Matt Levine is back with Money Stuff! I can’t believe he delivers these to your inbox in full form. From the Bloomberg Opinion column. Free of charge! Thank you, Matt. Your posts provide immense clarity into the muddled world of loopholes and treachery permeating our money-grabbing-at-all-costs culture.
Everything is securities fraud. Someone sued CD Projekt, the makers of Cyberpunk 2077 because they bought stock, the game sucked, and the stock price went down. Similarly, someone sued Pinterest because it allegedly has a “toxic work environment” and a “culture of discrimination,” and investors are mad because this makes the stock price fall. Levine writes with such flair, it makes the reader feel superior. On a lawsuit over sexual harassment at Alphabet Inc., he writes
Of course the lawyers get a cut of those settlements. “Sexual harassment is securities fraud” is an idea that will buy a big yacht for the lawyer who came up with it. It’s so much better—for the lawyer—than suing directly for sexual harassment. If you sue for sexual harassment you have to recruit individual plaintiffs who were harassed, and you have to prove their cases, and they’re all probably different so it’s harder to make it a lucrative class action, and they are actual individual humans who have been harmed and you have to be sensitive to their trauma. If you sue for sexual-harassment-as-securities-fraud, the plaintiffs are easy to find (big shareholders), you don’t really have to prove harassment (just refer to news accounts), your clients are only in it for the money, everything is clean and simple and easy. Also the dollar amountsare larger: In some subjective moral sense, sure, employees are more harmed by a toxic work environment than shareholders are, but if the toxic work environment is at a large public company, and the stock drops, then it’s really easy to argue that the shareholders lost a huge amount of money and should get it back.
So even if whatever sketchy thing was done at a company is legal, you can still sue for securities fraud as the limelight and potential illegality caused a dip in the markets. Gotta love the system.
DALL·E: Creating Images from Text (OpenAI - Research Paper)
Open AI has done it again, and their results are mesmerizing! Whoever said “creative ventures” were safe from automation? Sure, the 12-billion parameter (or variables in an equation) aren’t available to me or you, but this is just the beginning.
I won’t attempt to explain how a transformer works, but in short, an equation takes in an image and a text description of the image and learns how they are interconnected - figures out the variables necessary that optimize the equations that connects the image+text pairs. After it learns to connect the 400 million image-text pairs used by OpenAI, the user can give it a either a piece of text or image and it will render what’s missing. Sure, it doesn’t always work (you can see some examples on their blog), but its capabilities are impressive. It can modify attributes of an object, draw multiple objects, visualize objects in three dimensions, rotate objects with ease, and visualize the internals of objects.
I urge you to go and explore the model’s capabilities - see where they fail and what you think their uses can be. Be comfortable with its limitations because sooner or later we’ll be able to use this tool to our advantage. The media is about to make this story sensational but don’t be scared, however, and learn to embrace the change.
Scattered Notes
From Myles Udland’s Late - one reason why liberal arts majors find themselves climbing the ranks of the financial industry: storytelling.
The easiest way to make [the] case is to explain why a new concept is a version of an older thing you know and love.
And so, the Shopify for X was born. Shopify enables e-commerces to be built. Fast. Allowing for many copycats.
Tim Taylor writes about The Curse of Knowledge, and why good people write bad prose. Because they can’t empathize with their audience! Which goes back to why I love Matt Levine’s writing. Because he can, and very well empathizes with his audience’s pre-existing knowledge. Not too dumbed down, not too techied up, just right.
Another one of Tim Taylor’s posts - The Super-Rich and How to Tax Them should be compulsory reading for every citizen of the United States. Specially those that talk about taxes, the 1%, and Trickle Down Trump Up Economics.
There are basically four ways to tax the super-rich: income tax, capital gains taxes, the estate tax, or a wealth tax…
If you look at the wealthiest Americans like Jeff Bezos or Bill Gates, their wealth doesn't rise over time because they save a lot out of the high wages they are paid each year; instead, it's because the stock price of Amazon or Microsoft rises. They only pay tax on that gain if they sell stock, and receive a capital gain at that time. Thus, if you want to tax the super-rich, taxing their annual income will miss the point. You need to think about how to tax the accumulation of their wealth.
This, and many other nuggets of gold can be found on his blog, tax free.
One more thing because I talk a lot. WTF is going on in American Politics?! If you don’t understand QAnon, here’s my favorite primer, and a more serious post by the same author.