Talking about a January shock again:
Via the agile u/ vadhavaniyafaijan :
The Center for AI and Digital Policy (CAIDP), a tech ethics group, has asked the Federal Trade Commission to investigate OpenAI for violating consumer protection rules. CAIDP claims that OpenAI’s AI text generation tools have been “biased, deceptive, and a risk to public safety.”
CAIDP’s complaint raises concerns about potential threats from OpenAI’s GPT-4 generative text model, which was announced in mid-March. It warns of the potential for GPT-4 to produce malicious code and highly tailored propaganda and the risk that biased training data could result in baked-in stereotypes or unfair race and gender preferences in hiring.
The complaint also mentions significant privacy failures with OpenAI’s product interface, such as a recent bug that exposed OpenAI ChatGPT histories and possibly payment details of ChatGPT plus subscribers.
CAIDP seeks to hold OpenAI accountable for violating Section 5 of the FTC Act, which prohibits unfair and deceptive trade practices. The complaint claims that OpenAI knowingly released GPT-4 to the public for commercial use despite the risks, including potential bias and harmful behavior.
China and Brazil have reached a deal to trade in their own currencies, ditching the US dollar as an intermediary, the Brazilian government said Wednesday.
The deal is expected to reduce costs, promote greater bilateral trade, and facilitate investment.
China is currently Brazil’s largest trading partner. China has similar currency deals with Russia, Pakistan, and several other countries.
Why does it matter? Because no currency lasts forever, and the dollar’s position as WRC (world reserve currency) is being challenged, in current events.
See the book that Peruvian Bull wrote on the topic, for further info: https://piousbox.com/author/peruvian_bull/
(starting with Section 3)Gives the Secretary of Commerce the ability to call anything on the internet(hardware or software) a “Undue risk” of [broad spectrum of poorly defined “Crimes”](essentially whatever the secretary wants) and slap up to 20 years prison and a 1 million dollar fine for anyone using it. I must remind our folks that the secretary of commerce is an unelected position that is picked by the president and set for life unless impeached.
(Section 4) (subsection a) “The Secretary shall identify and refer to the President any covered holding that the Secretary determines, in consultation with the relevant executive department and agency heads, poses an undue or unacceptable risk to the national security of the United States or the security and safety of United States persons….”
(Subsection c.1) ” …with respect to any covered holding referred to the President under subsection (a), if the President determines that the covered holding poses an undue or unacceptable risk to the national security of the United States or the security and safety of United States persons, the President may take such action as the President considers appropriate to compel divestment of, or otherwise mitigate the risk associated with, such covered holding to the full extent the 8 covered holding is subject to the jurisdiction of the United States… “.
Do I even need to spell out why this is Bad? This isn’t even restricted to “foreign investment”, just and “Covered holdings”(see Section 2, subsection 3.B for definiton. it basically means “However the secretary of commerce defines it”).
(Section 8 Sub-section d) Allows Lobbyists and special interest groups to be added to any committees the secretary appoints that determine what websites to ban. Let that sink in. For a hyperbolic example: Apple and Microsoft could hire a shit ton of lobbyists to be added to the committee determining whether Linux should be removed.
(Section 11.a.2.2.F) BANS VPNS. Any action that could be construed as ” action with intent to evade the provisions of this Act”. This is so vague that even that it essentially bans all cybersecurity encryptions including VPNs, Onion Routing, Fucking SSL, and even having a Password because any of those can be spun as trying to avoid investigation under the bill.
(Section 12 sub-section b) Removes any action the secretary and associated committees have taken under this bill from being subject to the Freedom of Information Act. This means the secretary of commerce and his cronies can make any government document immune to FOIA by declaring it part of an “ongoing investigation”.
(Section 15 sub-section d) for those that don’t know ex parte means “used for one party to ask the Court for an order without providing the other party(ies) the usual amount of notice or opportunity to write an opposition.”. This, under the right circumstances, gives the prosecutor the right to submit information on a case without allowing the defendant time to make a defense. It also might imply the right to deny judicial review, but I’m probably wrong there(I hope).
All that and more.
Here’s the bill for public viewing: https://www.congress.gov/bill/118th-congress/senate-bill/686/text
or here for no reason: https://docs.reclaimthenet.org/BILLS-118s686is.pdf
Or if you’re lazy, here’s the leader of the Right to repair movement tearing it a new one: https://www.youtube.com/watch?v=xudlYSLFls8
This thing needs to die. Unfortunately, it’s supported by All Political Parties in Office and is currently Backed by the White House.
Every American ape needs to Call/Text/Email/Snail-Mail/Sext/Telegraph their senators and representative…
Otherwise who do you think the Secretary of Commerce is going to be looking at post MOASS?
Find them here: https://www.congress.gov/members/find-your-member
And text them this way: https://resist.bot/ I.E.>Text RESIST to 50409. Answer the questions the bot texts you, and in about two minutes it’ll send your letter via text to your elected officials, like your members of Congress or state legislators.
Re: the graph above. A slight correction to yesterday’s chart of gold prices, because I was like, wait, what? Did it really happen that way, that the price of gold was flat until 1971? So I looked up the gold price for 100 years, you can see it at https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart This graph looks accurate, I cross-checked against several sources.
The thickest gray vertical line is the Great Depression of 1929. Gold is a hedge (“insurance”) against the apocalypse itself – when everything is collapsing, gold remains a valuable rare commodity that is also necessary in production of electronics. As the Great Depression unfolded in 1930’s, people used gold to store value, and its price went up. A decade later, as people’s faith in government was slowly restored, they reduced their usage of gold as container of value, by half. In 5 more years, the shock of the Great Depression wore off and gold price returned to its then-balance of $400/oz. This seems reasonable. Gold also has its own economics: the largest gold mine sets the price worldwide.
But yeah, it appepars that the price of gold was indeed flat (excluding that one catastrophic exception) until the 70’s. Importantly, the first graph from yesterday seems to be gold price indexed to the nominal dollar. The graph from today is the gold price indexed to the real dollar (accounting for inflation). Observe the difference.
Generously pasted from: https://archive.ph/n3plH
It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not saying I’m sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t have gotten them without that. But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.”
The story of the 2008 financial crisis
- In 1998, banks got the green light to gamble: The Glass-Steagall legislation, which separated regular banks and investment banks was repealed in 1998. This allowed banks, whose deposits were guaranteed by the FDIC, i.e. the government, to engage in highly risky business.
- Low interest rates fueled an apparent boom: Following the dot-com bust in 2000, the Federal Reserve dropped rates to 1 percent and kept them there for an extended period. This caused a spiral in anything priced in dollars (i.e., oil, gold) or credit (i.e., housing) or liquidity driven (i.e., stocks).
- Asset managers sought new ways to make money: Low rates meant asset managers could no longer get decent yields from municipal bonds or Treasurys. Instead, they turned to high-yield mortgage-backed securities.
- The credit rating agencies gave their blessing: The credit ratings agencies — Moody’s, S&P and Fitch had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.
- Fund managers didn’t do their homework: Fund managers relied on the ratings of the credit rating agencies and failed to do adequate due diligence before buying them and did not understand these instruments or the risk involved.
- Derivatives were unregulated: Derivatives had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.
- The SEC loosened capital requirements: In 2004, the Securities and Exchange Commission changed the leverage rules for just five Wall Street banks. This exemption replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. This allowed unlimited leverage for Goldman Sachs [GS], Morgan Stanley, Merrill Lynch (now part of Bank of America [BAC]), Lehman Brothers (now defunct) and Bear Stearns (now part of JPMorganChase–[JPM]). These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage left little room for error. By 2008, only two of the five banks had survived, and those two did so with the help of the bailout.
- The federal government overrode anti-predatory state laws. In 2004, the Office of the Comptroller of the Currency federally preempted state laws regulating mortgage credit and national banks, including anti-predatory lending laws on their books (along with lower defaults and foreclosure rates). Following this change, national lenders sold increasingly risky loan products in those states. Shortly after, their default and foreclosure rates increased markedly.
- Compensation schemes encouraged gambling: Wall Street’s compensation system was—and still is—based on short-term performance, all upside and no downside. This creates incentives to take excessive risks. The bonuses are extraordinarily large and they continue–$135 billion in 2010 for the 25 largest institutions and that is after the meltdown.
- Wall Street became “creative”: The demand for higher-yielding paper led Wall Street to begin bundling mortgages. The highest yielding were subprime mortgages. This market was dominated by non-bank originators exempt from most regulations.
- Private sector lenders fed the demand: These mortgage originators’ lend-to-sell-to-securitizers model had them holding mortgages for a very short period. This allowed them to relax underwriting standards, abdicating traditional lending metrics such as income, credit rating, debt-service history and loan-to-value.
- Financial gadgets milked the market: “Innovative” mortgage products were developed to reach more subprime borrowers. These include 2/28 adjustable-rate mortgages, interest-only loans, piggy-bank mortgages (simultaneous underlying mortgage and home-equity lines) and the notorious negative amortization loans (borrower’s indebtedness goes up each month). These mortgages defaulted in vastly disproportionate numbers to traditional 30-year fixed mortgages.
- Commercial banks jumped in: To keep up with these newfangled originators, traditional banks jumped into the game. Employees were compensated on the basis loan volume, not quality.
- Derivatives exploded uncontrollably: CDOs provided the first “infinite market”; at height of crash, derivatives accounted for 3 times global economy.
- The boom and bust went global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust. A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.”
- Fannie and Freddie jumped in the game late to protect their profits: Nonbank mortgage underwriting exploded from 2001 to 2007, along with the private label securitization market, which eclipsed Fannie and Freddie during the boom. The vast majority of subprime mortgages — the loans at the heart of the global crisis — were underwritten by unregulated private firms. These were lenders who sold the bulk of their mortgages to Wall Street, not to Fannie or Freddie. Indeed, these firms had no deposits, so they were not under the jurisdiction of the Federal Deposit Insurance Corp or the Office of Thrift Supervision.
- Fannie Mae and Freddie Mac market share declined. The relative market share of Fannie Mae and Freddie Mac dropped from a high of 57 percent of all new mortgage originations in 2003, down to 37 percent as the bubble was developing in 2005-06. More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions. The government-sponsored enterprises were concerned with the loss of market share to these private lenders — Fannie and Freddie were chasing profits, not trying to meet low-income lending goals.
- It was primarily private lenders who relaxed standards: Private lenders not subject to congressional regulations collapsed lending standards. the GSEs. Conforming mortgages had rules that were less profitable than the newfangled loans. Private securitizers — competitors of Fannie and Freddie — grew from 10 percent of the market in 2002 to nearly 40 percent in 2006. As a percentage of all mortgage-backed securities, private securitization grew from 23 percent in 2003 to 56 percent in 2006.
The driving force behind the crisis was the private sector
Why didn’t anyone say anything?
Why didn’t anyone listen?
The social utility of the financial sector
Wall Street, which was originally designed to finance “creative destruction” (the creation of new industries and products to replace old ones), fell into the habit in the last decade of financing too much “destructive creation” (inventing leveraged financial products with no more societal value than betting on whether Lindy’s sold more cheesecake than strudel). When those products blew up, they almost took the whole economy with them.