News — At The Edge — 2/17

• Disturbing near term issues — generative adversarial networks and police technology — suggest everything is soon likely to get crazier than it is now.
• Unresolved issues clouding the future — credibility gap, insider trading, unstable financial market and robot tricks — and that are guaranteed to exacerbate the complexity of our lives.

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Disturbing near term issues –

The New Neural Internet is Coming —

“Generative Adversarial Networks (GANs) are the first step of neural networks technology learning creativity….Conditional GANs are capable of not just mimicking the broad type of images…[but] translation textual image description into the image itself….By varying random seed that is concatenated to the ‘meanings’ vector we are able to produce an infinite number of…image, matching description….

[In 2 years] GAN will be able to generate any image, on-demand, on-the-fly based on textual (for example) description….And here’s the scary part. Such a network can receive not only description of the target object it needs to generate, but also a vector describing…your personality, web browsing history, recent transactions, and geolocation, so the GAN will generate one-time, unique and, that fits you perfectly….

By measuring your reactions the network will adapt and make ads targeting you more and more precisely, hitting your soft spots…[and] see a fully personalized content everywhere on the Internet. Everyone will see fully custom versions of all content…[and] GANs will able to target content precisely to you with no limitations of the medium — starting from image ads and up to complex opinions, trends and publications…a constant feedback loop, improving based on your interactions.

And there is going to be a…fully automated war of psychological manipulations, having humanity as a battlefield….[So] we need few things: broad public discussions about this technology inevitable arrival and a backup plan to stop it…[and] benefit from it at the same time….

[All] is within a reach of few years and likely big corp already have this kind of resources available.” https://hackernoon.com/the-new-neural-internet-is-coming-dda85b876adf

Chinese police are using smart glasses to identify potential suspects —

“China already operates the world’s largest surveillance state…[but] new smart eyewear…piloted by police officers…[connects] into China’s state database [of]…criminals using facial recognition.

Officers can identify suspects in a crowd by snapping their photo and matching it to the database…with the person’s address [and name]….[It’s] already facilitated the capture of seven individuals, while 35 others using fake IDs are said to have been found….[It’s] been used to surveil those traveling by plane and train….

China’s has been criticized in many quarters for the way it uses its database, and facial recognition tech.” https://techcrunch.com/2018/02/08/chinese-police-are-getting-smart-glasses/

Our Twilight Zone & What Comes Next *_“You’re traveling through another dimension, a dimension not only of sight and sound but of mind.”_medium.com

Unresolved issues clouding the future –

It’s Getting Harder to Sort the ‘Credible’ from the Incredible —

“[T]he last year…taught us…the public sphere is now…a free-for-all. Authority has become something diffuse and flammable, like spray paint….

[Type] an opinion, lob it into the network and you might be…all over the world…[or] on fire, but at least you’ll have an audience….

Everything is an argument [and]…every article your friends…link to a declaration of rhetorical war….

The internet has always been a cozy home for partisans and pedants, conspiracists and crusaders, but gradually…has crept into the rest of our lives….

The business of the country is now conducted like an argument on an unmoderated internet message board — an unceasing thread of squabbles, reversals and revisions….

Foreign Affairs articulated the ‘credibility gap’…[as] no small thing: Being seen as likely to act on your word is the basis of every threat, every diplomatic agreement…and for America to abandon that credibility is a grave loss….

[Blame] is often placed on the Watergate scandal, but it’s not exactly clear that America trusted its politicians before that…[with] assurances about Vietnam (the end was in view) and the reality on the ground (it was very much not)….Joseph McCarthy’s claims…government had been overrun with secret Communists….

Now, each seismic cultural event sends information flying around the internet with such force and velocity that no individual could possibly sort through it all.

Mass-casualty events…are flash points of informational chaos…anyone can step up…to fill the void with a theory….[M]any ideas that once…on the fringes of credibility can now take center stage….

[Remember] a brightly lit library…the High Church of authority…on what was worth believing and what wasn’t. This is precisely the opposite of how it feels now.” https://www.nytimes.com/2018/01/30/magazine/it-getting-harder-to-sort-the-credible-from-the-incredible.html

The Evolution of Mind Games_In biological evolution, natural selection is agnostic about what succeeds or fails. But being agnostic isn’t an option…_medium.com

Insider trading has been rife on Wall Street, academics conclude —

“What is known about insider trading tends to come from prosecutions…[needing] fortuitous tip-offs and extensive, expensive investigations…[but] a new way of analyzing conduct in the financial markets…raises questions about how to treat behavior if it is systemic rather than limited to the occasional rogue trader_…._

[Study of] 497 financial institutions between 2005 and 2011, paying particular attention to individuals who had previously worked in the federal government, in institutions including the Federal Reserve….[Before] TARP, these people’s trading gave no evidence of unusual insight…[but] nine months after…they achieved particularly good results…[so]‘politically connected insiders had a significant information…during the crisis and traded to exploit this advantage’….

[Other] data from 1999 to 2014… covered 300 brokers [with]…focus on the 30 biggest, through which 80–85% of the trading volume flowed. They find evidence that large investors tend to trade more…ahead of important announcements…which is hard to explain unless they have access to unusually good information…Strengthening this argument is…that large asset managers which use their own affiliated brokers do not lose out….

[Losers] are retail customers and smaller asset managers…[so] the public markets are, as conspiracy theorists have long argued, not truly public at all.” https://www.economist.com/news/finance-and-economics/21736561-one-study-suggests-insiders-profited-even-global-financial-crisis-another

Financial markets abhor an equilibrium —

“Both the stockmarket and economic cycles seem to have lengthened…tied together by credit…. Given the shift from a manufacturing…to a service-dominated economy, a longer cycle makes sense…[since] the service sector is not subject to the same cyclical pressures…[and] less prone to an inventory cycle….

[2008] economist Hyman Minsky enjoyed a revival….that Financial markets abhor an equilibrium….

[So] a consensus that a climate has been established and will continue…[like] ‘stagflation’ in the 1970s, the ‘great moderation’ in the 1990s and the early 2000s…[and] adjust their portfolios and their behavior accordingly and, crucially, the fiscal and monetary authorities respond to their actions….Financial markets then adjusted to this new equilibrium….

[Post 2009] was a sense that the banks had escaped the consequences of their actions….[The] result was the electoral rebellions of 2016…[that] has been good for the plutocrats…[but] doubts are starting to emerge…towards a period of more ‘normal’ rate levels, then the tendency to long cycles may not last.

For the first time since the 1970s, the secular direction of rates and yields may be up, not down. That is a problem for those who borrow to buy assets…[with] more debt, relative to GDP, than it did in 2007…[and] average corporate credit rating is much weaker than…20 or 30 years ago.

The new cycle may be based…on the credit cycle. Even modest steps on the monetary brake may have quite rapid effects on markets and on the broader economy.” https://www.economist.com/blogs/buttonwood/2018/02/cycle-times

Capitalism and Post-Capitalism — The Whole Truth & Nothing But_As a dog that regularly bites, it is fair to say we have a love-hate relationship with capitalism. This lends itself to…_medium.com

Why New Economics Needs a New Invisible Hand —

“The old concept pretends that the pursuit of individual or corporate self-interest robustly benefits the common good, as if ‘led by an invisible hand’….Nobody believes that an economy can truly be a free for all….

Evolutionary theory makes…clear that the unregulated pursuit of self-interest is often toxic for the common good…. Nature is replete with examples… because the society is the primary unit of selection…[and] higher-level selection winnowed a small set of…behaviors that contribute to the common good from the much larger set of lower-level behaviors that would disrupt the common good. In short, higher-level selection is the invisible hand….[Otherwise] varying forms of cheating behaviors [occur]….

[What’s] called multilevel selection theory, can be applied to [us]… during the last 10,000 years, and the rapid changes swirling all around us today….[Thus] must learn to function…[a]s designers of large-scale social systems and as participants in the social systems that we design. As participants, we don’t need to have the welfare of the whole system in mind, but as designers we do…. Anything short will result in social dysfunction….

[It isn’t] centralized planning…[because] import of the New Invisible Hand is…existence of a middle path…to design social systems that is…evolutionary and iterative… as a cultural ‘mutation’… somewhat like the geographical distribution of a biological species. What’s needed is a way to transcend these cultural boundaries.” http://evonomics.com/the-new-invisible-hand-david-sloan-wilson/

Boston Dynamics’ newest robot learns to open doors (40 sec. video)

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May you live long and prosper!Doc Huston