
Cloud Computing: Is There a Free Lunch Paid for by Amazon, Google, and Microsoft?
February 3, 2022
What have those cloud computing giants done for organizations lately? Here are some thought starters:
- Argued that it is better, faster, and cheaper to outsource anything involving computing to the fluffy clouds?
- Pushed for low code and no code solutions so that anyone can create applications and not get involved with expensive, unreliable, and uncooperative technical employees who don’t understand what an MBA or art history major needs now?
- Offered free or low cost entry fees which bedazzle the customer who is unable to see the telecommunications-style pricing methods like “cross a threshold and pay twice the cost stated on Schedule C, subparagraph 4”?
- A false narrative about ease of use, the reliability of pre-packaged data sets, and off-the-shelf components anyone can configure while waiting for a latte at a Starbuck’s in Normal, Illinois?
Enough questions. Read “More Than a Third of Firms Hit by Unexpected Cloud Costs.” Here’s a sentence from the write up which I found interesting:
Lack of transparency among providers is consistently cited as a problem.
Is this a nice way of saying, “These cloud people are doing the Theranos thing?”
Do you answer yes or no? Companies have difficulty hiring, retaining, and managing technology people. Costs for technology are often uncontrollable by traditional mechanisms crafted in less-illuminated times. Sales are easy because some organizations are believing what the cloud vendors say.
I am in the yes camp.
Stephen E Arnold, February 2, 2022
Synthetic Data: The Future Because Real Data Is Too Inefficient
January 28, 2022
One of the biggest problems with AI advancement is the lack of comprehensive datasets. AI algorithms use datasets to learn how to interpret and understand information. The lack of datasets has resulted in biased aka faulty algorithms. The most notorious examples are “racist” photo recognition or light sensitivity algorithms that are unable to distinguish dark skin tones. VentureBeat shares that a new niche market has sprung up: “Synthetic Data Platform Mostly AI Lands $25M.”
Mostly AI is an Austria startup that specializes in synthetic data for AI model testing and training. The company recently acquired $25 million in funding from Molten Ventures with plans to invest the funds to accelerate the industry. Mostly AI plans to hire more employees, create unbiased algorithms, and increase their presence in Europe and North America.
It is difficult for AI developers to roundup comprehensive datasets, because of privacy concerns. There is tons of data available for AI got learn from, but it might not be anonymous and it could be biased from the get go.
Mostly AI simulates real datasets by replicating the information for data value chains but removing the personal data points. The synthetic data is described as “good as the real thing” without violating privacy laws. The synthetic data algorithm works like other algorithms:
“The solution works by leveraging a state-of-the-art generative deep neural network with an in-built privacy mechanism. It learns valuable statistical patterns, structures, and variations from the original data and recreates these patterns using a population of fictional characters to give out a synthetic copy that is privacy compliant, de-biased, and just as useful as the original dataset – reflecting behaviors and patterns with up to 99% accuracy.”
Mostly AI states that their platform also accelerates the time it takes to access the datasets. They claim their technology reduces the wait time by 90%.
Demands for synthetic data are growing as the AI industry burgeons and there is a need for information to advance the technology. Efficient, acceptable error rates, objective methods: What could go wrong?
Whitney Grace, January 27, 2022
Darktrace: He Said, She Said, and Probably They Said Too
January 20, 2022
The high flying cyber security sector suffered a headache when the SolarWinds’ misstep was disclosed. Since that time, the mass media have started paying attention to what a year or two ago was the content discussed at cyber security conferences and workshops. Now, everyone including most US government agencies, hundreds of start ups, and probably a grandmother or two in a Golden Years Long Term Care facility are talking about cyber security, ransomware, bad actors, the Dark Web, the Deep Web, bots, smart malware, and the equivalent of Crime as a Service or CaaS, the on demand resource for stealing financial data.
I read “Short Seller says Darktrace Targets Are a Pipe Dream”. The back and forth between the UK financial firm and the Darktrace cyber services firm is interesting.(Keep in mind that years ago I did some small project for Autonomy, but my experience was pretty good. Nevertheless, before some research-minded 20 something tweets about my consulting, you have been alerted.)
The write up hits three interesting points. I am not interested in Darktrace, however. I think these points apply to a large number of the companies closing deals, often for Palantir-scale invoices, for threat intelligence, cyber defenses, digital canaries, smart perimeters, yada yada.
What are those points?
- Projections are extremely optimistic. What cyber security firm thinks about running out of clients for six and seven figure license fees? Hint: Think of a number between minus one and one.
- Headcounts move around, change, and are disconnected from an old school GraybaR (circa 1869) organization chart
- Customers sign on and then bail out. Does this sound like a Theranos-type observation.
The write up states:
ShadowFall says Darktrace’s business is driven by “an aggressive, promotional, sales focus” and is unlikely to stand the test of time. British hedge fund ShadowFall has taken a short position against cybersecurity specialist Darktrace, calling its business “watery-thin”. The hedge fund is known in the City as the ‘dark destroyer’ for its practices of unpicking corporate reports and devaluing shares. While the fund paints its work as a public service, as a short seller its own business model relies on driving down the prices of companies it bets against.
What’s up here? I think Darktrace is like many cyber security vendors. Consequently, ShadowFall is probably getting the curling stone close to the scoring circle in the game of full body contact investment curling. However, the specific issues like the three I identified above are part of the Silicon Valley territory. I call this phenomenon of overstatement, misdirection, and management management magical misdirection part of the behavior I described a decade ago in my monograph “The Google Legacy.”
The cyber security sector is not doing a Tom Brady grade job protecting an organization’s data. Why? Breaches occur because careless or indifferent employees click on links which invite bad actors to come in and have a seat in the engineering meeting. Bad actors prowl message boards for an unhappy employee, pay that employee to insert a USB stick into a laptop, or exfiltrate log on credentials. Finally, giant companies don’t build software with security as Job One. Every day I learn about another flaw in either commercial software or open source libraries. Bad actors don’t have to worry too much. There are quite a few bright bad actors and an expanding pool of oligarchs responding to a business opportunity.
No cyber vendor can keep up. In fact, best of class outfits are selling to those outside of the cyber security National Honor Society and Phi Beta Kappa stratum. (Example: Recorded Future to a general service outfit.) There are too few top flight cyber security engineers to staff the companies building or needing these specialists. Yep, a people shortage exists.
The net net is that ShadowFall has diagnosed an industry wide problem. The write up, however, focuses on ShadowFall’s analysis of a single company. A more useful and fair analysis would take a good, hard look at other cyber security firms. A spectrum or league table of behaviors can be generated. Then a company in the cyber security business can be put into a performance context. I understand that in the UK Darktrace is news. That’s okay with me. There is a far more significant analysis job to do. Darktrace becomes a data point, and my experience suggests there are outfits which warrant a similar analysis and commercial enterprises for which there is more data available.
Where is this type of analysis? I have not seen one. The reason may be, “Who wants to kill the gold goose laying cyber threat eggs filled with money?”
Stephen E Arnold, January 20, 2022
A Small Reminder: Finding Accurate, Actionable Information Is More Than Marketing Hoo-hah
January 14, 2022
Information retrieval ignites many interesting discussions. In our global environment, factionalism is the soup du jour. Talking about search can triggering dysphagia if a foot is consumed or apoplexy if one’s emotions go ballistic.
To keep search chatter in balance, I recommend “Scoop: IBM Tries to Sell Watson Health Again.” The write up does an non-job of romping through the craziness of IBM Watson and assorted medical windmills. There is one telling passage in the write up which I wish to highlight; to wit:
Big Blue wants out of health care, after spending billions to stake its claim, just as rival Oracle is moving big into the sector via its $28 billion bet for Cerner.
What’s up with IBM Watson in general and health care in particular? Several observations from my snowy redoubt in rural Kentucky, a state which has failed to emulate the business success of Tennessee. Is it Mitch? I don’t know.
Now my thoughts:
- Answering questions about scientific, technical, and medical questions is less demanding than figuring out what a TikTok message means. Failing in STM is like tripping over a bottle cap in a deserted NFL stadium’s parking lot
- Watson and its cognitive assertions requires training. Training is expensive. Google is working hard to convince itself and others to embrace the Snorkelesque approach. Watson’s method is a bit behind the sail boat’s curve in my opinion. Maybe the training race is over and Watson is in dry dock.
- The crazy assertions that cancer doctors could work better, faster, and more cheaply with Watson by their side resulted in one major event. The flashy Houston medical center showed Watson where the Exit door was located.
What will happen when a group of money people buy Watson? Lots of meetings, some tax planning, and quite a few telephone calls to college friends. Then a flip.
Will Watson health emerge a winner? IBM missed its chance the first time around. Perhaps the company can team with other health care competitors and craft a revenue winner. Will IBM ring up the Google? Will IBM make a trip to Redmond, home of the OS/2 debacle?
Who knows? Perhaps the company will apply some effort to fixing up its lagging cloud business? Again, who knows? Let’s ask Watson.
Stephen E Arnold, January 14, 2022
The Use Case for Digital Currency
January 12, 2022
A question I have been asked by those in my law enforcement lectures is, “What’s digital currency good for?” This question is easy to answer, and I think the officers in my sessions know the answer. The question is designed to elicit my opinion as a student of intelware. The former world chess champion Gary Kasparov says that crypto means freedom. Why? Math protects you.
Okay, but the answer I give is, “Criminal activity.”
Sure, one can gild the lily and say that digital currency offers an alternative to traditional legal tender. Digital currency is a way to work around the traditional banking system. Digital currency is a way to automate many financial transactions via smart contracts.
The reality is that digital currency solves one big problem for bad actors: Keeping otherwise noticeable financial transactions less visible to government entities and financial institutions.
What’s the factual basis for my view?
Navigate to “Crypto Crime Trends for 2022: Illicit Transaction Activity Reaches All-Time High in Value, All-Time Low in Share of All Cryptocurrency Activity.” Here’s the relevant statement:
Cryptocurrency-based crime hit a new all-time high in 2021, with illicit addresses receiving $14 billion over the course of the year, up from $7.8 billion in 2020.
The write up adds:
Cryptocurrency usage is growing faster than ever before. Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s totals. Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase was just 79% — nearly an order of magnitude lower than overall adoption — might be the biggest surprise of all.
The answer to the question, in my opinion, is, “Criminal activity.”
Stephen E Arnold, January 11, 2022
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