CAIRO (Reuters) – Egypt’s parliament passed a law on Monday regulating ride-sharing apps Uber and Careem, potentially ending a lawsuit that could shut them down in one of their biggest markets but imposing new fees and data sharing requirements.
FILE PHOTO: Employees work inside Uber’s Centre of Excellence office in Cairo, Egypt October 10, 2017. REUTERS/Amr Abdallah Dalsh/File Photo
Legalising the increasingly popular ride-sharing services became urgent in March when an Egyptian court ordered their suspension after a group of taxi drivers filed a suit, arguing they were illegally using private cars as taxis.
Another court last month stayed that ruling, allowing U.S.-based Uber and its Dubai-based competitor Careem to continue operating while the case is appealed. A higher court is expected to hear the appeal later this week.
Uber has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services. It has been forced to quit several countries, such as Denmark and Hungary.
Uber has said Egypt is its largest market in the Middle East, with 157,000 drivers in 2017 and 4 million users since its launch there in 2014.
The new law stipulates that ride-sharing companies obtain five-year renewable licences for a fee of 30 million Egyptian pounds ($1.71 million) and that drivers pay annual fees to obtain special licences to work with the company.
“This is a major step forward for the ride-sharing industry as Egypt becomes one of the first countries in the Middle East to pass progressive regulations,” Uber said in a statement.
“We will continue working with the prime minister and the cabinet in the coming months as the law is finalised, and look forward to continuing to serve the millions of Egyptian riders and drivers that rely on Uber.”
The law also requires the companies to retain user data for 180 days and share it with authorities “on request” and “according to the law,” according to a copy of the law reviewed by Reuters.
An earlier draft of the bill had called for real-time data sharing by the companies, but that prompted some opposition in parliament due to privacy concerns.
The law must now be ratified by President Abdel Fattah al-Sisi.
Uber said last year it was committed to Egypt despite challenges presented by sweeping economic reforms and record inflation. In October, Uber announced a $20 million investment in its new support center in Cairo.
It has had to make deals with local car dealerships to provide its drivers with affordable vehicles and adjust its ride prices to ensure its workers were not hit too hard by inflation.
($1 = 17.5900 Egyptian pounds)
Reporting by Nashaat Hamdi, Mahmoud Mourad, and Eric Knecht; Editing by Mark Potter
(Reuters) – Uber Technologies Inc [UBER.UL] said Monday it has hired a former National Transportation Safety Board (NTSB) chairman to advise the company on its safety culture after a fatal self-driving crash in Arizona.
The Uber logo is displayed on a screen during the Women In The World Summit in New York City, U.S., April 12, 2018. REUTERS/Brendan McDermid
Online news outlet The Information reported Monday that Uber has determined the likely cause of the fatal collision was a problem with the software that decides how the car should react to objects it detects. The outlet said the car’s sensors detected the pedestrian but the software decided it did not need to react right away.
“We have initiated a top-to-bottom safety review of our self-driving vehicles program, and we have brought on former NTSB Chair Christopher Hart to advise us on our overall safety culture,” Uber said Monday. “Our review is looking at everything from the safety of our system to our training processes for vehicle operators, and we hope to have more to say soon.”
A 49-year-old woman was killed on March 18 after being hit by an Uber self-driving sports utility vehicle while walking across a street in Phoenix, leading the company to suspend testing of autonomous vehicles. Arizona’s governor also ordered a halt to Uber’s testing.
Uber declined to comment on the Information report. “We can’t comment on the specifics of the incident,” the company said, citing the ongoing NTSB investigation.
The National Highway Traffic Safety Administration is also investigating the incident.
Uber Chief Executive Dara Khosrowshahi said in April the ride-sharing company still believes in the prospects for autonomous transport. “Autonomous (vehicles) at maturity will be safer,” he said at a Washington event.
Reporting by David Shepardson; editing by Jonathan Oatis
Please Note: This article was first published for Income Idea subscribers on Thursday along with additional analysis and implementation ideas. All data in this article is as of 5/2/2018.
I have generally been a fan of actively managed funds where the management team has the flexibility to invest in a variety of asset classes where they best see fit, in line with the investment policy statements laid out in the prospectus documents.
For those reasons, many of my client portfolios will typically include a “strategic income” fund of some sort for fixed income investors. This could be either an open end mutual fund, ETF or a unit investment trust (‘UIT’).
Such fund typically outperform over longer periods of time however you do run into the issue where generally speaking “strategic” = “junk bonds.” This applies to both taxable and tax free fixed income.
Where these funds are great however is that during flat or uncertain fixed income markets, by investing in go anywhere fixed income funds you are giving up that investment decision to the portfolio manager whom you believe has a better read on the market and more importantly is able to find those opportunities which neither you or I have access to as individuals.
Perhaps the most well known of such funds is the PIMCO Dynamic Credit Income Fund (PCI) which I wrote about in “PCI – Not For Me.” My issue with the fund was that as great as it is performance wise there is a very hefty price, the lack of transparency around certain aspects and the exceptionally high leverage and fees.
Another fund that fits this bill and sponsored by one of my favorite managers is the Guggenheim Strategic Opportunities Fund (GOF). While I have looked at it a number of times for myself, I have never written about it or invested in it myself for the simple reason that I do not buy CEFs at a premium.
I did have a number of readers ask me about the fund and that is why we are taking a deep dive into the fund today, particularly as it may be just the recipe for the uncertain fixed income markets of tomorrow.
Investment Objectives: The Fund seeks high total return through investment in US Government and agency issued fixed income debt and senior equity securities, corporate bonds, mortgage and asset backed securities and through utilizing an options strategy
Number of Holdings: 377
Current Yield: 10.44% based on market price, monthly distributions
Inception Date: 7/27/2007
Discount to NAV: 8.78% PREMIUM
Sources: CEF Connect, Guggenheim Website, and YCharts.
The Sales Pitch
For whatever reason the fund does a horrendous job on its website and in its marketing material to set the case for investing in the fund.
On one hand, they do not need to as the fund only raises capital at its IPO or during follow up offerings but still…. why not put up a few graphics or paragraphs outlining why investors should consider it?
Since the fund fails to do that job, I will attempt to.
As I stated in the introduction, I am a fan of go anywhere investments, especially when they can give you uncorrelated investment exposure.
A Closed End Fund structure further lets the fund use leverage and due to its structure, management does not need to have money allocated to cash for any redemptions which occur with open end mutual funds.
The CEF structure also lets you, in most cases, to purchase funds below their net asset value further generating alpha. (Although this has generally not applied to GOF.)
In the fund’s semi-annual report the fund manager does point out that “thorough research and independent thought are rewarded with performance that has the potential to outperform benchmark indexes with both lower volatility and lower correlation of returns as compared to such benchmark indexes.” Source: GOF Semi-Annual Report
The Alpha/Fund Strategy
Unlike in an exchange traded or an open end index fund which follow an underlying index with their generally transparent index methodologies, no such things exist in go-anywhere, actively managed funds.
As such, investors generally rely on the information provided in the prospectus for the fund’s general investment guidelines.
As a true “strategic income” fund, the fund may invest without any limitations in fixed income securities rated below investment grade, aka junk bonds.
The fund may further invest up to 20% in non-US dollar denominated securities, including up to 10% in emerging markets.
What makes the fund relatively unique is that it may invest up to 50% in equities and up to 30% in fund of funds or pass through securities.
Source: GOF Website
One of my personal attraction points to Guggenheim is their strong position in asset backed securities, particularly aerospace.
Even though this is an actively managed go-anywhere fund, it is not overly concentrated. The top 10 holdings make up just 7.98% of the fund.
Source: Guggenheim Website
Looking at the fund more broadly, even though it can allocate up to 50% to equities, the fund is currently 80% allocated to fixed income with just a bit over 15% allocated to common stocks.
Source: Guggenheim Website
Breaking it down further shows us that more than half of the fund is allocated to floating rate bank loans and ABS, or asset backed securities. In general, these are below investment grade.
Source: Guggenheim Website
High yield bonds add another 14% while investment grade corporate bonds are just under 5% of the fund.
This obviously shows up in the credit quality. More than 90% of the fund is either rated at or below BBB or not rated. More than 70% is either below investment grade or unrated.
Source: Guggenheim Website
Unfortunately due to the nature of the fund and the fund’s decision, Guggenheim does not publish some common statistics such as the average effective maturities and durations. From the transparency side this is a disservice to investors and I hope the sponsor changes it in the future.
The only reference to duration which I found was in the semi-annual report.
Source: GOF Semi-Annual Report
Guggeneheim does disclose that the fund had an average duration of about .7 years which is quite good. We do not however know whether that was leverage adjusted or not.
In either case, what this means is that for a 1% rise in interest rates, the fund’s NAV should be expected to decline by just .7%. If we have to adjust for leverage it would be closer to 1%.
The opposite is also true if interest rates decline.
Looking at the risk data we can find a 5 year beta of .997. This implies that the fund has essentially been as volatile as the underlying markets.
The maximum draw-down which the fund experienced was 54.69%, likely during the closed end fund sell off in 2007/2008 when the leverage markets dried up and funds were forced to liquidate.
Looking at the risk adjusted metrics, the fund has achieved a 10 year Sharpe ration of .7935 and a Sortino ratio of .6941. While these are not mind blowing… for a closed end fund of this nature it is quite good.
Like most closed end funds, the Guggenheim Strategic Opportunities Fund(GOF) uses leverage.
The fund uses two primary methods for obtaining leverage.
First, the fund uses reverse repurchase agreements whereby it pledges its investments through transactions creating leverage.
As of November 2017, the fund had $58 million in reverse repurchase agreements with its syndicate of banks on which it paid an average weighted interest rate of 1.85%. These costs would be higher today.
Source: GOF Semi-Annual Report
The second source of leverage is a traditional credit facility with a lender.
GOF has an $80 million credit facility on which it pays a borrowing rate of .85% over 3 month LIBOR. On this line as of the end of November the fund had just $2 million outstanding as it had paid down the majority of the credit facility.
Source: GOF Semi-Annual Report
What is important to note here is that most of the CEF leverage which we have looked at is typically a spread of .7% to 1.2% over 1 Month LIBOR. In the case of GOF it is 3 month LIBOR which is a higher rate.
While generally this was a small spread, the gap is now close to .5%! As such, the fund’s current borrowing costs on this credit facility would be over 3%!
Fortunately it seems that Guggenheim is employing some smart people to run the fund, namely Scott Minerd who has been quite critical of the markets. As such, the fund has been deleveraging as of late.
Source: GOF Semi-Annual Report
The fund is currently distributing a market price distribution yield of 10.44% and is trading at a PREMIUM of 8.78% to its NAV, or net asset value.
Source: CEF Connect
Over the previous year the fund has continued to trade at premiums although it did come very close to parity earlier this year.
Generally speaking, the Net Asset Value has failed to grow beyond its initial IPO even though there is a growth component. THIS IS QUITE CONSISTENT with the findings of the distribution analysis. A few good years bail out many bad years however there has not been meaningful growth.
Looking back over the fund’s lifetime, we can see the fund has generally traded at a premium over the previous 7 years or so however did trade at a discount in 2015/2016 and during the financial crisis when it was trading at close to 30% discounts to NAV. This is once again consistent with “junk bonds.”
Performance wise, year to date the fund has been sold off with most other CEFs. The fund is up a mere .21% on a total return basis accounting for the distribution. The price per share is down 3.27% while the NAV is down 3.04%.
Do note at the price vs NAV action early this year when the fund was thrown out and decreased 9%. This is a risk to buying a fund which is trading at a premium as any sustained sell off turns premiums into discounts, adding more misery to the underlying losses.
Over the previous year the fund did give investors a 10.28% total return. This came strictly from the distribution. The underlying price per share is down .6% while the net asset value fell 2.89%. Over distributed? AHA!
Over the last 3 years the story remains the same. The fund presented investors with a 36.17% total return while the price fell 2.9%. The underlying NAV declined 2.5%. A good 2016 bailed out the fund’s track record during this time.
Over the previous 5 years we have precisely the same story. The total return was all about the distribution. The underlying price per share declined 9.28% while the NAV declined 8.99%.
Going back 10 years would have you purchase the fund near the lows of the financial crisis. AS such, the fund has achieved phenomenal results. The fund would have a 270.8% total return (if reinvested). The price per share increased 24.11% while the NAV grew just 8.5%.
Since inception the numbers are not as good. The total return declines to 233.8% with a 4.38% price per share gain and an essentially flat NAV.
The moral of the story, the fund did a PHOENOMINAL job coming out of the financial crisis but it was quite volatile and since 2011 or so, has not grown its NAV in the greatest bull market yet.
Should have? Want signs of over distribution? Plain vanilla (AGG) and (MUB) grew their NAVs during this time.
To put the fund into perspective, we will take a look at the fund against a number of competing products, both levered and unlevered.
As far as “go anywhere” type funds, there are a number of competing closed end funds such as the BlackRock Multi-Sector Income (BIT), the PIMCO Dynamic Credit Income (PCI), and the DoubleLine Income Solutions (DSL) funds. PCI is managed by the PIMCO team and the DoubleLine fund is a representation of the famed Jeffrey Gundlach’s ideas.
I also wanted to take a look at how it does against a covered call fund such as the BlackRock Enhanced Global Dividend fund (BOE).
Lastly we can take a look at two unlevered open end funds, the Fidelity Strategic Income (FSTAX) and the PIMCO Total Return (PTTAX) funds.
Year to date on a total return basis we can see that generally speaking, GOF has lagged for most of the year and was actually the most impacted during the sell off in February. It has since rebounded and comes in the middle of the pack. For the year however (PCI) and (DSL) have been the best performers.
If we look over the last year we can see (GOF) has beat most of its peers coming in behind PCI. Interestingly (BIT) lead the way until the sell off this year. Also of note, even though also PIMCO managed, the open end Total Return Fund was the worst performer.
Over the last three years we have a similar story. PCI lead the way followed by GOF, DSL and BIT.
The equity focused BOE lags and is followed by the two open end funds which were quite stable. In either case, the Fidelity fund handily outperformed the PIMCO Total Return fund.
Looking back 5 years we essentially have PCI and GOF leading the way, followed by (BIT). The high performing DoubleLine fund however comes in at the bottom of the CEF pack simply due to its horrible performance in 2015.
Once again it shows the importance of risk management. It is not as import as to how much you make, and it is more important to focus on how much you DON’T LOSE!
This is ever so important for buy and hold investors.
To get a 10 year number we only have the (GOF) and (BOE) closed end funds along with our two open end funds. This is critical but we do not have any idea how (PCI), (BIT) and (DSL) would perform during a financial crisis.
As we can see, the two closed end funds were decimated during the crisis. While GOF recovered, BOE never did. In fact, the plain vanilla open end Fidelity income fund would provide better total returns than an equity CEF fund.
Overall, GOF has been a good fund especially if we consider that it has been generally less levered than its peers. More importantly from the risk management perspective the fund is leading the way in delevering while its peers are increasing their leverage to maintain the distribution level.
Guggenheim is an experienced manager and if you want to capitalize on and follow Scott Minerd, (GOF) is a way to do so. Here is a good article on Scott Minerd’s recent thoughts.
From the pricing side, it is very tough for most closed end fund investors I know of to justify purchasing it today, or even keeping it if you already own it.
Over the previous year the fund traded at a premium to NAV of as low as .62% to as high as 11.33%.
Source: CEF Connect
As we can see, the current 8.78% premium to NAV is quite expensive over EVERY measured time period and the Z-Score solidifies that. The right time to buy it would have been earlier this year when it was trading at near parity.
Source: CEF Connect
Overall it is certainly a peculiar time for funds like GOF, PCI and DSL.
I think a great way of thinking about them is like dating a super model. Yes, they look really pretty and you have a great time dating and you get lots of envious looks. But are they the people you believe would end up being terrific soul mates to live together and raise a family?
GOF, PCI, DSL and other high yield junk bond funds have certainly become the “popular guy/gal” and people are paying premiums for them. At the same time, high quality funds and munis have been left at the alter.
Yes, they have performed exceptionally well in a terrific bull market for both fixed income and equities, but so did the housing market in the early 2000s.
The “crazy” part comes in where on one hand we see premium prices for those funds, yet the underlying fundamentals are either turning or completely falling apart such as the distribution coverage with GOF and others.
Of course, I once again have to remind, a distribution is not a dividend and you have to take an underlying look at how the fund is doing.
Bottom line, this is certainly a fund worth owning, but perhaps when the prices are quite a bit better and we have another opportunity to buy in ONCE the tornado comes through.
In the mean time, the BlackRock Multi-Sector Income Fund (BIT) will let you play in the same space at a far lower cost, a 10% discount versus an 8.78% premium and while I have not looked at it yet, the underlying distribution coverage can’t be as bad as (GOF)?
For more information on the fund, please visit the fund’s website at Guggenheim – GOF.
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Good morning and happy cyber Cinco de Mayo, dear readers.
I received an abundance of thoughtful responses to my essay on rejecting consumer DNA tests last weekend. In lieu of a column, I’ve reproduced a selection of the several dozen well-considered comments that landed in my inbox. I hope you enjoy the variety of perspectives and insights as much as I did. (I have stripped out the identities of the authors—for privacy reasons, of course.)
KA: “While I understand your reticence, I believe as a human race we need to share genomic and other data to move forward. I’ve been in the precision medicine space for 18 years, and the only way to see it reach maximum potential is if we break down silos for information sharing globally.”
EM: “I think it is likely too late for you to refuse. It is most likely that a relative of yours—whether close or distant—has already chosen to test his or her DNA, and has shared the extended family tree that includes you.”
MP: “I don’t blame you. I do however believe that sooner or later we all will have to do it if only to have access to future healthcare (personalized medicine is coming faster than anyone thought would) and that somewhere a national genetic repository will soon exist.”
KS: “I was a fencesitter veering towards disagreeing until I read your mention of TOS [Terms of Service]. Decoding TOS can often be harder than decoding the DNA. DNA Testing is simply not worth the effort. So, now I agree!”
ML: “I did ancestry.com about a year ago and have had several moments of regret since—especially on the heels of this story. Maybe I’m a little paranoid too but I often think about what things could look like if someone like Hitler had access to our DNA records. Yikes.”
JP: “I can think of no more elegant way for the NSA (or similar group) to collect DNA information on millions of people than to own one of the ‘23 and me’ type companies.”
JR: “Just take the implications of this data in the hands of a totalitarian government, a greedy and maligned corporation, a foreign power. Bad, bad, bad.”
EF: “Everyone keeps asking me why I don’t want to know my ancestry and now I will forward them this newsletter.”
In case you didn’t catch last weekend’s essay (or EF’s forward), you may read the piece here. Thank you to everyone who wrote in and offered an astute viewpoint, personal experience, or opinion. What a pleasure it is to have so many attentive, engaged subscribers to this newsletter. I wonder if there’s a gene behind that.
Welcome to the Cyber Saturday edition of Data Sheet, Fortune’sdaily tech newsletter. Fortune reporter Robert Hackett here. You may reach Robert Hackett via Twitter, Cryptocat, Jabber (see OTR fingerprint on my about.me), PGP encrypted email (see public key on my Keybase.io), Wickr, Signal, or however you (securely) prefer. Feedback welcome.
The United Kingdom’s Information Commissioner’s Office issued an order Friday requiring SCL Elections, the British affiliate of the controversial data mining firm Cambridge Analytica, to turn over all of the data it collected about a United States-based academic named David Carroll. Carroll filed a request for this data in January of 2017 under British data protection law, and received a response in March of that year that the Information Commissioner Elizabeth Denham describes in the order as “wholly inadequate.” Now, Denham is requiring SCL to comply with the request, or face criminal charges.
The enforcement order comes just days after Cambridge Analytica, which worked for Donald Trump’s 2016 campaign, announced that it would shut down and declare bankruptcy, along with its international affiliates, following revelations that the companies had harvested the data of up to 87 million Americans without their knowledge. The company’s former CEO Alexander Nix was also recorded this year on undercover video, appearing to brag about using tactics like bribery and entrapment on behalf of Cambridge Analytica’s clients.
Long before the name Cambridge Analytica became notorious in households across the country, though, Carroll, a professor of media design at Parsons School of Design in Manhattan, became suspicious about the way the company built its so-called psychographic profiles of US voters. These profiles, the company claimed, contained information not only about people’s demographics, but their personalities as well. Given that Cambridge Analytica originally spun out of a British company called SCL Group, Carroll filed a request under the UK’s Data Protection Act seeking access to all of the information the company had collected on him.
When SCL sent Carroll back his file, he was utterly unsatisfied. It ranked his interest in topics like immigration and gun control on a numeric scale, but offered no insight into what data was being used to generate those scores, or who actually used them. In mid-March, the same day Facebook announced it was suspending Cambridge Analytica and SCL Group from its platform as punishment for their transgressions, Carroll filed a request for disclosure in the UK in an attempt to force SCL to hand over the underlying data and answer a litany of questions about how they were being used.
Though that case is still ongoing, the ICO’s order does accomplish some of that work for Carroll. In the order, Denham describes the months-long battle between her office and SCL’s office over Carroll’s data request. According to the order, SCL repeatedly argued that as an US citizen, Carroll had no right to request his data under British laws, going so far as to write in one response that Carroll had no more data access rights in the UK “than a member of the Taliban sitting in a cave in the remotest corner of Afghanistan.”
Denham disagreed with that assessment. In March, after the undercover videos of Nix went public, the ICO stormed the company’s offices and seized its servers. Now, the regulator is giving SCL 30 days to provide descriptions of Carroll’s personal data, the purpose that data served, a list of all the recipients of that data, copies of the data itself, and the sources of that data.
“It’s quite exciting,” Carroll says of the order. “At the minimum, it’s the beginning of a victory and pointing toward winning.”
Still, he says, “It didn’t have to come to this. We’ve been trying for more than a year to do this out of court…It just kept escalating.”
SCL now has the opportunity to appeal the ICO’s order. Representatives for SCL didn’t immediately respond to WIRED’s request for comment.
Business figures, government officials, and international magnates invested more than $700 million in an ambitious company promising to revolutionize blood testing—Theranos.
The Wall Street Journal’s John Carreyrou got his hands on previously sealed documents that show just how much capital has sunken with the Theranos ship. The documents are part of a lawsuit alleging that the company made false and misleading claims about its operations and technology while soliciting money from investors. (Theranos has denied the suit’s allegations.) The following groups and individuals have lost a considerable sum of money following their investments:
— $150 million: The Walton Family, heirs to Walmart Founder Sam Walton — $125 million: Rupert Murdoch, executive chairman of News Corp — $100 million: Betsy DeVos & her family, Secretary of Education — $100 million: The Cox family, owners of media properties — $96 million: Partner Fund Management, investment management firm — $70 million: Shareholders who invested through venture funds — $30 million: Carlos Slim, media investor — $25 million: Andreas Dracopoulos, Greek shipping heir — $20: The Oppenheimer family, former owners of De Beers — $6.2 million: Riley Bechtel, former chairman of Bechtel Corp — $1 million: Robert Kraft, owner of New England Patriots (*Not included: Earlier investors who invested nearly $100 million in Theranos before 2013.)
I feel uneasy every time I see a star-studded investor list for a startup that has raised hundreds of millions of dollars. The uneasy factor goes up when you realize none of the investors have deep medical or biotech expertise. Remember when GV’s Bill Maris said the firm passed on investing back in 2013 because it had a lot of questions about the company’s technology?
Maris said, “We looked at it a couple times, but there was so much hand-waving — like, Look over here!— that we couldn’t figure it out. So, we just had someone from our life-science investment team go into Walgreens and take the test. And it wasn’t that difficult for anyone to determine that things may not be what they seem here.”
At Fortune’s 2016 Brainstorm Tech conference, TPG’s David Trujillo made the point that people were simply not doing their diligence. “It’s just taking what a management team says at face value and not being able to follow up with it,” he said. “Part of it is the competitive dynamic of sources chasing opportunity that has created companies not having to share quite as much as they would outside this bubble we’ve been in.”
The hand-waving. The trade secrets. The competitive advantage. The revolutionary technology. For years, Holmes successfully dazzled investors, reporters, and the public.
As Fortune has previously noted, the notoriously private company would use the sanctity of trade secrets as an excuse to run an operation shrouded in secrecy. When hundreds of millions of dollars are on the line, however, investors should expect transparency — not slippery and confusing language masquerading as industry jargon.
One Term Sheet newsletter reader asked, “How are these not lessons that [Silicon Valley] should not already know? Do your diligence, understand the tech, don’t accept ‘trade secret’ BS, and check out board oversight.”
As we now know, it was a very, very expensive lesson to learn.
This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers.Sign up here.
Here we go. J.P. Morgan Chase has applied for a patent to facilitate payments between banks using the blockchain.
The patent was originally submitted in October, but the application was made public by the U.S. Patent and Trademark Office on Thursday. It outlines a system that would essentially use distributed ledger technology, such as blockchain, to keep track of payments sent between financial institutions.
In the application, J.P. Morgan notes that cross-border payments require “a number of messages” that must be sent between the bank and clearing houses involved in the transaction. This often results in delays and a restricted availability to the funds. Rather, the transaction on the blockchain would eliminate high costs, provide a system for accurately logging the transactions, and process payments in real time with a verifiably true audit trail.
This may come as a surprise given J.P. Morgan CEO Jamie Dimon’s tirade about Bitcoin several months ago, suggesting the cryptocurrency is “a fraud” and that he would fire any employee trading Bitcoin for being “stupid.”
But Dimon was careful to distinguish between cryptocurrencies and the blockchain because, well, J.P. Morgan has actually built its own blockchain on top of Ethereum. The bank is also one of 86 corporate firms to play a role in forming The Enterprise Ethereum Alliance, an open-source blockchain initiative. The idea of the EEA is for big banks and tech companies to come together and build business-ready versions of the software behind Ethereum, a decentralized computing network based on digital currency.
The patent filed in October is reminiscent of another Bitcoin-style payment system J.P. Morgan tried to patent in 2013. Although the patent was reportedly rejected, it’s fascinating to see the bank lay out some of the problems with the existing payment structure. For instance, “Furthermore, to date, there is no efficient way for consumers to make payments to other consumers using the Internet. All traditional forms of person-to-person exchange include the physical exchange of cash or checks rather than a real-time digital exchange of value. In addition, the high cost of retail wire transfers (i.e., Western Union) is cost prohibitive to a significant portion of society.”
Apple Watch is being credited for saving a New York man’s life.
While he was working at his family’s bowling alley business Bowlerland last month, 32-year-old William Monzidelis became dizzy and started bleeding all over his body. Soon after, the Apple Watch he was wearing sent him a notification to immediately seek medical help.
On the way to the hospital, Monzidelis started to have seizures and by the time he arrived at the hospital just 30 minutes later, he had lost 80% of his blood, according to NBC New York, which earlier reported on the harrowing story. Emergency personnel discovered he had suffered an erupted ulcer and would need a blood transfusion just to have surgery to correct it. Doctors performed the surgery and he survived.
According to Monzidelis, who was interviewed by NBC New York, the doctors told him that if he didn’t receive the Apple Watch notification, he would’ve died.
Although the Apple Watch isn’t classified as a dedicated medical device, it has an increasing number of features aimed at monitoring a person’s health. Chief among its health-focused features is a tracker that will monitor a person’s heart activity and alert them when something is off. When Apple Watch identifies a problem, it sends an urgent notification that tells people to seek medical attention.
Monzidelis’ story isn’t unique. Earlier this week, in fact, ABC News reported that the Apple Watch saved the life of an 18-year-old woman after it recognized that her resting heart rate had jumped to 160 beats per minute. She rushed to an urgent care and then an emergency room, where she was told she had kidney failure, according to the report. If not for the Apple Watch, she would have died, doctors apparently told her.
“Stories like Deanna’s inspire us to dream bigger and push harder every day,” Apple CEO Tim Cook tweeted this week in response to the ABC News article.
Facebook really, really wants you to give VR a go–no pun intended. That’s the message the company communicated yesterday during day one of F8, its annual developers conference in San Jose, California. The F8 keynote was filled with assurances that VR headsets like the new Oculus Go won’t create a barrier between you and the people around you. Instead, the company believes that wearing a face computer will be even more social, because you’ll be playing games, taking meetings, and video chatting with friends and family.
And since the apps that have already been created for Samsung’s Oculus-based Gear headset can be ported over to the Oculus Go headset, there are already more than a thousand apps available for the new $200 Oculus Go. What else do you need at this point in order to embrace VR?
For one, maybe a little reassurance that VR apps–as well as AR apps–are being designed with user privacy and reasonable data-sharing practices in mind. Facebook still needs to prove that it’s thinking about new technologies in a way that ensures they won’t become the next obvious frontier for abuse, misinformation, or even election interference. As the company’s primary platform has swelled to more than two billion users, it’s had its share of issues with false news, hate speech, and bad apps, due in part to Facebook’s own lack of due diligence during growth phases.
Facebook’s Oculus VR user base is still minuscule by comparison–according to one research firm, 1.8 million Oculus Go devices are expected to sell this year–but if Go becomes the great VR democratizer that Facebook is hoping it will be, then the new headset is introducing a new kind of app and a new kind of app store to a whole new subset of Facebook users. It also raises the question of how Facebook will deal with “fakeness” in an environment that is, by definition, entirely virtual.
Facebook’s executives in VR and AR say they have learned some lessons from the early days of Facebook, and that the company is trying to “ensure a very high quality of platform against misinformation or against bad actors,” according to AR/VR executive Andrew Bosworth. But Bosworth, known as “Boz,” also said in an interview with WIRED that he believes Facebook’s AR and VR app platforms are still too nascent to have serious abuse problems.
Facebook-owned Oculus utilizes its own app platform, separate from Facebook, Messenger, or the other apps that Facebook owns. You don’t need a Facebook account to sign up for Oculus, and linking your Oculus account to your Facebook account is optional, as WIRED’s Peter Rubin points out in his review of the headset. Go has its own app store, and many of the mobile VR apps that are front and center right now are highly recognizable brands or titles: Netflix, Hulu, NatGeo, Minecraft, The Last Jedi.
There are also only around a thousand apps right now, which means each app is reviewed manually, according to Bosworth. “It’s a manageable number of applications,” he says, “and you can just look at every one of them and make sure there’s nothing in there that’s untoward.”
In a pre-emptive move, ahead of changes that could be enforced when Europe’s General Data Protection Regulation goes into effect, Oculus published an update to its privacy policies two weeks ago. The update highlighted the addition of a privacy control center for users and clarified the kinds of information Oculus, and in some cases Facebook, collects about Oculus users. It also divulged the kinds of data that Oculus app makers have access to: the real-time position of your headset and controllers, your Friend List, and the boundaries of the physical space where you’re using Oculus. “We periodically audit our systems to determine if there’s evidence of nefarious activity,” the post reads, “and we take action accordingly.”
In other words: it doesn’t read all that different from Facebook’s privacy policies and settings on its core app or other apps. Especially when you consider the periodic audits; Facebook’s own privacy audit in 2017 didn’t catch the Cambridge Analytica data caper. As VR gets more sophisticated, and as standalone VR headsets get better at profile-building and advanced positional tracking (like the kind promised with Oculus’s “Santa Cruz” headset), it’s enough to make any non-early-adopter wary about the volume and granularity of data that’s being collected.
But Bosworth insists it “couldn’t be a better time, in terms of the public conversation, to build new platforms, because you can benefit from having observed all of the issues that can come as your platform grows and succeeds.” He cites examples of tools in Oculus that “allow people to either express or not express their identity as they see fit,” such as using a realistic avatar when using Facebook Spaces with friends, but exercising the option to be more opaque about who you are if you’re playing games against strangers.
A spokesperson for Oculus also said that the company has been working on an Abuse and Prevention API that’s being tested by a few app developers right now, and that will become more widely available later this year.
Still, Bosworth acknowledges there’s more work to be done in terms of the kind of privacy and safety tools that need to be offered, both to consumers and to developers in VR. Right now, the Oculus platform is still primarily experienced through the apps being built for mobile platforms, along with some PC apps for the Oculus Rift. That’s going to change if standalone VR really does take off. “As we go forward, I think there’s a much richer set of tools that we can provide to app developers,” Bosworth says, “so that within apps, there’s an additional layer of safety and security.”
FRANKFURT (Reuters) – The European Central Bank has designed a new test simulating cyber attacks on banks, stock exchanges and other firms that are critical for the functioning of the financial system, it said on Wednesday.
The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach
The move follows a string of heists and attacks by hackers on lenders and central banks over the past two years, including one that disrupted online and mobile services at the Netherlands’ three top banks earlier this year.
The ECB’s initiative aims to create a single framework for testing the cyber-resilience of financial firms in the European Union.
The framework envisages, among other tools, “red teams” (RTs) of external hackers hired to find and exploit vulnerabilities in the companies being tested, a technique derived from the military world and widely used in the private sector.
“The test objectives … are the flags that the RT provider must attempt to capture during the test as it progresses through the scenarios,” the ECB said.
But its European Framework for Threat Intelligence-based Ethical Red Teaming (TIBER-EU) will simply serve as a guideline and it will be for other authorities to carry out any test.
“It is up to the relevant authorities and the entities themselves to determine if and when TIBER-EU based tests are performed,” the ECB said.
“Tests will be tailor-made and will not result in a pass or fail – rather they will provide the tested entity with insight into its strengths and weaknesses, and enable it to learn and evolve to a higher level of cyber maturity,” it added.
In of the most high profile cases to date, hackers breached the central bank of Bangladesh’s systems in early 2016 and tricked the Federal Reserve Bank of New York into sending as much as $81 million to accounts in the Philippines.
Reporting by Francesco Canepa; editing by David Stamp