I wrote some time ago that Data was the new fool’s gold. Upon returning to the field of property development it had become very apparent that my own industry had fallen to the
“It’s all about the Data” chant. Lots of people were doing lots of things to do with data in lots of very clever ways offering up lashings of reverence to the gods of Bits and bites
but paying scant regard to boots on sites.
We are told that DATA is valuable, the necessity of connectivity is a matter of security in much the same way as Energy Security and Food Security or Border security were once
high on the list of competencies, we sought from our government agencies and security services, those same agencies now tell us that our Cyber security has to be prioritised against Cyber threats.
In this short post, I am seeking to call out the Digital Snakeoil Noise and see if there is a worthwhile signal which can be interpreted into a meaningful context for proper application of “The Data” to Something!
“The Position was well put indeed in a famous speech by Jbzl to the graduates of the Central Saturnian University when he said that it was a source of great pride to him that although hardly anybody knew anything any longer, everybody now knew how to find out everything.”
The Hal Draper short story written in 1961 quoted above was sent to me a few days ago by a “Data Guy”, as with many data guys of my acquaintance he has a sense of humour and disarming modesty about the business in which he is assuredly something of an expert and a veteran expert at that.
My discussions with my Data guy acquaintance have inspired me to write this post. This post seeks to show that Big Data seduction is a symptom of a larger problem as in Jbzl’s famous Speech “although hardly anybody knew anything any longer, everybody now knew how to find out everything.”
First some broad definitions. Data is information about something and metadata is information about information. More briefly Data about data is several steps removed from something. Let’s assume that the Something of interest is all of our own favorite subjects ourselves I will refer to our collective selves as “Citizens”.
As Citizens, we want some measure of certainty and security to several necessary things, including Food, Energy, and borders( both personal and national), These requirements are manifested in each citizen’s lived experience daily, one sees what’s on the shelves at the shops, the cost of the monthly or quarterly energy bill. As citizens, do we wish to present data to the Government which drives their policy, or do we agree that our government should be Data-driven to the furthest extent of the current fashion? This poses the question At which point should the Data be taken as an input, indeed should it ever be taken as an input? These two additional questions are also key, should we do;
Data as if Citizens Mattered?
Data as a new Speculative asset class?
There are two Big Data areas that I think will soon become very central to the lives of all Citizens. These are Central Banks Digital Currencies and transnational digital identification systems. Aadhaar in India was blogged about my friend Ranjan at London Conversation the other day. Aadhaar is the first implementation that seems to be integrated with crossover banking/government services functionality. Aadhaar has its critics and Ranjan’s blog points to their criticisms which can be heard in their own words, for me, I take their words as a timely warning against the Big Data Snake oil jamboree which portends more towards a New Speculative asset class than an application of Data insights to formulating solutions to problems with the primary objective to do this as if Citizens mattered.
“That it was not about identity, but about identification, about being identified —
and being identified by people other than yourself.
And the ubiquity was about peopling the numbers —
you know, every database being populated with the number
and universal was making the project develop in such a way
that every person would feel compelled to have it and that
you can’t survive without it and therefore you can get onto the database.
And that that would be the shape that the project would take.
It was clear from the beginning that the people who would suffer the most
in this in terms of immediate and direct effect would be the poor!”
[SUNIL ABRAHAM] The the first area of broad concern
is the use of biometrics in the [Aadhaar] project
which is technology that is perhaps more appropriate when it comes to
police surveillance or law enforcement purposes,
but really not an appropriate technology
when it comes to the implementation of e-governance projects.
On the Central bank digital currencies side of the Big Data snake oil jamboree this from my Data Guy.
“I would ask you to look at what the bank for International settlements are currently working on”.
(Special Thanks: Raphael Auer, Codruta Boar, Jon Frost, Henry Holden, Ben Dyson, Anneke Kosse,
Thomas Lamar, Tara Rice, Takeshi Shirakami, and Thomas Nilsson.) (ed. Ben Dyson the founder of Positive Money in the UK namechecked in this publication, see this post )
mBridge project builds on initial experimentations from the Hong Kong and Thailand central banks
Platform can be an alternative to complexities and inefficiencies of the correspondent banking system
Joining up national digital currencies in common interoperable platforms, offer central banks a technological clean slate
“Inthanon-LionRock to mBridge: Building a multi CBDC platform for international payments. Joint report by the BIS Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China and the Central Bank of the United Arab Emirates.”
Section 3.3.3 Data privacy protection
” A data protection policy will be created outlining how data is to be classified”
Project Ellipse is a proof of concept (POC) launched by the
(BISIH) to explore how supervision could become insights-based and data-driven using an integrated regulatory data and analytics platform.
If a common data standard was agreed to and implemented, financial institutions may no longer need to interpret reporting instructions and submit aggregated data by use case; and With additional logical instruction based on the same data model, supervisors may also be able to automatically query the underlying transaction data and generate regulatory metrics referencing that standardized data.
E) Cross-Border Data Model using Retail Mortgage Loans
I find nothing remarkable in what the BIS has been working on my only comment would be that it is at a very intermediate level as presented in the online materials. The Big question that remains unanswered is what is all of this for?
As citizens, we should ask, what is the point of this and what useful purpose are you the Bank of International Settlements serving with these “Innovations”?
Someone who has been asking these question of The BIS and other Banking institutions is Per Kurowski.
OCTOBER 18, 2021
Martin Wolf, again, any good economic plan needs, sine qua non, to get rid of bank credit distorting regulations.
Sir, I refer to Martin Wolf’s “Without an economic plan, patriotism is Johnson’s last refuge” FT, October 18, 2021
In Martin Wolf’s Economist Forum of October 2009, FT published an opinion I titled “Please free us from imprudent risk-aversion and give us some prudent risk-taking” (The link is gone, I wonder why)
In that article, commenting partly on the 2008 crisis, I held that getting rid of the risk weighted bank capital requirements, that which distorts the allocation of credit to the real economy, was an absolute must.
Now, 11 years later, I must still insist in that, without doing so, there’s no economic plan that can deliver sustainable results.
FRIDAY, DECEMBER 3, 2021
How do you regulate a regulator’s algorithm?
Sir, I refer to your opinion “Want to regulate ‘the algorithm’? It won’t be easy” Washington Post December 3, 2021, in which you discuss the thorny issue of how to regulate social media in general and Facebook in particular.
Regulators, like the Federal Reserve, de facto also use an algorithm, the risk weighted bank capital requirements. This one determines how much capital/equity banks need to hold and, by its incentive of allowing more or less leverage of bank capital, influences how credit is allocated to the economy.
Let me list a few of too many worrisome aspects of that algorithm:
That what’s perceived as risky is more dangerous to bank systems than what’s perceived as safe
That bureaucrats know better what to do with taxpayer’s credit than e.g.., entrepreneurs with theirs.
That banks should refinance much more our “safer” present than finance our children’s and grandchildren’s’ “riskier” future.
That residential mortgages should be prioritized over small business loans.
How did we get there? My briefest answer: Groupthink by deskbound members of a mutual admiration club. Anyone who has walked on main-streets would e.g., understand that the real risks are conditioned to how risks are perceived, signifying assets can become very risky by the sole fact of being perceived very safe.
John A. Shedd, in “Salt from my attic” 1928 wrote: “A ship in harbor is safe, but that is not what ships are for”. Sir, I submit that goes for banks too. Try to ask current regulators about the purpose of our banks.
PS. Rachel Siegel wrote on December 3 “Biden’s pledge to bring ‘new diversity’ to Federal Reserve to soon be tested” I just hope the true meaning of diversity is really understood.
Saturday, July 20, 2019
Without freeing Venezuela from its centralized oil revenue curse, Venezuelans will only live in somebody else’s business
Too many leaders around the world keep a Che Guevara shirt in their closet. Therefore whenever Venezuela’s tragedy is framed in terms of socialism… like well fed Pavlov dogs, many of them react instinctively with a: “then it cannot just be so bad”.
That makes it harder for us who need to get rid of the current odious regime and urgently build a better future.
The truth is that Venezuela lives under the yoke of immense natural resource revenues, which are centralized and managed by some few redistribution profiteers.
Some years those revenues have signified 97% of our entire nation’s exports, something that would negate a free capitalistic market anywhere.
What we need, in order to at last live in a nation, and not in somebody else’s business, is oil revenue sharing.
“Socialism…then it cannot just be so bad”? During the corrupt, inept and human rights violating regimes of Hugo Chavez and Nicolas Maduro, Venezuela’s poorest 40% got less than 15% of what they would have received had oil revenues been shared out equally to all.
If we are doing big data, don’t overthink the Big Data. Claims of the efficacy of Big Data are bogus as they are for the use of any Tool applying the rule of the hammer. Famously by that rule every problem begins to look like a nail and certainly can only be treated as a Nail. Big Data is becoming an end in and of its self, everyone knows we need more big data if we are to solve the problems only Big Data can solve. Big Data is at best a diagnostic tool another set of analog tools and remedies always have to be mobilised to solve real flesh and blood problems IRL ( in real life) And that is why Big Data is the fools gold busily fooling the worlds Technocratic ( Big Data Junkie) Corporate and Government leaderships.