Budgeting for Fraud-A China Hustle Review- Scott Dennis April 2018
“Greed is the lack of confidence of one’s own ability to create.” V. Bonta
The documentary China Hustle is asking an important question: is fraud an essential part of capitalism and if not who will enforce the rules? Normal working people continue to ask this question in the light of the 2008 recession, stories of offshore accounts for the wealthy and almost monthly fines issued to bad actors within the American financial system such as Wells Fargo who may in fact consider fines for fraudulent behavior as the cost of business. It is a story that needs to be told because American workers presently have pension funds investing in Chinese assets that may well be fraudulent and ultimately worthless, hurting Main Street as well as Wall Street.
The film begins at the intersection of catastrophic losses during the great recession and the allure of China as a savior for investors looking to rebound. All of the key figures in the film are from the financial sector and the viewer can imagine how much doubt they must have had about the financial system as the great recession unfolded and how eager everyone was to look the other way at the panacea of earnings from Chinese companies. The way this manifested itself is through reverse mergers, the film gives a good overview of this legal loophole that was used to merge small Chinese companies with American shell companies with the intent of avoiding scrutiny on their way to being traded on U.S. exchanges. China Hustle claims that nearly 80% of Chinese companies being invested in by everyday people are reverse mergers and viewers will credit the filmmakers to alert us to this fact, it’s helpful for regular investors to look into these types of mergers as part of their own due diligence.
The filmmakers make an argument that Chinese and U.S. markets have a inherit problem working together that is cultural at its core. The Chinese business climate they claim is relationship based to the point of being feudal a reflection of a weak legal system. Although the viewer may be aghast at the willingness of Chinese companies to defraud American investors, it should be noted that China’s foray into the free market is still in its infancy. That said the ire should be saved for the lack of government oversight of these types of investments by SEC and the Congress. The most effective cinematic device is when director Jed Rothstein lingers on the faces in the interviews, they all look a little lost and disgusted by the situation. One of the investors that raised the alarm on China was Dan David; we see his frustration cataloged in the film as he attempts to get Washington’s attention regarding the dangerous exposure the American economy has to Chinese investments. The film is worth seeing for average people in order to remind them to do some homework when it comes to foreign investment, because the more opaque the opportunity is the more serious the risk.
How to get a billion people to work for you for free-Technology and private property.
Scott Dennis March 13, 2018
We have all heard the axiom that “knowledge is power”, when a clear view of how power is being wielded today emerges it is perhaps far more accurate to say that “data is power”. There are multi-million dollar businesses that provide data protection services, but what about the data that we freely hand over or that we are unaware that we are providing? An informed citizen needs to understand how this data is being retrieved, by whom and for what purposes. Let me start to lay out the concept of how data is retrieved with a personal story. In 2007 I was part of a group of managers who had the responsibility of hardening the security of a port facility. At regular intervals we would invite stakeholders such as the fire department, police and the local military representatives to stage a drill that introduced possible scenarios that could affect the port and we responded based on our particular role. One year we had a special group of guests from the labs at the Defense Advanced Research Projects Agency (DARPA) to observe the exercises. They explained that they were there to monitor our decisions in response to the ever worsening artificial scenarios playing out during the exercises. These Naval Intelligence researchers were early adopters to the theory that artificial intelligence was never going to reach its potential without useful data sets.
AI is dumb unless we teach it about ourselves
The kind of work that DARPA was doing that afternoon falls under a thirty year old application of technology called a decision support system (DSS). Over the decades government and the corporate world has applied these technological structures more for the facilitation of organizational processes than actual decision making. However the revolutionary scaling of how organizations can now collect data into so called knowledge warehouses has made actual decision making possible. Look at it this way, if you wanted your Artificial Intelligence to help you make decisions ten years ago then you were doing field work or surveys and keying in the data. Now imagine that information pipeline scaled to the level of the global internet with billions of people offering information about themselves and their behaviors.
What We Share
Recently January 28th has been named data privacy day; this is an effort to raise awareness on how to protect your private data. In my opinion it is a holiday similar to Valentine’s Day, asking you to think about security but actually a commercial for the vendors supplying protection measures. It is far more important for individuals to have a sense that their information is private property and act accordingly when interacting with their own data cloud. Even when we interact with our social media we are doing some of our most vigorous sharing of data.
Researchers have been suggesting that every Facebook user (now numbering one billion people) can be seen as digital workers inputting an estimated 20 minutes a day of their own private information, liking, commenting and clicking on ads. That is more than 300 million working hours of free digital labor per day.
The take away here is that free data sets are flowing to private AI, which will compete directly with workers in the near future. Some improved measures of protection will be enacted on May 25, 2018 with the enactment of the GDPR in Europe which mission is according to their website.
“The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established.”
So far there are no equivalent measures being considered in the U.S. as of yet, but it is important to get the word out on digital privacy so that we can move toward protecting citizens from zealous technological applications.
Scott Dennis Writes for Blue Collar Think Tank