Boris Johnson, hedge-funds, conspiracy theories and Brexit

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Last Saturday the former Chancellor of the Exchequer, Philip Hammond, claimed that Boris Johnson was pursuing the interests of financial backers who are set to gain from a no-deal Brexit. Hammond said he was only repeating a comment made by Rachel Johnson, the Prime Minister’s sister. Since some of Johnson’s financial backers run hedge-funds, this sounded like a good conspiracy theory. Indeed Robert Harris, the best-selling thriller writer, tweeted that the claim that Johnson wanted a hard Brexit so that his backers in the City wouldn’t lose billions alleged “corruption on a scale I wouldn’t dare put in fiction”.

Frances Coppola, writing for Forbes, isn’t impressed by this particular conspiracy theory. “To be sure”, she writes,

some hedge fund managers make no secret of their desire for no-deal Brexit. Crispin Odey, for example, not only backed Johnson for Prime Minister but – according to a recent Channel 4 documentary – also advised him to suspend (“prorogue”) Parliament to force through no-deal Brexit. Johnson’s attempt to follow Odey’s advice ended ignominiously when the U.K.’s highest court ruled it unlawful.

Coppola’s point seems to be that most of the journalists covering this particular story doen’t seem to know much about how hedge-funds work. It is possible to profit from no-deal Brexit even if you don’t support it. “Shorting the pound”, she writes, “would be a no-brainer for anyone in the hedge fund fraternity, however pristine their Remain credentials.”

The conspiracy theory suggests that as October 31 approaches with no sign of a deal, hedge-funds might short the pound whether or not they backed Johnson’s campaign.

But that’s not what is being alleged by those who claim that speculators are placing billions of pounds of bets on no-deal Brexit. No, the focus is on equities. According to The Sunday Times, hedge funds like Odey are shorting British companies in expectation of a stock market crash if the U.K. leaves the EU without a deal. Allegedly, Odey has placed £300m ($370m) of bets against a variety of U.K. companies.

Investigating the list of his 14 currently active shorts, Coppola thinks that they are standard hedge-fund operations — betting against companies that are in trouble for reasons that have little or nothing to do with Brexit. “In short”, she concludes,

In short, despite his vocal support for no-deal Brexit, I don’t see any evidence that Odey’s funds are shorting U.K. companies in anticipation of no-deal Brexit. If I were to criticize Odey for anything, it would be for high fees and an uninspiring performance.

Nice piece of debunking. And of good journalism. And I wouldn’t put it past Robert to use the plot in one of his next books!

Dining with Stalin

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One of the glories of the blogosphere is its infinite variety. The economist Branko Milanovic has a fascinating post on his blog after he discovered an obscure book (probably based on an academic dissertation) in a secondhand bookstore in St Petersburg. The book is a detailed (400-page) account of 47 banquets that Stalin hosted between 1935 and 1949. The banquets, hosted in various reception rooms of the Kremlin, included between 500 and 2000 people and were, Milanovic writes,

sumptuous affairs, especially if contrasted with generalized penury of meat, fresh fruit and vegetables that often was the case in Moscow and even more so in the provinces. All produce and drinks however were Soviet-made. Compared to their equivalents organized by Hitler and his lieutenants and studied by Fabrice d’Almeda in The High Society in the Third Reich, Soviet banquets were more monotonous, less extravagant, and more modest. They were also more business-like in not (generally) including family members.

There were two groups of diners. The first (obviously) were members of the Politburo and top government officials. The guests were various groups of people. Many of the banquets were done after the May 1 or the Day of the October Revolution (November 7) military parades and thus included mostly the Army and the Navy. One especially favoured group, apparently, were Air Force pilots.

These provided some comic interludes. For example:

There were several special banquets for the pilots that in the 1930s achieved some notable successes for the Soviet aerospace, including flying to the North Pole, saving sailors stuck in the icy northern desert, and flying long-range non-stop flights to North America. These banquets seemed to put Stalin in an exceptionally good mood because he treated pilots with special consideration, allowing them liberties that very few were granted, including having his toast twice interrupted by the same pilot, at two different banquets. At times, there were unusual scenes that in a more bourgeois Western settings would have been unimaginable—as when Stalin invited the pilots to the leadership table and then began to hug and kiss each of them, which in turn led the entire Politburo to do likewise. With a dozen of pilots and more than a dozen of members of the leadership that implied perhaps as many as 150 or even 200 hugs and kisses. An almost California-like therapy of free hugs.

For those at the top table, however, things were anything but comical:

Even if the core was stable (Stalin, Molotov, Kaganovich, Kalinin, Voroshilov, and to some extent Mikoyan, Andreev and Zhdanov) included also the people who were, at various times, later purged and executed. For example (p. 158), “From June 1937 to April 1938, almost to his arrest, Kosior sat five times at that [leadership] table….In August 1938 Kosior’s wife was shot. And then he was arrested himself. He was taken to the higher level of punishment [probably torture]”. Overall, out of 21 people (excluding Stalin) who sat at the leadership table in 1937 and 1938, eight were shot and two killed themselves (p. 162). Thus almost half of the convives to that supreme table were killed by the main host. Not a usual occurrence.

Simultaneously creepy and fascinating.

Apple upgrade madness

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I’ve learned from experience not to upgrade immediately whenever Apple releases a new version of iOS. As far as iOS 13 is concerned, this seems to have been wise. Here’s The Inquirer‘s summary of the state of play up to today:

iOS 13, which brought with is such niceties as Dark Mode and ‘Sign in with Apple’, was only released on 19 September, but has already seen two updates: 13.1 on 25 September, and 13.1.1 two days later. Now, it’s getting 13.1.2: very much the equivalent of a file named “final final FINAL version.doc” in the vague hope that nomenclature will make the madness end.

The gaming of Medium by clickbait merchants

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From an interesting post by Simon Owens asking Will 10 million people pay for personal essays?.

Last week I posted a tweet thread that you should check out. It starts with a screen capture of a headline for an article that appeared behind Medium’s paywall. This article fits into a content category that I’ve noticed is proliferating on Medium. It’s what I call “shitty personal advice column.”

In fact, anytime I see someone bragging about how much money they’re making through Medium’s partnership program — which allows users to place their content behind its paywall and get paid for the amount of engagement it generates — I then click on their user profile to see what kind of articles this person is regularly producing, and it almost always falls under this category. Often, the person is publishing upward of two or three articles a day, with each headline over-promising and under-delivering on its premise.

And this makes sense. If you’re going to make real money on a platform that’s doling it out based on the amount of engagement it receives, you’ll need to produce a high volume of low calorie articles that require very little original research and contain clickable headlines.

It’s the old story: anything with that kind of business model can be gamed.

A while back I became tired of getting emails from Medium highlighting apparently interesting posts that, however, lay behind the site’s paywall — i.e. they were only available to Medium ‘members’ (people who pay $50/year for the privilege). So, in a moment of weakness, I signed up. Big mistake.

I’ve cancelled my ‘membership’ (which, to their credit, they make it easy to do). But I’ve still blown $50 for no good purpose. Sigh. One born every minute :-(

The twin architects of political destruction

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The Economist has a very perceptive piece comparing Seamus Milne, Jeremy Corbyn’s extreme-left consigliere, and Dominic Cummings, who apparently provides analogous services to Boris Johnson. It starts by noting that the two have quite a lot in common.

Both have spent their lives hanging around the fringes of power preparing for this moment—Mr Milne as a long-time journalist with the Guardian (and, long ago, for a short time with The Economist) and Mr Cummings as a Conservative special adviser and leader of the Vote Leave campaign. And they are both revolutionaries who despise the British establishment and believe that the country needs to be turned upside down.

On the other hand, they come from very different backgrounds. Milne is a child of the Establishment: his father was Director-General of the BBC and he went to a fancy public school and then to Balliol College, Oxford. (The Economist piece fails to mention that one of the reasons for Milne’s life-long hatred of the Establishment might be the way his father was brutally sacked by agents of Margaret Thatcher when she was Prime Minister.) Cummings comes from a more humble background, but was upwardly mobile — marrying the only daughter of a Knight who owns a castle in Northumberland.

The Economist’s view that Cummings is much more of an original thinker than Mr Milne is, I think accurate. Like me, the writer of the piece has been reading Cummings’s blog. He has, as the Economist notes,

constructed his own idiosyncratic philosophy, whereas Mr Milne serves up neo-Marxist pap. A reading of Mr Cummings’ lengthy blog-posts reveals a restless mind grappling with a whirlwind of change. One moment he is meditating on whether artificial intelligence will produce a high-tech millennium. The next he is praising Singapore’s education system. The next he is spinning out ideas about a British space programme.

In my Observer piece about Cummings, I mused about the prospect of his technocratic zeal coming into collision with the immovable force of democratic politics:

The other thing one notices about Cummings is that he’s the purest of technocrats. He admires people who relish big challenges, to which they bring formidable analytical talents, mathematical insight, engineering nous and project management skills. For him, the Manhattan Project, creating the internet and the Apollo programme are inspirational examples of how smart determination delivers world-changing results.

The only problem with this – which Cummings appears not to notice – is that these technocratic dreams were realised entirely outside the realm of democratic politics. The lazy, venal, ignorant, self-aggrandising, compromising politicos whom he despises are nowhere to be seen. And the colossal resources needed to realise those dreams came from the bottomless well of wartime or cold war military funding. Chancellors’ autumn statements are nowhere to be seen.

This is why technocrats often suffer from “dictator envy”: it’s so much easier to get things done if politics doesn’t get in the way. So if Cummings is really the guy on whom Boris Johnson is pinning his hopes for a rebooted Britain, then another collision with reality awaits both of them. For the rest of us, the only consolation is that the dust of exploded dreams sometimes makes a fine sunset.

As his unlawful prerogative of Parliament suggests, Johnson has acquired a spot of dictator-envy from his consigliere.

That Supreme Court judgment

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Stephen Sedley, a distinguished retired judge, has written a lovely commentary in the LRB on the Supreme Court’s judgment that Boris Johnson’s prerogative of Parliament was unlawful. I particularly enjoyed this passage:

On a memorandum from the government’s director of legislative affairs, Nikki da Costa, which at least attempted to face some of the constitutional issues, Boris Johnson had written:

(1) The whole September session is a rigmarole introduced [words redacted] t [sic] show the public that MPs were earning their crust.

(2) So I don’t see anything especially shocking about this prorogation.

(3) As Nikki nots [sic], it is OVER THE CONFERENCE SEASON so that the sitting days lost are actually very few.

The excised words, it turns out, were ‘by girly swot Cameron’. A minute of a cabinet conference call on 28 August was also disclosed, revealing little more than a concern not to be wrongfooted in manipulating a prorogation. Any suggestion that Johnson had given informed and conscientious consideration to the constitutionality of what he was doing will have withered on counsel’s lips.

Lovely stuff, which led me to read the extended text rather than relying on the live-streamed summary that I had watched on the day. The “girly” in “girly swot Cameron” is very revealing about Johnson’s pubic obsessions.

Excavating AI

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Fabulous essay by Kate Crawford and Trevor Paglen, uncovering the politics and biases embedded in the guge image databases that have been used for training machine learning software. Here’s how it begins:

You open up a database of pictures used to train artificial intelligence systems. At first, things seem straightforward. You’re met with thousands of images: apples and oranges, birds, dogs, horses, mountains, clouds, houses, and street signs. But as you probe further into the dataset, people begin to appear: cheerleaders, scuba divers, welders, Boy Scouts, fire walkers, and flower girls. Things get strange: A photograph of a woman smiling in a bikini is labeled a “slattern, slut, slovenly woman, trollop.” A young man drinking beer is categorized as an “alcoholic, alky, dipsomaniac, boozer, lush, soaker, souse.” A child wearing sunglasses is classified as a “failure, loser, non-starter, unsuccessful person.” You’re looking at the “person” category in a dataset called ImageNet, one of the most widely used training sets for machine learning.

Something is wrong with this picture.

Where did these images come from? Why were the people in the photos labeled this way? What sorts of politics are at work when pictures are paired with labels, and what are the implications when they are used to train technical systems?

In short, how did we get here?

The authors begin with a deceptively simple question: What work do images do in AI systems? What are computers meant to recognize in an image and what is misrecognised or even completely invisible? They examine the methods used for introducing images into computer systems and look at “how taxonomies order the foundational concepts that will become intelligible to a computer system”. Then they turn to the question of labeling: “how do humans tell computers which words will relate to a given image? And what is at stake in the way AI systems use these labels to classify humans, including by race, gender, emotions, ability, sexuality, and personality?” And finally, they turn to examine the purposes that computer vision is meant to serve in our society and interrogate the judgments, choices, and consequences of providing computers with these capacities.

This is a really insightful and sobering essay, based on extensive research.

Some time ago Crawford and Paglen created an experimental website — ImageNet Roulette — which enabled anyone to upload their photograph and then pulled up from the ImageNet database how the person would be classified based on their photograph. The site is now offline, but the Guardian journalist Julia Carrie Wong wrote an interesting article about it recently in the course of which she investigated how it would classify/describe her from her Guardian byline photo. Here’s what she found.

Interesting ne c’est pas? Remember, this is the technology underpinning facial recognition.

Do read the whole thing.