The product was new and complex, but the deception and conflicts are old and simple. Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.

Robert Khuzami, the director of the S.E.C.’s division of enforcement: via NYT. What similarities or dissimilarities are there with the circumstances around the Magnetar CDO trade?

The SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation.

GS, response, an hour later

Wall Street reaped huge profits from “creating filet mignon AAAs out of BB manure.

Mike Blum, GS CMBS surveillance expert: via Dunlop

More and more leverage in the system, the whole building is about to collapse anytime now…Only potential survivor, the Fabulous Fab[rice Tourre]…standing in the middle of all these complex, highly leveraged, exotic trades we created without necessarily understanding all of the implications of those monstruosities!!!

Fabrice Tourre, VP, Goldman Sachs, January 23, 2007. He would soon receive an email from the head of GS&Co’s structured product correlation desk, “the cdo biz is dead we don’t have a lot of time left.” (February 11, 2007)

Luddites today are no longer faced with human factory owners and vulnerable machines. As well-known President and unintentional Luddite D. D. Eisenhower prophesied when he left office, there is now a permanent power establishment of admirals, generals and corporate CEO’s, up against whom us average poor bastards are completely outclassed, although Ike didn’t put it quite that way. We are all supposed to keep tranquil and allow it to go on, even though, because of the data revolution, it becomes every day less possible to fool any of the people any of the time.

Thomas Pynchon, Is It O.K. To Be A Luddite?, NYT: via Rough Type

Pro-IP act, the GAO review, and industry-funded assertions of losses to piracy and copyright theft

The GAO concluded that it is difficult, if not impossible, to quantify the economy-wide impacts [of copyright violations]

To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above. These choices are difficult, and it always seems easier to put them off — until the day they cannot be put off any more.

Bernanke, in remarks to the Dallas Regional Chamber of Commerce – 7 April 2010

He was maybe just somebody with mental problems who happened to have a camera

Banksy, on Thierry Guetta, from Exit Through the Gift Shop, with a nod to Nate Tate

What would the Internet be without “content?” It would be a valueless collection of silentmachines with gray screens. It would be the electronic equivalent of a marine desert -lovely elements, nice colors, no life. It would be nothing.
Edgar Bronfman, via Andrew Odlyzko

and today time and space are as if they were not, and from sea to sea our subjects of thought are as one. It was but yesterday that half our world knew not how the other half lived: now both halves read the same items at breakfast.

…the early telegraphers were planters for Graham Bell, and the telephone came to carry the word of man afar, and the graphophone to perpetuate it forever, and thus to complete the annihilation of space and time as obstacles to the diffusion and unification of intelligence.

W J McGee, Fifty Years of American Science, September 1898: via Atlantic Monthly.

Doc Searls frames danah boyd’s recent talk on privacy at SXSW as a loss of control. The internet’s applications and engagement with society have resulted in a loss of control over one’s privacy. But this is misleading. It suggests that one might have had control in a more personal setting – that an in-person meeting might charter one’s ability to shut another up, impounding the information forever. Did we ever have that level of control? No.

But Searls has tapped into something. It stems from a fundamental disquiet around the social contract that Eben Moglen describes in Freedom in the Cloud with Facebook, among other social networks: “I will give you free web hosting and some PHP doodads and you get spying for free all the time.” He’s tapped into the disquiet around actual control over the architecture of social interactions. It’s control, not the lack thereof, that is startling.

The architecture of social interactions, to be sure, is a loaded phrase. For our purposes, it can be simplified and thought of along three dimensions. First, it reflects the conditions under which one might share information. One might share a status update with Friends on Facebook or tell a colleague of a weekend about town over coffee. Second, it speaks to how another might absorb the information – ranging from listening carefully to surveillance of Friend’s wall on Facebook. Third, it is shaped by how people think about their audience. Are these systems for addressing individuals or groups? A person or a public? boyd’s talk glances upon this, but does not tease out its underlying influence on sharing and surveying.

It would be wrong to say that we ever fully controlled sharing or surveillance in any of the real world interactions of which boyd speaks wistfully. These encapsulate a flexible, mutable set of considerations and circumstances that one might make or be subject to with each interaction. Should I tell so and so? Is this the right place for it? Will someone overhear? What will they do with the information once they have it? We can edit ourselves, choose the conditions of how we share information. But we have to make compromises. We can make judgments around the setting and the person. We might even influence how they treat the information. But we don’t control what they do with that information. We may be careful, but we don’t really control any of it.

Social networks and interactions on the internet, however, introduce actual control over how we share with and survey one another. Control amounts to the easy ability to publicize what boyd calls personally identifiable information and personally embarrassing information. There are two parts to this: the ability to share more effectively and pervasively; and the ability to listen and survey more broadly. It’s not that we are giving up control, as boyd says. We didn’t have it in the first place. It’s that we’re seeing it for the first time. Control is over publicity, not privacy, and it sits with whomever or whatever has the information.

A discrete email might feel selective and appear to impound the information forever, but it can just as easily be circulated to another and another and another. That email or Facebook photo or blog post, unlike hearsay and the slow erosion from memory of a coffee-shop confession with a close acquaintance, can circulate with alarming ease and absolute fidelity to the initial confession. Indeed, systems on the internet don’t so much impart control over privacy, but over publicity. In a matter of keystrokes, damaging, embarrassing or otherwise hilarious information can be shared, surveyed, and shared again – increasingly open to the deliberate or serendipitous surveillance of many more people than might otherwise be intended. Each digital footprint stirs with potential energy.

The rising claim that privacy is dead, boyd suggests, imbues these systems with a prejudice for publicity. Fulfilling Moglen’s social contract, social networks design their systems to increase the velocity of sharing and improve the powers of surveillance. The obvious example comprises the PHP doodads from Moglen’s quote, but the counterpart is how social networks change how people present themselves and the information they share. It’s a change that shifts participation toward publicity.

Social networks orient one’s sharing and surveying toward groups, not individuals. The orientation levels one’s relationships according to various categories of access. One group can see only your public profile. Another, your entire wall and collection of embarrassing photos. But everyone is addressed in the same way through status updates, postings: each according to their clearance, and without regard for who they are individually. A user wrestles with the idea of the public, not the idea of a friendship.

boyd characterizes Twitter accordingly and starts to draw a distinction from Facebook. She suggests Twitter “evolved to be primarily about those seeking an audience and those seeking to follow or contribute to a public in some way.” Users invent a persona and participate in a system designed for publicity. She argues that Facebook, however, is “still fundamentally about communicating with a specific set of people who are, by and large, your friends.” But suburban Facebook’s engineering, through likespostszombies, encourages addressing a group, a public, not an individual — even before the recent changes in privacy policies that accidentally may have led to some over-sharing by unsuspecting users.

Sharing with a public, surveying a public – these activities engage the public. They not only depend on the public, they drive publicity. boyd warns us with a distinction, “there’s a big difference between something being publicly available and being publicized.” But the shift toward control in the architecture of social interactions erases the difference between publicly available information and publicized information. Public information is publicized information.

The shift that we’re observing is one toward greater control, not less. Enhancements to one’s ability to share and survey information introduce massively distributed control and gear the engines of publicity. With each individual arranged as a node in the network, equipped to survey and share as they wish, oriented to an ever changing public, we are seeing a shift toward control, not away. And with it, the realization that more control means more publicity.

the machine has emancipated these beauties of nature in wood; made it possible to wipe out the mass of meaningless torture to which wood has been subjected since the world began, for it has been universally abused and maltreated by all peoples but the Japanese.

Frank Lloyd Wright, The Art and Craft of the Machine, starting with a democratic tendency of the machine age and pointing toward a more primitive aesthetic

The Future of News, volume 139, number 2, Spring 2010: Daedalus

Introduction Loren Ghiglione

News & the news media in the digital age: implications for democracy Herbert J. Gans

Are there lessons for the future of news from the 2008 presidential campaign? Kathleen Hall Jamieson & Jeffrey A. Gottfried

New economic models for U.S. journalism Robert H. Giles

Sustaining quality journalism Jill Abramson

The future of investigative journalism Brant Houston

The future of science news Donald Kennedy

International reporting in the age of participatory media Ethan Zuckerman

The case for wisdom journalism–and for journalists surrendering the pursuit of news Mitchell Stephens

Journalism ethics amid structural change Jane B. Singer

Political observatories, databases & news in the emerging ecology of public information Michael Schudson

What is happening to news? Jack Fuller

The Internet & the future of news Paul Sagan & Tom Leighton

Improving how journalists are educated & how their audiences are informed Susan King

Does science fiction suggest futures for news? Loren Ghiglione

poetry: In a Diner Above the Lamoille River Greg Delanty

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