Friday, January 29, 2021

GameStop Stock Mania: Why Everyone Is Talking About It And Many Are Worried

GameStop And The Short Squeeze

THE INDICATOR FROM PLANET MONEY

GameStop And The Short Squeeze

So how has GameStop suddenly become the darling investment of online traders from Reddit's wallstreetbets forum?

As Wired reported:

" 'It was a meme stock that really blew up,' said WallStreetBets moderator Bawse1. 'The massive short contributed more toward the meme stock.' GameStop seemed so utterly doomed that the current situation was actually sort of funny to the subreddit's denizens. Banded together, WallStreetBets members bought in big enough to move the stock."

On Wednesday, a hedge fund called Melvin Capital closed out its short position in GameStop after taking a big loss, CNBC reported. Short sellers profit when a stock goes down.

Another short seller, Andrew Left of Citron Research, said in a video on Wednesday that he had covered most of his short position in GameStop at a loss. Last week, Left had predicted the stock would drop to $20 a share, from $40 at the time.

"I had no idea what that would set off," Left said. "This has captured the attention of ... America and every trader and nontrader alike."

Melvin Capital and Citron were caught in what's known as a short squeeze, forcing the funds to buy more GameStop stock to cover their losses, which ended up driving the stock price even higher. This has happened before, most famously with Tesla stock.

The GameStop rally came after investors saw glimmers of hope for the company this month when the chain changed the makeup of its board of directors.

For those Reddit members, all this isn't just about making money. "There's also kind of a populist thing happening here with a lot of these traders, judging by the Reddit threads. You know, they just want to poke a middle finger at Wall Street," says Paddy Hirsch of NPR's The Indicator From Planet Money podcast.

GameStop's stock symbol is GME. On Reddit, one member of wallstreetbets, wrote early Thursday: "GME is about sending a message. ... For all the recessions they caused. For all the jobs and homes people have lost. For all the people that can't pay for college because minimum wage has stagnated while wall street gets rich. For all the retail traders they left holding the bag. For all the times they got bailed out with our tax money while we got nothing."

Another member suggested that the Reddit traders were part of a resistance movement of sorts, writing, "[T]his is not a war on billionaires, the wealthy yada yada, but it may well be described as a resistance against injustice, inequality, rigged rules, uneven playing field etc which has been rampant on Wall Street forever."

Electric Burn: Those Who Bet Against Elon Musk And Tesla Are Paying A Big Price

BUSINESS

Electric Burn: Those Who Bet Against Elon Musk And Tesla Are Paying A Big Price

A wallstreetbets member, who vowed not to sell GameStop, wrote late Wednesday: "I am proud to be a part of this piece of history with you. ... Call it an opportunity, call it revenge, or justice, I know we are on the right side of thisRep. Alexandria Ocasio-Cortez, D-N.Y., a member of the House Financial Services Committee, weighed in on the GameStop phenomenon. "Gotta admit it's really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino," the lawmaker tweeted Thursday.

And it hasn't stopped with GameStop. Other companies that are suffering heavily during the pandemic are seeing their shares soar as people on Reddit's wallstreetbets talk them up. The companies include AMC Entertainment, the beleaguered theater chain, which shot up more than 300% on Wednesday (before dropping 56% Thursday), and American Airlines, which soared more than 30% Thursday morning (it closed up 9%).Robinhood, a popular trading platform for young traders, announced Thursday that "in light of recent volatility" it was restricting transactions for certain securities, including GameStop and AMC, and raising margin requirements. It later said it planned to allow "limited buys" of these securities, starting Friday.

Thursday, January 28, 2021

Surveillance And Local Police: How Technology Is Evolving Faster Than Regulation

These things are small cameras that attach to police cars that you really wouldn't see unless you were looking for them. There's sort of little flat cameras either on the front or on the roof of the police car, and what they do is as they pass, they capture an image of each license plate and they translate that image into just plain letters and numbers. They log the geospatial data. So where the car was and what time it was observed and it goes into a database. And so, again, the issue with that is one of scale.

There is nothing illegal about the police noting the license plate of cars parked in public, where they were parked when they were parked there. But if you look down your street and you saw a police officer writing down every license plate all day, every day, you might wonder why he was doing that. A police department, if they had to assign people to do that, might wonder whether it was worth the manpower to have someone just noting down license plates.

On the lack of regulation of ALPR data collection

I'm not suggesting in writing about the dangers of ALPRs that we eliminate them, because it does help find stolen cars. It does help find cars used in crimes. The issue is what about the 99.99 percent of cars that aren't involved in crimes? What do you do with their data?

States have wildly different laws on how long that data can be kept. In New Hampshire, for instance, if the car is not associated with any crime or is not being looked for, then you've got to delete it within three minutes. There are other states that set 24-hour limits, but there are a lot of states that set no limits at all and they just throw these pictures into a huge database. Often those databases are poorly secured. So in 2015 there was a journalist who just stumbled onto the Boston Police Department's entire database of ALPR data. It's that sort of thing, the collection at scale, the lack of regulations over how long that information is kept — and often the lack of security over how it's kept — that combined to make these sorts of technologies really worrying.

On "ShotSpotter" technology, designed to detect gunshots and dispatch police

ShotSpotter is an acoustic sensor designed to detect the sound of gunshots. I saw these in place in Newark, N.J. They often look like little white diamonds or rectangles up on traffic light poles, and they're trained to recognize what ShotSpotter calls "loud, impulsive sounds" between 120 and 160 decibels. When it does hear such a sound, it sends an alert to the ShotSpotter headquarters where a human listens to it and figures out, was that a gunshot? Was it a car backfiring? When I was at ShotSpotter's headquarters in California, there was an alert caused by a truck, Jake Brake, the engine brake that releases a tremendous amount of sound quite quickly. Once it hears a gunshot, it notifies the local police department. It tells the police department how many shots, where, when, and it essentially can dispatch officers to the scene of a suspected shooting.

On suspicion in communities about ShotSpotter and the importance of how these technologies are rolled out

Here's what I think is interesting about ShotSpotter: As I was reporting this story ... a lot of people believed that this sort of technology was being used to overhear private conversations. Now, I think that is extremely unlikely. To my knowledge, there's never been a case that's been brought based on a conversation overheard by ShotSpotter. Every police department, everyone from ShotSpotter said it doesn't hear conversations. It's trained to recognize loud, sudden sounds. That's not how people talk.

But [this is] an instructive lesson in how deploying technology can be used to improve or worsen relations between police and the communities they police. I think that in too many instances, police departments approve the purchase of ShotSpotter and deploy them without doing the work of going into communities they police and saying, "Listen, this is what's going off in these traffic lights. Here is how it works. It doesn't hear conversation. Here's how we know it doesn't hear conversation. If you have any questions about it, please come and talk to me," as opposed to just citizens who often come from communities that have a long history of distrust with police built up over years for valid reasons, as opposed to those communities just seeing another piece of tech up there.

Technology is not good or bad in itself, but police have to be very careful about how they roll it out, and have to go out of the way to gain the trust of the public, particularly in those communities that have a long history of distrust of the police.

If you were a citizen of color who lived in a community that had a long history of distrust with police and all of a sudden the police said this hears gunshots, you might think to yourself, what else does it hear? ... Technology is not good or bad in itself, but police have to be very careful about how they roll it out, and have to go out of the way to gain the trust of the public, particularly in those communities that have a long history of distrust of the police.

On the "Stingray," or IMSI Catcher (international mobile subscriber information), that collects phone data, similar to a cell tower

A Stingray mimics a cell phone tower and it gets your phone to connect to it. And what happens then is that all of the metadata on your phone, that is the non-voice call data can then be read, and that includes texts you might send websites, you might browse who you called and how long you talked for, even without knowing the actual substance of the conversation ... [It] connects to the phone ... and it geolocates you. ...

Your Smartphone Is A Crucial Police Tool, If They Can Crack It

ALL TECH CONSIDERED

Your Smartphone Is A Crucial Police Tool, If They Can Crack It

Can Police Track You Through Your Cellphone Without A Warrant?

POLITICS

Can Police Track You Through Your Cellphone Without A Warrant?

Increasingly, it's deployed by court order, but that hasn't always been the case. And what happens is even when deployed by court order against a specific subject, the data from every other phone in that area is hoovered up. Now, again, this happens on a stakeout, too. If the police are staking out a suspect, they see all kinds of people walking past. The difference is they don't retain the data from all those people walking past in the case of data hoovered up by Stingrays, that often does get kept for longer than it should. And again, this is an issue in which there's no question that Stingrays can help police catch serious criminals. But there just needs to be some regulations over when they can be used and what happens to the data hoovered up incidentally, during those stakeouts.

On the problem with predictive policing programs that use data to determine where to deploy officers

How Data Analysis Is Driving Policing

CRIMINAL JUSTICE COLLABORATIVE

How Data Analysis Is Driving Policing

Predictive policing programs ... are programs that ingest an enormous amount of historical crime data and say, based on the data, based on past practice, these are the areas that we think are likely to be at elevated risk for crime today. So this is where you need to deploy your patrol officers. My concern about that is that historical crime data is not an objective record of all crimes committed in a city. It is a record of crimes that the police know about. And given the sort of historic pattern of overpolicing minority communities, overpolicing poor communities, these programs run the risk of essentially calcifying past racial biases into current practices.

On the justifying of invasive technologies because they're effective

The question is: Is it worth the cost to our privacy and liberty to implement this technology? And if so, what limits are we willing to set? What penalties do we want for failing to observe these limits?

I want to make one point about efficacy as justification: There are a whole lot of things that would help police solve more crimes that are incompatible with living in a free society. The suspension of habeas corpus would probably help police solve more crimes. Keeping everyone under observation all the time would help police solve more crimes. Allowing detention without trial might help the police solve more crimes. But all of these things are incompatible with living in a free, open, liberal democracy.

So when we think about these technologies and what we are willing to accept, we shouldn't just think about whether to help police solve more crimes, because almost all of them will — at least on the margins. The question is: Is it worth the cost to our privacy and liberty to implement this technology? And if so, what limits are we willing to set? What penalties do we want for failing to observe these limits? So it's really a question not just of whether the technology works, but is it worth the cost? And if it's not worth the cost, can we devise a way in which the police can have the tool that they want to solve crimes and we can be comforted that it won't be abused, it won't be used against us, it won't be used to surveil us.