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The Economist drafted a typically cheeky and wonderfully entertaining gloss on the current state of expert networks. For the most part, they get it right, but they also get it wrong in important ways.
No, Wini Jiau is not a player in the expert network industry. She was a consultant whose information was the envy and downfall of the investment community and is alleged to have persistently acquired and sold material non-public information to a loose band of investors. The Economist would have done better to mention Don Chu, who did work at Primary Global and did confess to trading in inside information. Wini was just a consultant.
Yes, because of what may eventually be described as a systematic conspiracy by Primary Global to trade in inside information through a vast network of corrupt insiders, both alleged and confessed, eyebrows have been raised. Regulators, investors, and limited partners have awakened to the risks inherent in any research activity.
No, these risks are not particular to expert networks. Indeed, an example elaborated by the Economist actually suggests the opposite – that expert networks might serve as a kind of prophylactic to the kinds of funny-business to and for which we have recently seen many confessed and convicted.
The Economist suggests that compliance protocols and procedures are no match for those determined to do wrong. The piece conjures a cautionary tale of an investor, having been introduced to an expert through a network, rerouting their activities through an independent consulting relationship, “which enables them to buy tips without GLG ever knowing.”
It’s certainly possible, but isn’t it also an argument for expert networks. If expert networks are so darn difficult about compliance that an adroit and corrupt investor would choose to circumvent them, then shouldn’t “compliance chiefs” relish the chilling effect expert networks have on their employees’ baser instincts?
I did enjoy, however, their clever turn of phrase to a conclusion. Indeed, Rajat could have used some expertise in discretion. Though perhaps he could have learned it through the policies, procedures and systems of an expert network.
The cost of physical capital was, for over 150 years, the central organizing principle of information and cultural production, from the introduction of high-cost, high-volume mechanical presses, through telegraph, telephone, radio, television, cable, and satellite systems. These costs largely structured production around a capital-intensive, industrial model. The declining price of computation, however, has inverted the capital structure of information and cultural production.
—Yochai Benkler, Coase’s Penguin
A watercolor from Andrew Wyeth entitled Lobsterman, it was initially done as a potential illustration for Maxwell House
This post contained a screen-shot of a Ciaran Clear painting, and the image seems to have been removed by wordpress. It’s too bad. The page was consistently on the first page of a Ciaran Clear search, and it was a great image.
The New York Times brought to light recent efforts to rehabilitate and restore the reputation and work of Robert Winthrop Chanler this morning.
Eve Kahn, writing in the antiques section, shared the story of Lauren Vollono Drapala, a graduate student in the historic preservation program at the University of Pennsylvania, who has taken an interest in Chanler and his works. Research in the former studio space of Gertrude Vanderbilt Whitney has revealed evidence of a brilliant mural and relief resting beneath layers of whitewash.
The ex-Sheriff of Dutchess County had financed a less than mild mannered lifestyle in the early part of the 20th century with a not insubstantial inheritance from his grandfather, John Jacob Astor. The Whitney Studio is among a handful of prime examples of his installation work, among them the Rokeby House and the Coe House. His artistic accomplishments were mostly categorized as decorative, and as such, we would never recognize him as an participant at the famous Armory show. Though he was refused a reputation for his artistic contributions, he did earn one for poor judgement.
Immediately following his 1910 marriage in Paris to the opera singer Mile, Lina Cavalleri, his lawyer filed the much discussed ante-nuptial agreement. Chanler “divested himself of all his real estate in New York County, which is considerable, and also of his real estate holdings in Dutchess County.” He did so to the amazement of his family and for the benefit of none other than Mile, Lina Cavalleri. Not only did she receive the real estate, “he bound himself to pay his bride $20,000 a year.” Just in case he was thinking about side-stepping these obligations, he also named her his irrevocable attorney. In a famous telegram, Chanler’s brother John, who offered all of those around him eager descriptions of his budding X-Faculty and the many sonnets, plays and stock-tips it had dictated to him, who changed his surname to Chaloner, which he claimed was the earlier variant of the family name, and was generally unknown for soundness of mind, wired him in Paris: “Who’s looney now?” The question would become famous in its own right. The marriage lasted two years, and Cavalleri went on to marry an opera singer and later open a beauty parlor in Paris.
Chanler’s brother, Marion Ward Chanler, lost far greater stakes from a similar disabuse of judgment. Reportedly, he engaged Marshall Latham Bond in an eating contest in February 1883 at the St Paul’s School in Concord, New Hampshire. Bond and his brother would later employ Jack London during the Klondike Gold Rush in 1897, and Buck was actually based on Bond’s dog Dawson. Chanler had received ten pounds of Turkish Delight from his grandfather, Samuel Ward. The task, consume it all, and may the greater appetite be the winner. Bond lost, and Marion died, so the story goes, from a surfeit of Turkish Delight.
Chanler, nonetheless, maintained a steady stream of contributions to what would be considered decorative arts. These include screens, murals, stained glass windows, and the mural and relief in the former Whitney studio space. One can find them at the Rokeby House in Dutchess County, the Coe House in Oyster Bay, Villa Vizcaya in Miami, and various public and private collections. For a collection of poor judgement such as this, however, requires a bit more digging.
Our job is to increase the cost and risk of engaging in illicit conduct. Anyone who engages in insider trading is especially foolish or pathological, and certainly doesn’t belong in any field where rational risk assessment is part of the job description.
—Preet Bharara, speaking at the New York Financial Writers Association, via The Independent. Remarking on the startlingly common question, how close the line, sir, he said, “I’m tempted to say, three-and-a-half feet. I disagree with the premise of the question.”
Eben Moglen speaking at the Personal Democracy Forum
Machine Readable News round-up in Traders Magazine: part one, part two.
The players
- Recorded Future – RF launched in late 2008. Rather than a tape-approach, RF has taken it upon themselves to create a highly interrelated archive of event data that is accessible on a point in time basis and capable of being sliced and diced on a variety of levels, down to the underlying text fragments themselves.
- Thomson Reuters – NewsScope Direct, launched in January of 2010 as an extension of the US-only operation. Rich Brown, global business manager. NewsScope focuses on two elements. First, low-latency access to economic data. As Reuters, they have access to the lock-up, so they get Department of Labor data first, for example. Second, sentiment and coverage counts on companies from the Reuters news feed.
- Bloomberg – BN Direct organizes the Bloomberg feed and public filings. They initially intended to categorize stories by buy or sell signals for particular companies but have since backed away from this effort. Instead, it shows what articles are about what companies, readership-volumes across the Bloomberg user-base, and story-flow, which tracks the most written about companies and news topics using the news sources. For an additional fee, subscribers can incorporate the New York Times and Financial Times feeds. Bloomberg News, where the enemy is the human. Stefan Whitney, product manager, BN Direct, Bloomberg.
- Dow Jones – Rob Passarella, VP & Managing Director, Dow Jones, former Bear Stearns and Monitor110
- Ravenpack –
- Deutsche Bourse – Alphaflash, a combination of Need to Know News and Market News International, which were acquired in 2009
- Selerity –
Simply give them what they want. Freedom isn’t for anything in particular, only an assurance of non-interference with any individual’s needs or wants. Start with market democracy. Destroy the elite institutions that instruct individuals on what to do and how to behave. Allow individuals to determine their own needs and wants. And the market will rise up to satisfy their needs. This would fulfill Isaiah Berlin’s notion of negative liberty and his concern that freedom for something, some ideal, to make the world a better place, would lead to tyranny.
It’s the subject of the The Trap, three part series by British documentary film-maker and antagonist, Adam Curtis. Parts one through three are linked below.
More on the documentary, The Trap, by Adam Curtis at google video, overview
Part One – F**k You Buddy, (11 March 2007)
Part Two – Lonely Robot, (18 March 2007)
Are the markets a means of consent? –Thomas Frank
Part Three – We Will Force You to Be Free (25 March 2007)
The third film in the series provides an astonishing analysis and indictment of Paul Bremmer’s transitional government program in Iraq. Remove the government apparatus. Immediately privatize all state assets. Encourage reconstruction through the efforts of multinational corporations with the promise of tax-free profits. Unfortunately, rather than coalesce into a shining economic and political success, Iraq erupted with violence and burned its immediate economic prospects as a result of Bremmer’s policies.
Stilltitled 