Sign Of Caution? Corporate Insiders Absent In Pre-Election Dip-Buying 

Sign Of Caution? Corporate Insiders Absent In Pre-Election Dip-Buying 

Tyler Durden

Tue, 11/03/2020 – 12:50

In August, corporate insiders unloaded their own stock as S&P500 screamed to an all-time high price, with a forward P/E multiple surpassing the dot com peak of 27x. Corporate execs, at the time, were dumping their stock into unsuspecting Robinhood traders. Months later, “Wall Street suits” as Barstool Sports’ Dave Portnoy has coined, have yet to purchase these shares back, in a meaningful way, that would ultimately suggest the market is overpriced. 

Corporate insiders, the same ones who bought the dip during the corona-crash in March, have yet to hit the big green buy button in October. As to why, well, it could be due to valuation concerns or election uncertainty. 

According to Bloomberg, citing data compiled by the Washington Service, shows only 380 corporate insiders bought shares of their own companies last month, the second-lowest rate in more than two years. While sellers also backed off, they did so at a more moderate pace than buyers. Resulting in the insider buy vs. sell ratio to slump to levels not seen since early 1Q20. 

h/t Bloomberg 

The lack of corporate insider buying comes as “large speculators” under the Commodity Futures and Exchange Commission have boosted their net positions in S&P 500 e-mini future to levels not seen since 2019. 

Malcolm Polley, president and chief investment officer at Stewart Capital Advisors LLC., said what’s troubling is that corporate execs who know their companies better than anyone else aren’t buying – this is a worrisome sign about future expectations. 

“What they’re telling you is, our stock is not cheap and may be expensive so it doesn’t make sense for us to buy the dip,” Polley told Bloomberg. “While earnings have certainly improved versus Q2, the rate of improvement going into Q4 and Q1 of next year will probably slow pretty dramatically.”

Bloomberg said corporate execs bought $74.3 million worth of shares in October, down 43% over the previous month. Selling by execs dropped 29% to $1.67 billion. 

As equity bulls continue to pile into stocks, anticipating new rounds of fiscal and monetary support, along with a “V-shaped” economic recovery, Citigroup’s Panic/Euphoria Model still shows market sentiment is in “euphoria” territory. 

 

h/t Citi

Tobias Levkovich, Citi’s chief U.S. equity strategist, said the market is still highly exposed to shocks such as earnings misses. He noted that the number of S&P 500 companies firms experiencing upgrades has likely peaked around 70%, a warning that earnings revision momentum may have slowed. 

“The crowded nature of concentrated ownership forces us to think about a kind of prisoners’ dilemma game theory, whereby we have to worry about others’ actions affecting our holdings,” Levkovich wrote in a note. “Until a couple of months ago, we had to contend with their buying activity, and the trend may be changing.”

The lack of corporate insiders purchasing their own stock is suggestive valuations are still expensive, and maybe a robust economic recovery is not around the corner. 

via ZeroHedge News https://ift.tt/3elbLgn Tyler Durden

Carbon Pricing Is a Possible Alternative to Partisan Bickering Over Climate Change

ddpphotos280742

In the closing days of a race that’s closer than expected, Sen. John Cornyn (R–Texas) has been accused of using manipulated footage to make his Democratic challenger, MJ Hegar, say that she “support[s] a carbon tax.”

In fossil fuel-rich Texas, of course, support for a tax on carbon is potentially disqualifying. Hegar’s actual position is somewhat unclear: She claims to support a carbon tax but also says she would not want it to hit middle-class families. Still, the last-minute tussle over carbon taxes in the Texas senate race is indicative of a greater problem in our national politics when it comes to fighting climate change: The politics often supersede the policy.

That’s certainly been true in this year’s presidential race.

Democratic nominee and former Vice President Joe Biden’s campaign website calls climate change “the greatest threat facing our country and our world.” He promises to invest $2 trillion dollars into infrastructure, manufacturing, and “environmental justice” to ensure that “communities who have suffered the most from pollution are first to benefit.”

Biden also plans to refit thousands of homes, even though the costs for that are significantly higher than the benefits. He pledges to reduce carbon emissions to zero, which Bjorn Lomborg, a visiting fellow at the Hoover Institution, projects would cost $5 trillion dollars. Overall, Biden’s plan would cost thousands of dollars per taxpayer every year, according to Lomborg.

Meanwhile, incumbent President Donald Trump’s environmental agenda consists primarily of hoping that climate change goes away. His campaign website describes his second-term agenda as promising to “Continue to Lead the World in Access to the Cleanest Drinking Water and Cleanest Air” and to “Partner with Other Nations to Clean Up our Planet’s Oceans”—admirable goals, sure—but does not mention climate change or outline any concrete plan for reducing carbon emissions.

Reducing carbon emissions requires recognizing that the market can do a better job than bureaucrats in Washington—but also that doing nothing isn’t a good option. Failing to act on climate change presents significant economic costs as well. According to the Congressional Research Service, even a small increase in global temperatures could lead to a 2 percent annual loss in gross domestic product, with that number increasing alongside the rate of warming.

A new study from the Niskanen Center, a centrist think tank, offers a middle ground that more politicians should be willing to consider: carbon pricing.

Joseph Majkut, director of climate policy, argues in a recently published report that carbon pricing could be an effective policy for curbing emissions while preserving markets. Under Majkut’s proposal, the federal government would price carbon at $50 per ton, and return that revenue to taxpayers. This would create a market incentive for corporations to implement clean energy plans. It would discourage investment in fossil fuels, and likely encourage firms to start the process of moving toward clean energy sources. But it wouldn’t cost trillions of dollars, nor would it absolutely destroy the American economy. There would be costs, just as with any tax—but not to the degree that Biden’s plan would entail.

It would not, Majkut notes, “entirely fix underinvestment in scientific research” nor “eliminate the cost premium and limited selection facing prospective buyers of electric vehicles.” But, he argues, it is a valuable first step that would still meaningfully contribute to working against climate change.

Corporate decarbonization can only come from regulatory predictability, and “regulatory predictability and market certainty come from a carbon price, not from continually changing command-and-control measures,” Majkut writes. It’s a plan that has support from stakeholders in the fossil fuels industry, including energy companies like ExxonMobil and BP, as well as automakers like General Motors and Ford.

The support by the energy sector for carbon pricing has led to some pushing back against it. According to Bloomberg, the projected $40-50 price for carbon may be too low to actually trigger changes in the marketplace. Bloomberg notes that climate activist groups like the Natural Resources Defense Council argue that carbon pricing would effectively price out coal, but would boost the market for natural gas.

Carbon pricing is a plan that relies on letting market mechanisms sort out the costs of pollution that affect the climate. Unfortunately, implementing it would be tough as it would require our politicians to admit they don’t have all the answers.

from Latest – Reason.com https://ift.tt/2U3e9z7
via IFTTT

Inflation Is Not A Social Policy

Inflation Is Not A Social Policy

Tyler Durden

Tue, 11/03/2020 – 12:30

Authored by Daniel Lacalle,

Central banks continue to be obsessed with inflation. Current monetary policy is like the behaviour of a reckless driver running at 200 miles per hour, looking at the rear-view mirror and thinking “we have not crashed yet, let’s accelerate”.

Central banks believe that there is no risk in current monetary policy based on two wrong ideas: 1) That there is no inflation, according to them, and 2) that benefits outstrip risks.

The idea that there is no inflation is untrue. There is plenty inflation in the goods and services that consumers really demand and use. Official CPI (consumer price index) is artificially kept low by oil, tourism and technology, disguising rises in healthcare, rent and housing, education, insurance and fresh food that are significantly higher than nominal wages and official CPI indicates. Furthermore, in countries with aggressive taxation of energy, the negative impact on CPI of oil and gas prices is not seen at all in consumers’ real electricity and gas bills.

A recent study by Alberto Cavallo shows how official inflation is not reflecting the changes in consumption patterns, and concludes that real inflation is more than double the official level in the Covid-19-era average basket and also, according to an article by James Mackintosh in the Wall Street Journal, prices are rising to up to three times the rate of official CPI for things people need in the pandemic, even if the overall inflation number remains subdued. Official statistics assume a basket that comes down due to replicable goods and services that we purchase from time to time. As such, technology, hospitality, and leisure prices fall, but things we acquire on a daily basis and that we cannot simply stop buying are rising much faster than nominal and real wages.

Central banks will often say that these price increases are not due to monetary policy, but market forces. However, it is precisely monetary policy what strains market forces by pushing rates lower and money supply higher. Monetary policy makes it harder for the least privileged to live day by day and increasingly difficult for the middle class to save and purchase assets that rise due to expansionary monetary policies, such as houses and bonds.

Inflation may not show up on news headlines, but consumers feel it. The genera public has seen a constant increase in the price of education, healthcare, insurance and utility services in a period where central banks felt obliged to “combat deflation”… A delationary risk that no consumer has seen, least of all the lower and middle classes.

It is not a coincidence that the European Central Bank constantly worries about low inflation while protests on the rising cost of living spread all around the Eurozone. Official inflation measures are simply not reflecting the difficulties and loss of purchasing power of salaries and savings of the middle class.

Therefore inflationary policies do create a double risk.

  • First, a dramatic increase in inequality as the poor are left behind from the asset price increases and wealth effect but feel the rise in core goods and services more than anyone.

  • Second, because it is untrue that salaries will increase alongside inflation. We have seen real wages stagnate due to poor productivity growth and overcapacity while unemployment rates were low, keeping wages significantly below the rise of essential services.

Central banks should also be concerned about the rising dependence of bond and equity markets on the next liquidity injection and rate cut. If I was the chairperson of a central bank I would be truly concerned if markets reacted aggressively on my announcements. It would be a worrying signal of co-dependence and risk of bubbles. When sovereign states with massive deficits and weakening finances have the lowest bond yields in history it is not a success of the central bank, it is a failure.

Inflation is not a social policy. It disproportionately benefits the first recipient of newly created money, government and asset-heavy sectors, and harms the purchasing power of salaries and savings of the low and middle class. “Expansionary” monetary policy is a massive transfer of wealth from savers to borrowers. Furthermore, these evident negative side effects are not solved by the so-called “quantitative easing for the people”. A bad monetary policy is not solved by a worse one. Injecting liquidity directly to finance government entitlement programs and spending is the recipe for stagnation and poverty. It is not a coincidence that those that have implemented the recommendations of Modern Monetary Policy wholeheartedly, Argentina, Turkey, Iran, Venezuela and others, have seen increases in poverty, weaker growth, worse real wages and destruction of the currency.

Believing that prices must rise at any cost because, if not, consumers may postpone their purchasing decisions is generally ridiculous in the vast majority of purchasing decisions. It is blatantly false in a pandemic crisis. The fact that prices are rising in a pandemic crisis is not a success it is a miserable failure and hurts every consumer that has seen revenues collapse by 10 or 20%.

Central banks need to start thinking about the negative consequences of the massive bond bubble they have created and the rising cost of living for the low and middle classes before it is too late. Many will say that it will never happen, but acting on that belief is exactly the same as the example I gave at the beginning of the article: “We haven´t crashed yet, let´s accelerate”. Reckless and dangerous.

Inflation is not a social policy. It is daylight robbery.

via ZeroHedge News https://ift.tt/361tHIV Tyler Durden

“Oops: What If He Does It Again”: Here Is The Best Hedge Trade For A “Surprise” Trump Victory

“Oops: What If He Does It Again”: Here Is The Best Hedge Trade For A “Surprise” Trump Victory

Tyler Durden

Tue, 11/03/2020 – 12:10

If one goes by the official polls, one would conclude that a Biden victory is in the bag: according to RCP, Biden is a 7 point favorite, while Nate Silver has Biden’s winning odds at 89.2%. Of course, as 2016 showed, the polling process has become completely discredited and served more to reflect the biases of the poll creator than anything else.

So while Trump’s path to victory looks narrow, SocGen’s FX strategist Jason Daw asks “what if the unthinkable happens and he pulls it off again?” and suggests a trade to hedge said “unthinkable” event.

According to Daw, while there is still confusion within equities, “the currency market has nearly fully priced in a Biden win.” Specifically, as Biden has maintained a sizeable lead in the national polls over past four months, the Russian ruble has been one of the weakest currencies in EM, while the Mexican peso and North Asian currency bloc are amongst the strongest, with Daw suggesting that “geopolitical undertones are at least partially responsible for this price action” to wit:

The conventional wisdom is that under Biden, the US administration is likely to mend relationships with traditional allies, be harder on Russia than the Republicans, but take a more traditional and diplomatic approach to China even though the acrimonious core of the trade and tech disputes will remain intact.

Well, if the ruble and peso have fully priced in a Biden victory, obviously the trade here is to do the opposite, and as the SocGen strategist writes, “short MXN-RUB, short CNH-RUB, and short USD-RUB are potential candidates to reverse recent price action.” He adds that in response to the election results, there could be a clear asymmetry in how these currencies behave: “a surprise Trump win could see a sharp reversal of recent trends, whereas there would probably be a muted response in a Biden win (even in a Democrat sweep).”

A look at fundamentals also bolsters this trade reco: as Daw explains, short USD-RUB offers attractive risk-reward. Based on relative macro considerations (Mexico’s elevated inflation and market reducing rate cut expectations; China growth resilience and strong portfolio flows), short USD-RUB could offer the best risk-reward in a Trump victory. Finally, “solild” Russian fundamentals when coupled with the removal of geopolitical risk premium would suggest at the current oil prices USD-RUB should be trading closer to 72.

Finally, how to put the trade on to reap the most benefits from a favorable outcome?

While one can simply put on a short USDRUB trade in the spot market, SocGen’s preferred trade is a knock out option in the form of a 3m USD-RUB put strike ATMS, KO at 78.5. Here are the details:

  • Volatility, skew, and convexity are near the upper end of the three-year range (aside from the period surrounding COVID-induced market stress).
  • With the set-up in volatility, a constructive stance on oil ($50/bbl a year from now ) and Russian currency fundamentals , an up-and-out put option (indicative price (Bloomberg): 1.68%) is an attractive risk-constrained and cost effective structure to position for a lower USD-RUB.
  • Adding a topside knock-out feature at 78.5 reduces the cost by 40% compared to a vanilla 3m USD-RUB put strike ATMS.
  • Maximum loss on the trade limited to the premium paid.

via ZeroHedge News https://ift.tt/3epi42d Tyler Durden

Cambridge Analytica, the Election Interference Operation That Wasn’t

bannon-upiphotostwo757396

It’s common to view President Donald Trump’s first term as a tragedy, a national meltdown in which democracy itself is under siege from big tech, foreign governments, and other shadowy actors. 

But just as often, it has been a vehicle for farce—and few episodes encapsulate the era’s absurdity and panicky self-regard more than the supposed scandal surrounding social media data mining firm Cambridge Analytica.  

The details surrounding the firm’s political involvement are convoluted and multitudinous, but the essence of the allegation was that the firm, which worked under various guises in both the United States and in Britain, was a shadowy operation that used improperly harvested social media data to create psychographic voter profiles that may have helped Trump win the 2016 election, swung the Brexit vote toward British independence, and given foreign rivals (especially Russia) a potent tool for sowing chaos in the Democratic Party via Facebook. The story generated massive amounts of news coverage from major organs of the mainstream press, which in turn resulted in congressional hearings and high-profile government inquiries in both the U.S. and the U.K. 

The story, in other words, was a perfect storm of Trump-era panics and paranoias. And it was almost entirely hokum.  

For an idea of the sort of media and politics firestorm that Cambridge Analytica’s work produced, it’s worth looking back to early 2018, when The New York Times reported that the company had engaged in a nefarious bit of business: After receiving some $15 million from Robert Mercer, a wealthy conservative donor who backed organizations such as Breitbart News, the company “wooed [Mercer’s] political adviser, Stephen K. Bannon, with the promise of tools that could identify the personalities of American voters and influence their behavior.” 

To do that, it needed massive amounts of data. And so, the story went, it turned to Facebook. Cambridge Analytica harvested private information from the Facebook profiles of more than 50 million users without their permission,” by paying for a data trove from an independent researcher. The result, the Times reported, was “one of the largest data leaks in the social network’s history.”

The company had vague links to the Russian oil business, and the Facebook user data in question had been obtained from Aleksandr Kogan, an academic who, The Guardian found, had “unreported ties to a Russian university.” In a rhetorical flourish typical of the sort of coverage Cambridge Analytica sparked, the Guardian‘s report described the voter profiles as a “project to turn tens of millions of Facebook profiles into a unique political weapon” and noted that revelations of Kogan’s Russia ties came “at a time of intense US scrutiny of Russian meddling in the 2016 US presidential election.”

All of this carried ominous implications not just for Cambridge Analytica, but for Facebook, the source of the user data that allowed the company to create the voter-profiling tool. A New York Times item from March 2018 carried the headline, “Facebook’s Role in Data Misuse Sets off Storms on Two Continents.” The Massachusetts attorney general launched an investigation into the social media giant. Lawmakers such as Sens. Amy Klobuchar (D–Minn.) and Richard Blumenthal (D–Conn.) called for Facebook CEO Mark Zuckerberg to appear before Congress. In Britain, members of Parliament made similar calls.  

All the while, the threat of Russian interference into American elections was in the air, even if the direct connections remained murky. As the Times reported: “The two top Congressional Democrats leading inquiries into Russian interference in the 2016 election—Senator Mark Warner of Virginia and Representative Adam Schiff of California—called for investigations of the Facebook data leak. ‘This raises serious questions about the level of detail that Cambridge Analytica knew about users,’ said Mr. Schiff, who is the ranking Democrat on the House intelligence committee.”

The calls for political oversight, the Times noted, followed multiple reports that the company “had used the Facebook data to develop methods that it claimed could identify the personalities of individual American voters and influence their behavior” and noted that “the firm’s so-called psychographic modeling underpinned its work for the Trump campaign in 2016,” even if some were skeptical of its efficacy. 

The media had uncovered a juicy scandal at the intersection of politics and social media. And Washington and London had taken notice. 

Eventually, Zuckerberg testified before a Senate committee, his first appearance before Congress. But instead of a serious inquiry, it turned out more like a circus. Over the course of the hearing, it became clear that most of the senators grilling the tech CEO had no idea how Facebook—or, for that matter, much of the internet—worked at all. They asked clueless questions that could have been answered with a Google search and mostly served to demonstrate how little they understood about the privacy practices they wanted to regulate. But as Reason‘s Robby Soave noted at the time, that didn’t stop at least one from taking the opportunity to attempt to connect Facebook to Russian propaganda efforts, by demanding that Zuckerberg account for context-free print-outs of what appeared to be images taken from Facebook. 

Yet it hardly mattered that the legislators who’d gathered to demand answers from Zuckerberg had no idea what they were talking about: They were determined to bring Facebook under their control. “If Facebook and other online companies will not or cannot fix their privacy invasions, then we are going to have to,” Sen. Bill Nelson (D–Fla.) said at the time. “We, the Congress.” 

Zuckerberg has since become a fixture in Washington; he made his fifth appearance last week. These appearances have become ritualized performances for both the CEOs and the lawmakers who question them, forums for prepared speeches with conclusions baked in. No one learns much from these faux public trials, but the march to regulation continues apace, often abetted by Facebook, which has taken to saying that some regulation might be necessary, as long as the company gets to help write the rules. The Cambridge Analytica scandal, which The New York Times once described as having “thrust Facebook into its biggest crisis ever,” had evolved into an all-encompassing, never-ending entanglement amongst America’s axis of cultural and political power: big tech, big media, and big government.  

Yet just a few weeks before Zuckerberg’s latest, we actually did learn something from a government investigation into the intersection of politics and technology. In early October, the U.K. Information Commissioner’s Office (ICO), a government body that oversees data privacy, finished a yearslong review of the incident that started it all: the Cambridge Analytica scandal. U.K. data privacy laws tend to be more strict than in the U.S., and the ICO has the power to penalize companies and otherwise compel them to take action; it is not inherently sympathetic to corporate interests.

And yet what it found was that the Cambridge Analytica scandal, such that it was, had been blown wildly out of proportion, and had mostly been the result of misunderstandings and hype. 

The dreaded psychographic models they built relied on commonly used, off-the-shelf analytical tools that company leadership had talked up in order to make them sound more powerful than they were. Aside from some minor inquiries, the ICO found no evidence that Cambridge Analytica was involved in the Brexit campaign, nor did they find significant evidence of Russian involvement. The company did maintain lax data security in some instances, with some staffers keeping information in their personal Gmail accounts—although often it was shared through more secure methods as well. 

And the Facebook data trove at the heart of the controversy was largely deleted in 2016 after Facebook requested that Cambridge Analytica do so. The data itself was not directly used in its 2016 election campaign efforts, although it may have indirectly informed some of the company’s models. 

The ICO found the company guilty of no illegal behavior. Instead, the report found that Cambridge Analytica was primarily guilty of hype—of overselling its analytical capabilities and the value of its psychographic models and their ability to shape political campaigns. The company’s leader, Alexander Nix, had been suspended in 2018 after an undercover video caught him suggesting that bribery and seduction could be used to influence foreign elections; he’d called Cambridge Analytica’s voter models their “secret sauce.” But as the Financial Times points out, the depth and detail of the company’s vaunted voter profiles had been heavily exaggerated. And the company’s employees knew what they were selling was bunk: As the ICO report dryly notes, “There appeared to be concern internally about the external messaging when set against the reality of their processing.” 

Cambridge Analytica wasn’t a sinister new way to use social media as mind control. It wasn’t a Russian intelligence front group. It wasn’t a powerful tool for subverting democracy. It was a scam, run by a shady frontman with a penchant for promotional self-aggrandizement. And it fooled just about everyone, from the right-wing power brokers who funded it to the journalists who covered it to the bumbling politicians who used the scandal as an excuse to wage a political prosecution of some of the nation’s largest and most successful companies. 

The Cambridge Analytica story is, at heart, a story of confusion and self-delusion, in which media paranoia and political misunderstandings intersect with right-wing pomposity and empty tech-world hype and hubris. 

The real story wasn’t what happened with the company’s vaunted models; it was what so many influential figures on every side of the issue thought was happening that wasn’t. What many viewed as apocalyptic was in fact ordinary—a confluence of vanities, paranoias, and misunderstandings rather than an elaborate master plan. And if the latest big tech hearing is any indication, these sorts of misunderstandings are going to keep happening, regardless of how the election turns out.

The Cambridge Analytica “scandal,” then, is a synecdoche for so much of the Trump era, and the way that mostly unfounded anxieties about elections, technology, and secretive corporate plots have spread across the corridors of American power and cultural influence. In the end, Cambridge Analytica’s systems didn’t amount to much. They didn’t represent what so many powerful people thought they represented. And the tragedy wasn’t what so many thought it was; it was what we failed to learn, and the mistakes we are likely to keep repeating as a result.

from Latest – Reason.com https://ift.tt/32b4UkK
via IFTTT

UK Raises Terror Alert Level To “Severe”, Meaning Attack “Highly Likely”

UK Raises Terror Alert Level To “Severe”, Meaning Attack “Highly Likely”

Tyler Durden

Tue, 11/03/2020 – 11:50

Days after imposing a one-month (at a minimum) lockdown, the UK is raising its terror alert level to “severe” (from “substantial”), meaning an attack is “highly likely” following Monday’s attack in Vienna, and the attacks last month across France.

Another suspect in last night’s attack was arrested in Linz, the capital of Upper Austria, just this morning, and Austrian officials have been suspiciously mum on the number of assailants who managed to escape the scene last night (one attacker was killed, at least 2 have been arrested). The death toll in yesterday’s shooting has climbed to 4.

Three people were killed in a knife attack in Nice, one of several attacks that unfolded last month, which prompted French President Emmanuel Macron to declare a crackdown on Islamic terror.

Assessments of threat levels are taken by the Joint Terrorism Analysis Center, which is part of MI5. They include:

  • Low – an attack is highly unlikely
  • Moderate – an attack is possible but not likely
  • Substantial – an attack is likely
  • Severe – an attack is highly likely
  • Critical – an attack is highly likely in the near future

To be sure, Wales’ two-week firebreak lockdown is nearing its end, but England’s lockdown is just beginning. People are already terrified  enough by the resurgence of the coronavirus across the continent. The British terror level was finally lowered to substantial in November 2019 from severe for the first time in 5 years. Severe is the second-highest level, with only “critical” above it.

Though an attack is now deemed “likely”, the alert doesn’t offer any advice other than for Britons to remain ‘alert’.

Home Secretary Priti Patel described the move as a “precautionary measure” and said it was “not based on any specific threat”.

“The public should continue to remain vigilant and report any suspicious activity to the police,” she said.

But the alert is bound to cast a distinctly Orwellian pall over life in the UK, as fear, surveillance, violence and death become the backdrop to ordinary life.

via ZeroHedge News https://ift.tt/34QRfRE Tyler Durden

Don’t forget to vote for yourself

The year 63 BC was an election year in ancient Rome, and an ambitious 37-year old was locked in a heated race for one of Rome’s most powerful offices: pontifex maximus.

The young politician, of course, was Julius Caesar. And he ran a cutthroat campaign against his opponents– two seasoned senators, both of whom Caesar publicly accused of corruption.

Caesar reputedly spent so much money on his campaign that, on election morning, he told his mother that he would either win, or he would have to leave Rome forever to flee his angry creditors.

The Romans didn’t invent elections; there’s evidence of voting that goes back nearly 1,000 years before Rome, to civilizations in ancient India and Mesopotamia.

And the Greeks, of course, developed the concept of democratic elections more than any other ancient culture.

(The Greeks even held ‘negative elections’ where they would vote on which former politicians should be banished for corruption and incompetence.)

But the Romans elevated elections to a full blown commercial enterprise. They were willing to spend big to win– a practice that continues to this day.

The Center for Responsive Politics recently estimated that the 2020 US Presidential election will cost a record $6.6 billion. That’s nearly THREE TIMES as much as the $2.3 billion spent in the 2016 campaign.

It’s not just the Presidency either. Even a ‘lowly’ Congressional seat costs big money these days, with a whopping $7.25 billion spent in the 2020 election. That’s double the amount from 10 years ago.

But the real cost of elections goes far beyond dollars and cents.

The biggest example is the emotional cost; I’m not sure many of us have ever witnessed such drama to the extent that has unfolded in this election.

The constant shouting and screaming, the media and celebrity shrieking, the Twitter rage… it never stops.

Countless people get behind their candidates as if their lives depend on it, with utter devotion and euphoria for their chosen one, and unmitigated hatred for the opposing side.

Things have become so crazy that couples even break up over politics.

A recent study by Wakefield Research found that 11% of couples in the United States have split up over political differences. And among Millennials, that number rises to 22%.

I find it remarkable that we allow extreme emotions for politicians (who we’ll most likely never meet) to cause a breakdown in relationships with some of the actual people who are in our daily lives.

These extreme emotions will be felt even more acutely today, and in the coming days (or weeks) as the results are announced.

Grown adults are going to break down and cry as if their dog just died. Others will hoot and cheer like they’ve just won the lottery.

And this happens every time. Every few years it’s the same cycle… the same drama. We’re told every single time that ‘this is the most important election of our lives.’

Naturally there’s an entire industry counting on us being emotional. The media sells more ads, the politicians get more votes. Billions of dollars at stake depend on us being in a total frenzy.

Look, I’m not being dismissive about elections. Obviously the people who come to power can and do have enormous influence on our lives.

They can wreck havoc and destruction, even when they’re well-meaning.

They can burden future generations with ever-increasing debts, debase the currency, regulate entrepreneurs out of business, embolden extremists, tax people’s prosperity away, and all sorts of other terrible things.

So, yes, to a degree, it’s always important.

But in the midst of all this drama is a central theme that’s almost always lost.

People tend to forget that WE have a much bigger impact on our own lives than any politicians or government.

Elections deceive us into pinning all the hopes and dreams for our future on some political candidate, like he or she is going to walk across the water and sprinkle prosperity everywhere.

But this is an absurd fantasy.

What we do matters far more– the plans we make, the actions we take, the things we do to improve our own lives.

This is like voting for yourself. And we have the opportunity to do this every single day.

Source

from Sovereign Man https://ift.tt/2I0GrYu
via IFTTT

Cambridge Analytica, the Election Interference Operation That Wasn’t

bannon-upiphotostwo757396

It’s common to view President Donald Trump’s first term as a tragedy, a national meltdown in which democracy itself is under siege from big tech, foreign governments, and other shadowy actors. 

But just as often, it has been a vehicle for farce—and few episodes encapsulate the era’s absurdity and panicky self-regard more than the supposed scandal surrounding social media data mining firm Cambridge Analytica.  

The details surrounding the firm’s political involvement are convoluted and multitudinous, but the essence of the allegation was that the firm, which worked under various guises in both the United States and in Britain, was a shadowy operation that used improperly harvested social media data to create psychographic voter profiles that may have helped Trump win the 2016 election, swung the Brexit vote toward British independence, and given foreign rivals (especially Russia) a potent tool for sowing chaos in the Democratic Party via Facebook. The story generated massive amounts of news coverage from major organs of the mainstream press, which in turn resulted in congressional hearings and high-profile government inquiries in both the U.S. and the U.K. 

The story, in other words, was a perfect storm of Trump-era panics and paranoias. And it was almost entirely hokum.  

For an idea of the sort of media and politics firestorm that Cambridge Analytica’s work produced, it’s worth looking back to early 2018, when The New York Times reported that the company had engaged in a nefarious bit of business: After receiving some $15 million from Robert Mercer, a wealthy conservative donor who backed organizations such as Breitbart News, the company “wooed [Mercer’s] political adviser, Stephen K. Bannon, with the promise of tools that could identify the personalities of American voters and influence their behavior.” 

To do that, it needed massive amounts of data. And so, the story went, it turned to Facebook. Cambridge Analytica harvested private information from the Facebook profiles of more than 50 million users without their permission,” by paying for a data trove from an independent researcher. The result, the Times reported, was “one of the largest data leaks in the social network’s history.”

The company had vague links to the Russian oil business, and the Facebook user data in question had been obtained from Aleksandr Kogan, an academic who, The Guardian found, had “unreported ties to a Russian university.” In a rhetorical flourish typical of the sort of coverage Cambridge Analytica sparked, the Guardian‘s report described the voter profiles as a “project to turn tens of millions of Facebook profiles into a unique political weapon” and noted that revelations of Kogan’s Russia ties came “at a time of intense US scrutiny of Russian meddling in the 2016 US presidential election.”

All of this carried ominous implications not just for Cambridge Analytica, but for Facebook, the source of the user data that allowed the company to create the voter-profiling tool. A New York Times item from March 2018 carried the headline, “Facebook’s Role in Data Misuse Sets off Storms on Two Continents.” The Massachusetts attorney general launched an investigation into the social media giant. Lawmakers such as Sens. Amy Klobuchar (D–Minn.) and Richard Blumenthal (D–Conn.) called for Facebook CEO Mark Zuckerberg to appear before Congress. In Britain, members of Parliament made similar calls.  

All the while, the threat of Russian interference into American elections was in the air, even if the direct connections remained murky. As the Times reported: “The two top Congressional Democrats leading inquiries into Russian interference in the 2016 election—Senator Mark Warner of Virginia and Representative Adam Schiff of California—called for investigations of the Facebook data leak. ‘This raises serious questions about the level of detail that Cambridge Analytica knew about users,’ said Mr. Schiff, who is the ranking Democrat on the House intelligence committee.”

The calls for political oversight, the Times noted, followed multiple reports that the company “had used the Facebook data to develop methods that it claimed could identify the personalities of individual American voters and influence their behavior” and noted that “the firm’s so-called psychographic modeling underpinned its work for the Trump campaign in 2016,” even if some were skeptical of its efficacy. 

The media had uncovered a juicy scandal at the intersection of politics and social media. And Washington and London had taken notice. 

Eventually, Zuckerberg testified before a Senate committee, his first appearance before Congress. But instead of a serious inquiry, it turned out more like a circus. Over the course of the hearing, it became clear that most of the senators grilling the tech CEO had no idea how Facebook—or, for that matter, much of the internet—worked at all. They asked clueless questions that could have been answered with a Google search and mostly served to demonstrate how little they understood about the privacy practices they wanted to regulate. But as Reason‘s Robby Soave noted at the time, that didn’t stop at least one from taking the opportunity to attempt to connect Facebook to Russian propaganda efforts, by demanding that Zuckerberg account for context-free print-outs of what appeared to be images taken from Facebook. 

Yet it hardly mattered that the legislators who’d gathered to demand answers from Zuckerberg had no idea what they were talking about: They were determined to bring Facebook under their control. “If Facebook and other online companies will not or cannot fix their privacy invasions, then we are going to have to,” Sen. Bill Nelson (D–Fla.) said at the time. “We, the Congress.” 

Zuckerberg has since become a fixture in Washington; he made his fifth appearance last week. These appearances have become ritualized performances for both the CEOs and the lawmakers who question them, forums for prepared speeches with conclusions baked in. No one learns much from these faux public trials, but the march to regulation continues apace, often abetted by Facebook, which has taken to saying that some regulation might be necessary, as long as the company gets to help write the rules. The Cambridge Analytica scandal, which The New York Times once described as having “thrust Facebook into its biggest crisis ever,” had evolved into an all-encompassing, never-ending entanglement amongst America’s axis of cultural and political power: big tech, big media, and big government.  

Yet just a few weeks before Zuckerberg’s latest, we actually did learn something from a government investigation into the intersection of politics and technology. In early October, the U.K. Information Commissioner’s Office (ICO), a government body that oversees data privacy, finished a yearslong review of the incident that started it all: the Cambridge Analytica scandal. U.K. data privacy laws tend to be more strict than in the U.S., and the ICO has the power to penalize companies and otherwise compel them to take action; it is not inherently sympathetic to corporate interests.

And yet what it found was that the Cambridge Analytica scandal, such that it was, had been blown wildly out of proportion, and had mostly been the result of misunderstandings and hype. 

The dreaded psychographic models they built relied on commonly used, off-the-shelf analytical tools that company leadership had talked up in order to make them sound more powerful than they were. Aside from some minor inquiries, the ICO found no evidence that Cambridge Analytica was involved in the Brexit campaign, nor did they find significant evidence of Russian involvement. The company did maintain lax data security in some instances, with some staffers keeping information in their personal Gmail accounts—although often it was shared through more secure methods as well. 

And the Facebook data trove at the heart of the controversy was largely deleted in 2016 after Facebook requested that Cambridge Analytica do so. The data itself was not directly used in its 2016 election campaign efforts, although it may have indirectly informed some of the company’s models. 

The ICO found the company guilty of no illegal behavior. Instead, the report found that Cambridge Analytica was primarily guilty of hype—of overselling its analytical capabilities and the value of its psychographic models and their ability to shape political campaigns. The company’s leader, Alexander Nix, had been suspended in 2018 after an undercover video caught him suggesting that bribery and seduction could be used to influence foreign elections; he’d called Cambridge Analytica’s voter models their “secret sauce.” But as the Financial Times points out, the depth and detail of the company’s vaunted voter profiles had been heavily exaggerated. And the company’s employees knew what they were selling was bunk: As the ICO report dryly notes, “There appeared to be concern internally about the external messaging when set against the reality of their processing.” 

Cambridge Analytica wasn’t a sinister new way to use social media as mind control. It wasn’t a Russian intelligence front group. It wasn’t a powerful tool for subverting democracy. It was a scam, run by a shady frontman with a penchant for promotional self-aggrandizement. And it fooled just about everyone, from the right-wing power brokers who funded it to the journalists who covered it to the bumbling politicians who used the scandal as an excuse to wage a political prosecution of some of the nation’s largest and most successful companies. 

The Cambridge Analytica story is, at heart, a story of confusion and self-delusion, in which media paranoia and political misunderstandings intersect with right-wing pomposity and empty tech-world hype and hubris. 

The real story wasn’t what happened with the company’s vaunted models; it was what so many influential figures on every side of the issue thought was happening that wasn’t. What many viewed as apocalyptic was in fact ordinary—a confluence of vanities, paranoias, and misunderstandings rather than an elaborate master plan. And if the latest big tech hearing is any indication, these sorts of misunderstandings are going to keep happening, regardless of how the election turns out.

The Cambridge Analytica “scandal,” then, is a synecdoche for so much of the Trump era, and the way that mostly unfounded anxieties about elections, technology, and secretive corporate plots have spread across the corridors of American power and cultural influence. In the end, Cambridge Analytica’s systems didn’t amount to much. They didn’t represent what so many powerful people thought they represented. And the tragedy wasn’t what so many thought it was; it was what we failed to learn, and the mistakes we are likely to keep repeating as a result.

from Latest – Reason.com https://ift.tt/32b4UkK
via IFTTT