Walmart makes a coffee mug for like $2. Louis Vuitton will sell you one for $385. But there's an entire class of coffee mugs in the middle, where you're paying more than it "should" cost, but less than you would for status signaling.
An example is this mug [1]. It's $18, so it's not even close to being a status symbol. It's also a little nicer than a Walmart mug. But I'd be hard-pressed to argue that it's 6x as nice like the price would imply. I suppose you could consider it a luxury good? But in my mind, it feels weird to lump it in with a Louis Vuitton mug.
Playdate feels like it sits right in the middle of the spectrum? I dint think the price is being marked up for status related reasons. But they probably could have made something similar in functionality for a lot less money. It's just a product that's nicer than it "needs" to be.
This reminds me of a story of Diogenes the Cynic [1], who embraced minimalism to the point that he slept in a large wine jar and owned only a few simple possessions, such as his tunic and a drinking bowl. One day, he saw a boy drinking water from a trough by cupping his hands and bringing it to his mouth, so Diogenes threw away his drinking bowl and stated that the boy had found true minimalism because "nature had already provided him with a cup."
I don't know, it feels like "reading a claims summary and classifying the type of claim" should be the bread and butter LLM use case? Not that executives are blameless for pushing AI everywhere, but we should also be able to "blame" AI for doing poorly at a task it's supposed to be good at.
The interesting thing about AI v. other disruptive technologies (like the internet, steam engine, etc), is that AI has been personified both by the manufacturers of it (Anthropic being the most blatant by using a human name for its product) and users.
That makes it way more likely that people blame AI (doesn't make it right by any means, but does mean that the actual blame gets diffused even more).
How is that a problem? That makes it far worse for companies, after all. If an employee of a company makes a mistake then the consequences are:
1) employee was willingly sabotaging the company: employee gets jail time plus fine, employer is on the hook financially
2) employee was involved either in accident or just made a stupid decision: employer is on the hook financially
So if that's the case, then employers are financially responsible for everything the AI they use says. That's the rule for employees.
Note: this is different from, say if a company uses a car and it just starts by itself and drives into the next door warehouse setting it on fire (ie. some sort of designed-in decision/issue)
: in that case the maker of the car is responsible, both financially and criminally, even if an employee or even the boss/owner/everyone at the company were involved.
Of course, guaranteed that governments will change this the first time a court makes this obvious connection. Why do I think that?
Well, for example, the UK government changed the rule when it turned out the post-office's written software (written by contractors, under post office and thus government responsibility and accountability) decided to cause incredible damage by blaming innocent people for stealing. Then, a special law was voted that in that specific case it didn't apply, and the government department, nor any of it's employees, were responsible.
Just like, for example, Pennsylvania changed the rules for unwittingly-but-directly aiding criminal activity when it turned out half the Pennsylvania government was complicit in the kids-for-cash scandal (because in that case, normally, you wouldn't be criminally liable, but you WOULD be liable for any financial damage you do)
Regarding "how is that a problem" it has nothing to do with the financial obligations (I agree with your take that the company is on the hook either way). It's about being able to learn and improve.
In order to learn and improve you have to know what went wrong, with AI being personified and pulled into the pool of entities that may be at fault, it makes it harder to figure out what actually went wrong and learn. Not impossible to figure out, just harder.
>You can't 'blame' the AI, as it can't be held accountable.
Seems like more of a semantic distinction IMO. Yes, I can't technically "blame" the AI because it's not accountable. But what word would you suggest for "I had [X technology] handle [Y task] and it failed to perform that task?" I can't "blame" my router if I lose internet and it prevents me from jumping on a Zoom call, but it's also true that the router failed to do the thing it was supposed to do.
Do you blame the hammer for bending the nail, or the person driving it? AI is nothing more than a tool being used by people.
When my internet goes down, I blame either my ISP for having an outage, or the manufacturer of my router (assuming it's a router issue? Haven't had that happen personally but I'm certain it exists) (Or i did something dumb with my ufw again but that's on me)
If you create an autonomous system and it fails, blame should be on you, imo.
The word is still 'blame', it just needs to be applied correctly.
Part of the problem is the distribution of images (and text) you get from claims is not the same as what the model was trained on. A classic problem in ML.
Another part of the problem is that a model not specifically fine-tuned to make a total loss determination won't know the relevant factors, nor how an insurance company's concept of a total loss differs from the public's.
And still another part of the problem is that most total loss claims aren't what you, dear reader, are imagining: They are very rarely "the car is a thin pancake after being crushed by a meteor".
The much, much more common scenario is: "50% of the body panels sustained at least paint damage, both headlight modules need replacement, and the front wheels look funny. Given that the vehicle has an MSRP of $FOO, $BAR miles, no prior collision history on carfax, and is a popular color, is it cheaper to repair or total the vehicle?"
Of course, the model can turn over the hard cases to a human adjuster... but then what are we doing here? It only takes 10 seconds for the human adjuster to handle the "crushed by a meteor" case also.
Source: Listening to my SIL rant about being asked to stop training bespoke total loss models and just send it by 1-shotting a commercial LLM.
Not that it is necessarily the case here, but when execs go "AI shopping" they have absolutely _zero_ idea that there are basically 3-4 SOTA models, thousands of smaller models, and then an uncountable number of wrappers on whatever underlying model. The AI landscape that is totally familiar to us is covered in shroud for them.
So they Google "Insurance claim AI tool", land on a vibecoded SaaS that is just a wrapper on a pocket Chinese model spun as "your next insurance pro", and then are getting the whole department on some lone 19 yr olds weekend project.
An exclusive theatrical window is one of the big reasons to go to a movie theater: you want to see a movie before it's available on streaming. Removing copyright seems like it would harm theaters pretty significantly.
The screen would become the thing. If anyone can watch anything anywhere at any time, having a 200 foot screen differentiates a theater from watching something on a phone. 99% of the time, people will choose the phone, will choose to watch sports on tv, etc. that remaining 1% might be a big enough market and without licensing fees, theaters have a lot more margin.
Actually, it seems surprising they haven’t moved into sports (especially with sportsbooks becoming so popular).
Some cinemas do present some sporting events. The rights negotiations for sporting events are multi-layered and complex. Your average soccer or MLB game is not likely to be negotiated for that venue, and a whole-season license is unlikely. Playoffs, championships, and the like are sometimes worthwhile but it's not going to be the corner mom & pop cinemas paying for that content. It's going to be IMAX or Regal Cinemas or someone huge.
For example the 2024 Summer Olympics, with NBC owning exclusive rights to the US market for video coverage (meaning NBC Universal, meaning Comcast) IMAX licensed the opening ceremony to be picked up from NBC and delivered to their US cinemas over IP with fixed latency. It was only the opening ceremony and no scored events. That involved NBC, IMAX, and LTN to carry the video in between. IMAX and NBC negotiated the rights and LTN got statements of agreement on that from NBC. There was involved planning and engineering work to make sure the technical part went smoothly. I'm sure the negotiations, contract writing, redlines, and final sign-off between the source and destination took longer than the tech work.
I think the point is more "why is the outcome of an event like an election considered a commodity" and not a question of the value of event contracts?
Like, why would the same agency regulating wheat futures also be responsible for regulating event contracts? I know the simple answer is that Congress said they should be, but conceptually it's a bit odd.
Even in the optimistic case where SA did have alpha, the position sizing was way out of whack. Based on the volatility of the stocks they were buying, the Kelly Criterion meant you'd need to expect a 900% annual return on the stock before leverage to justify being 4x levered.
What guys like Leopold either don't understand or understand but ignore is that being right directionally and being right on market timing are two different skillsets. When you've juiced a stock by 800%, the existence of alpha pales in comparison to your vulnerability to the stock market.
Just to jump in: Citadel buying this portfolio says nothing about how Citadel feels about the stocks. It's the bread and butter of large HFT hedge funds; if you see someone that has to sell stock, you leverage the fact that you can buy all of it to get a discount versus the asset value. Reports are saying that Citadel was able to buy the portfolio for ~10% under the market value, all at once. That's a no-brainer because you both get a discount and avoid driving the price down by buying small pieces over the course of a week.;
If I were a betting man, I'd bet that Citadel was also selling to Situation Awareness while they were on the way up. At some point, SA had juiced their stock prices so much that no "rational" investors (those that have a view of the stock based on some amount of fundamentals) would be on the other side of the trade. It's retail investors, bandwagon investors, and Citadel-caliber funds. This situation (over-leveraged company blows up due to some volatility) happens all the time in commodities trading, which is where Citadel started.
I'm assuming that Citadel LLC (the hedge fund) will be able to sell these stocks for a profit, not least because Ken Griffin also owns Citadel Securities which is market maker in most of them, even if he probably can't sell directly to them.
OTOH, perhaps there was also a self-serving element of avoiding market contagion that could have occurred if SALP had instead been forced to sell into the market.
Everyone in the markets was talking about SA for the last week and shorting or covering anything they had that overlapped. I am fairly confident that Citadel was net short a good chunk of the stocks they bought from SA (and long a SA's shorts).
Contrary to popular belief these people know what they are doing.
They might not have known it was SA specifically. That being said, they definitely knew a large fund with leverage was buying these stocks. The mechanism here (and I'm not an expert) is:
1. SA wants to buy stock with leverage. You do that through a major bank via total return swaps. Essentially, SA pays X% of the value on $100 of stock (for 4x leverage you'd pay $25) plus an ongoing financing fee (call it 5% a year), then you get the return/loss on that $100 of stock. SA was in these agreements with JPMorgan and Goldman Sachs.
2. The bank, because they don't want to actually hold that risk, goes out and buys $100 of stock.
3. Citadel and others see JPMorgan buying lots and lots of this stock. That's confusing, because normally JPMorgan wouldn't be making a huge directional bet on a stock. They deduce that a large fund is buying the stock.
4. Citadel starts widening their spread (the difference between what they'll buy a stock for and what they'll sell it for). They hedge some of this as best they can, or temporarily live with the risk.
5. SA, the highly leveraged fund buying volatile stocks, inevitably blows up because volatile stocks swing around in price. A dip causes margin calls.
6. JPMorgan or Goldman need to sell the stock fast, because SA is close to dipping below their required margin (i.e. SA paid $25 for $100 in stock exposure, the stock drops to $90, JPMorgan asks for more money because the stock went down by too much).
7. Citadel offers to buy all of the stock from JPMorgan. Because they're doing it in one big block, JPMorgan doesn't lose money selling on the open market (once you start selling, each successive sale is for less money because there are more people selling than buying). Citadel is compensated for this by getting a discount to the asset value (the stock is worth $90, Citadel gets to buy it for $81).
So Citadel didn't do anything to "set up" SA. But because they're hyper-aware of market dynamics, they would have known that someone is going to need to sell stock if the market takes a turn on these names.
I generally agree with you but given your comments, you might enjoy some additional details... Or please challenge me if you think I am wrong.
I've been paying for order-level data feeds on stocks and one thing you'll find is that a lot of the 'sensitive' trades will be anonymized or broken down in different ways to obfuscate who is trading. Citadel would still be able to see there's a surprising level of interest in a certain stock but might not be able to deduce it's one actor. A broker working for SA should know they need to do this, as it helps the broker do better via commissions, etc. too.
My understanding is that Citadel negotiated directly with SA to buy the book, so the final trades were likely taking place outside of the formal market feeds.
the last step, #7, is that fully automated or is this humans calling humans? I imagine everything before then is quite automated, and are thus happening very quickly, so I'm curious if the last piece possible being manual has the potential to blow the whole thing up by being too slow.
It's humans from other banks/funds bidding on the block of stock. As far as timing, for this situation it's basically overnight for regulatory and price reasons. Regulatory because there are legal margin requirements for levered positions and you can't handle the price going much lower, and price because if you had to sell this on the open market you'd keep selling shares for less and less.
So JPMorgan/Goldman prepare all the info on the book and start calling institutional investors after the market closes. The funds and banks prepare bids, there's some negotiation, and the block is finalized before trading opens the next day.
Speed does matter, but you're only calling investors you know "can" close the deal (i.e. they'll have enough capital to buy it all that day/night). So it's more of a price question than a speed one at that point?
And really, nobody wants the downward spiral of a fire sale in the tech sector. Someone will make money on that chaos, but it's a lot of risk when you can lock in a discount with the block trade.
> a "good" CEO is just one that keeps their hands off the levers of power, doesn't rock the boat or fuck anything up, and quietly lets a good company perform
How can you tell if a company is good? Because trillions of dollars are spent by banks, private equity, hedge funds, and others truing to figure out if a company is "good."
> By that measure, you might as well save yourself the executive compensation and potential for disaster by just not having a CEO at all
Sure, but somebody is still making the decisions the CEO would have otherwise made. Maybe it's a good thing that the power isn't concentrated in one person; I'd be open to that. But you now have to trust that each department head is making good decisions. That's fine if they were already making good decisions, hit it's disastrous if they weren't.
> But you now have to trust that each department head is making good decisions.
There is a lot of evidence that corporate mergers destroy value.
What if... they were disintermediated by markets instead of being one company?
There are tons of reasons why companies exist (the whole Theory of the Firm line of research), but the information asymmetry barriers are constantly coming down.
Sure, a college student can tell you if a company is making or losing money. But there are ample examples of "good" companies crashing because they didn't react to shifts in the market, which requires projecting into the future.
Blockbuster was good until it wasn't. Sears was good until it wasn't. Barnes and Noble was good, then it fell apart, and now it's good again. The lesson to learn is that by the time your financials say things are taking a turn, you're a year to multiple years late to start fixing the problem.
And in truth it's a paradox. The better a company is (generally correlated to an empowered workforce with a sense of agency and purpose), the harder it is to extract profit for the capitalist class.
Which helps explain the "need" for CEOs to meddle.
Memory is the acute issue causing their struggles; their most recent quarter saw a gross margin of 4.5% (that's revenue minus the direct cost of producing the cameras, divided by the revenue). That's a hefty fall from their previous margin of ~31%. This contributed to their operating loss of $57M in the last 3 months.
Thag being said, they haven't had a positive quarterly operating income since the last quarter of 2022, even when the margin was higher than 4.5%. So it's not like they were succeeding before the memory crunch, just losing money slower.
>the ones who don't want it enough will go away, and the ones that do will want it enough that it's worth your while..
Counterpoint: if you think you need to pay for my attention, that's a negative signal for what you're asking me. If I'm giving 10 vendors a shot at my business, I'm not going to pay money for the right to give you that opportunity?
On the other side, the only person paying $5 to ask me something is probably someone getting a lot of no's elsewhere. That, or what I offer is so valuable that people are willing to pay for it. But that's not most people.
Sure, that's fair. I'm just saying that I probably would read a dumb solicitation email from someone who gave me, like, $10,000, but in practice that will be almost nobody, so either way I'd win!
The paradox is that the person most likely to do extra work is the person you want to hear from least. If someone felt the need to pay (for example) $5,000 to talk to me, it's probably because they don't feel they have a chance of getting my attention otherwise. I'd also never pay someone 5 grand if I'm the one offering them something.
A Captcha isn't 5 grand, but I think the same principle applies. If I'm putting a request for proposal to 10 vendors, I'll probably disqualify the one that makes me verify that I'm a human. It's not like I'm short of qualified companies.
Walmart makes a coffee mug for like $2. Louis Vuitton will sell you one for $385. But there's an entire class of coffee mugs in the middle, where you're paying more than it "should" cost, but less than you would for status signaling.
An example is this mug [1]. It's $18, so it's not even close to being a status symbol. It's also a little nicer than a Walmart mug. But I'd be hard-pressed to argue that it's 6x as nice like the price would imply. I suppose you could consider it a luxury good? But in my mind, it feels weird to lump it in with a Louis Vuitton mug.
Playdate feels like it sits right in the middle of the spectrum? I dint think the price is being marked up for status related reasons. But they probably could have made something similar in functionality for a lot less money. It's just a product that's nicer than it "needs" to be.
[1]: https://www.notneutral.com/collections/siblings-lino-mug-10o...