Oh Really Newt? When You Gonna Bomb Google?
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2019-09-23 07:00 by Karl Denninger
in Technology , 175 references Ignore this thread
Oh Really Newt? When You Gonna Bomb Google?
[Comments enabled]

Oh, how nice Newt....

The main reason is that virtually every American is a target.

In a world where just about everyone has a cellphone, laptop, or other device (which connects to a Wi-Fi network that many other people are connected to) it can be relatively easy for a thief – or attacker – to gather a tremendous amount of valuable information.

Imagine the amount of valuable intelligence that passes over the Wi-Fi networks of Washington, D.C., coffee shops – or even the networks at government buildings. It only takes one weak link in a security chain for a hacker to get access to those networks and the information passing through them.

Oh, you mean like how Android phones do this all on their own even without a SIM card in them and in Airplane mode?

I bet Apple phones do too.

And as soon as you connect them.... they send all that data home to Mommy.

"Hardened"?  You're joking, right?  Even when not signed into a Google account this data is collected.  Even when the phone is in airplane mode -- it's collected.  These devices intentionally, without any apps loaded, will and do create a profile of everywhere you go, all the time.

The cellular companies get the data too -- and they keep it.  So do the makers of the devices (e.g. Google) and they keep it.

Oh, they'll say they don't, but they do -- otherwise how would they have it on a device that's not connected to an active account?

It's trivially easy to prove that, by the way.  You stick a "man in the middle" WiFi network in there, the phone thinks it's talking to someone it's really not, it hands over the data and you then decode it since you have the encryption keys. Voila.

Do you think these firms are honest about the level of data they collect?  No.  Do you think it's really "de-personalized" to a degree that it doesn't identify a specific person?  Uh, no -- do you sleep in the same place most nights?  Go to the same place to work?  How many people have that exact pairing of places and how many data points do you think it requires to specifically identify you and, once you've got that done, all forward and retrospective "pings" with that ID are tied to a PERSON.

This is just sold for "advertising" purposes, right?

Do you believe that?

Then you're really ****ing stupid.

What's the return on advertising dollars?  It has to be extremely high -- because otherwise it's not worth it.  I know this because I used to buy said advertising all the time.  The math works something like this:

It takes about seven "impressions" before someone remembers you and will buy something.  You have to pay for all seven but only the last one actually results in a sale.

The average margin on a retail product at the retail level is about 10%, more or less.  Note that buying a $100 product or service only results in about $10 worth of profit.  So if my advertising results in a $100 sale that is not the correct metric; it is the profit that matters to me, not the gross sale amount.

Therefore if Facesucker has an "average revenue per user" of $25 per quarter per person, or $100 a year, that "revenue" must result in more than $1,000 of spending by each person, on average that would not otherwise take place.

If I'm going to go into Kroger and buy groceries you already have me as a customer; your exposure to me is worth zero.  Now if you can get me to go into Publix instead, then Kroger loses and you win, but if I buy $100 worth of groceries you still only won the $10, not the $100 because that's your profit.

Now remember -- that ARPU is per user.  That is, it encompasses rich, poor, old, young, very young (as in not yet earning their own money), dogs, cats, second accounts under pseudonyms, etc.  A huge percentage of the "accounts" are not real people; they're second identities, your cat Fluffy, etc -- all of whom buy nothing.  Facesucker and Google of course claim to get rid of those (as does Twatter) but all of them have a reason to report users that are not real -- both to advertisers and to shareholders.  The tension thus militates toward fraud, not honesty.

So who are they really selling to?

Well, I can think of a few firms that would really like this data but at least in theory can't "legitimately" use it:

  • Health insurance companies.
  • Drug companies.
  • Hospital conglomerates.
  • Car insurance firms (you don't go to bars, do you?)

and, of course, governments.

Governments?  Oh, certainly.

Did you go to the gun range today?  Last week?  In the last year?  How often?

Did you go into a gun store, even if you didn't buy anything (or you bought something for cash that didn't require a background check -- a magazine, ammunition, a sling, a scope, etc)?

Did you go to church?  Which one?  Is it the one with the crazy Iman doing the preaching?  How often are you there?

Do you frequent places known for drug dealing?  Prostitution?  Hmmmm.

Why do you think these monopolists keep their monopolies and nobody ever forces any of this into the open even when it's a proved fact that these devices do track and do report even when there's no SIM card in them and even when in airplane mode?

Why do you think that these monopolies are allowed to put forward the false narrative like Google did with the last Android update to 10 -- that you can deny location access to individual apps -- you can let them have it only when in use or all the time, including in the background, as some sort of improvement?  It's not -- it's actually a massive screw you and an attempt to stop people from using apps like Tasker to shut off location entirely.  Why?  Because even if the Hoosegow app doesn't have location access except when you're using it the phone still has it turned on and is still sending the data to Google -- just not to Hoosegow -- and even if you remove the SIM it will stash it and send it when it next gets access to a network!  If Google actually gave a flying **** about privacy they'd permit a hard bar on such location data entirely (in other words, it's off at the system levelexcept when the app(s) you permit (including theirs) are specifically empowered for it (e.g. when actively using Google maps to navigate.)   Of course if they did that their ability to collect and sell that data would be irrevocably damaged, and if they claimed they did and got caught lying someone might get sued or prosecuted.

Speaking of suing, why is it always suing?  If I sneak up on your property and shoot pictures of you naked before your bathroom mirror that's actually a crime.  Why isn't this?  Why isn't the abuse of private facts to disadvantage you to the tune of thousands of dollars a year not treated as a felony theft offense with the perpetrators flensed on the National Mall?

I'll tell you why: Every bit of the so-called "economic miracle" over the last two decades has been an extraction or extortion racket.

Virtually all of it.

Back in the 1990s I built a business on connecting people.  I knew damn well where it might lead; we couldn't do it at the time because the computer power and storage capacity required were expensive enough that it wasn't worth it.  To track you and generate $100 in income via sales of that information I'd have to spend more than $100.  It was not profitable and, in that time and with that technology, couldn't be made profitable.

Today instead of a 200 Megahertz processor as a "mainline" higher-end CPU we have 3 Gigahertz processors, or 15 times as fast.  But it's more-impressive than that, when you get down to it since they execute more than one instruction at a time, so the real improvement is more on the order of 30-50x that which was possible 20 years ago.

The premise of more than 4Gb of RAM in such a machine was cause for guffaws.  Today 16Gb is pedestrian in your desktop computer; you typically carry that same 4Gb in your pocket contained in your phone.  It's not uncommon for there to be 128 or 256Gb in the boards of server systems today.

At the time 8Gb SCSI hard disks were quite expensive -- over a thousand dollars each.  Today I can buy an 8 Terabyte disk drive for about $250; in other words, I can buy four drives containing 1,000 times each of that capacity for the same money.  I can also buy solid-state drives that are orders of magnitude faster for random access totaling that same 1,000 times capacity for about the same money.

As a result of all of this it is no longer even slightly difficult to make that data collection, analysis and sale worth it.  Where it used to cost more than $100 to obtain and process data worth $100 now it costs $10 or less.

But such capacity only works at scale.  That is, it's not worth very much if all you have is the times people walk into a Home Depot.  Thus it is very, very important to the government, which really, really wants this data, along with all those "nasty" businesses that operate by extracting and extorting you (insurance, medical care, etc) to promote and protect monopolies including by ignoring 15 USC Chapter 1 which proscribes such conduct and includes criminal, felony 10 year prison term penalties for violations -- penalties that are never imposed on anyone today.

You'll note that the common chestnut in the business and legal world is that "price injury" has to happen for, allegedly, a monopoly violation to exist.  That's false; the statute contains no such requirement.  It's not there because the authors knew damn well that monopolists are really, really good at hiding the price injury away from their activity.  In fact the act of attempted act of monopolization and restraint of trade is per-se illegal -- no price injury is necessary.

Maintaining that fiction and relying on you never going and reading the actual law is critical to these brigands maintaining their power -- including the government itself.  The moment that charade falls away and you figure out that merely by having a Facesucker account you're being screwed out of more than a thousand dollars a year on average is the day you might choose to find your pitchfork and torch -- using the latter to burn these firms (and perhaps the government too) to the ground and employing the former to roast the perpetrators and their protectors over said fire.

Investment Idea: /Long BBQ Sauce by the case.

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