The facts, they are a changin

pexels-photo-204366.jpeg
It was a dark and stormy night. Or rather, the night darkness concealed the source of the intense storms. That seems much better. My wife and I waited for the storm to pass that evening before setting off to walk the dogs. The reflection of the street lights glistened off the wet streets.

All down the street, I could see small ridges. Upon closer examination, I could see that there were literally hundreds of night crawlers stretched out perpendicular to the road. The road friction made them stretch out to a tortured length of about a foot and a half. Normally plump, this condition thinned them out considerably. Night crawlers are earth worms on steroids.

Feeling some form of compassion for this Lumbricus terrestris, I started to scoop them up and toss them back on to the grass. Some worms can survive being cut in half but being half squashed flat by a truck did not seem very survivable to me.

Now, under normal conditions worms produce a fair bit of mucus. Adding torrential rains to that seems to add to mucus production as the worm exodus continued. I started to regret my misplaced compassion and tried to distance myself from my emotions. My wife just simply distanced herself.

I assumed the common knowledge that during intense rain storms worms attempt to escape drowning in their burrows. However, they breathe through their skin which needs moisture. So there may be a number of other reasons why they engage in such risky behavior of stretching themselves out on a busy road.

One good reason would be migration. Lots of rain would allow them to move great distances. However, half of them moved from the south to the north, while the other half moved from north to south. But, hey, they’re worms. The grass always seem more organic filled on the other side of the street it is said.

An interesting phenomena occurs when you experience a situation and learn some new facts about it later. I learned that another good reason worms travel is that they want sex. My recollection of the event now includes an added ‘ewww’ quality to it. And what better time to find a mate than when everyone else is stretched out in the same area. We have a beach here that seems to serve the same purpose for humans.

Although worms are hermaphrodite, male and females together, they cannot reproduce solely by themselves. They need a mate. I must have cast aside, and severely disappointed, several dozen night crawlers. Destined now to remain virgins they’re probably bitter. Unless that was going to be their choice anyway, and so that is perfectly ok.

This sex migration behavior can bring down planes. After a rain, worms like to stretch out wherever they can, including airport runways. Worms do not get sucked into turbines, but the birds coming to eat the worms can be. Particularly the flocking birds like gulls which tend to ignore whatever happens around them when they fight over food. So airport authorities tend to use fungicides to reduce worm populations.

Night crawlers contribute to the US current account deficit! Some politician should complain about this. If nothing more than the neat optics it provides. “Congress needs night crawler NAFTA negotiations!” Apparently $20 million of night crawlers are exported to the US each year with little or no USA content. A few years ago, the price leapt from $35 per thousand worms to $80 per thousand. Economics 101. Supply was tight, and owing to inelasticity of demand, prices skyrocketed. Worm futures may not have the panache of Tesla stock, but you would have made a fortune otherwise.

Fact

 

Bitcoin Bubble Bubble

pexels-photo-730557

Toil and Trouble Tantrum

No one alive, outside of the Canadian Senate, lived through The Tulip Mania bubble of the 1600s. These bulbs were newly introduced into Europe and commanded exorbitant prices. As more people bought into the scheme, the higher the price. A rare type of tulip went for 1000 guilders in the 1620s and for 10000 guilders just before the bubble burst in 1627. This was enough to purchase one of the grandest homes along the most fashionable canal in Amsterdam and 10 times as much as the annual salary of a skilled craftsman.

A typical bubble runs counter to normal economics. Whenever the price of an object goes up, traditional theory suggests that the demand should go down. But with a bubble, the price only continues to go up with demand. The asset price deviates from the intrinsic value. The main criteria feeding this price increase is the feeling that the price will only continue to go up. Even back in the 1600s, FOMO, the fear of missing out, reigned supreme.

Closer to the last few decades, you don’t have to look farther than the dotcom era or the financial crisis to see examples of what was referred  to as irrational exuberance. This term was coined by Edward Greenspan in a 1996 speech and later used by Robert Shiller as a title for his book. The 2005 edition warned of the housing bubble burst.

This brings us to the latest potential bubble. Bitcoin. Unlike houses which can produce rents, stocks that can produce dividends and bonds that can calf off coupons, this cryptocurrency does not have any intrinsic value since it does not claim to the assets of any company or government and does not generate income.. And unlike bitcoin, you could actually handle a tulip bulb and grow a flower. If you didn’t mind expending all the value of your investment in the hopes of growing more bulbs after several years.

Bitcoin’s value appears to be in situations where people think, or hope, it will increase in value. And as we all recall, from Rudy Giuliani, hope is not a strategy. For our purposes, hope is not a sound financial strategy.

More people share the notion that Bitcoin is a fraudulent bubble. And others, who likely have a major stake in the game, say that that a million dollar bitcoin is not out of the question. There are only a limited number of bitcoins that can be mined, so its rarity will drive value. Apparently New York taxi cabs used to be worth a million, but with the advent of Uber, the value has dropped down to something over $300,000. So there are other cryptocurrencies that can come on stream as there is no real impassable economic moat preventing other currencies coming on stream at some point.

Bubbles have been likened to a type of virus. People get infected and the virus can then spread at an exponential rate, until everyone develops an immunity. That immunity is when there is no one else to sell to and the price drops. Sometimes radically.

So we have seen the value of bitcoin rise up 2000 per cent in the past 12 months to $25,000 CDN and drop down to close to $8000 and recover to almost $12,000. Apparently bitcoin ticks all of the boxes for a bubble including a fivefold surge in trading volumes over the last five years, lack of financial regulation and the launch of related financial instruments such as futures.

You can see the five stage of the bubble when you look at any bitcoin chart; displacement, boom, euphoria (the greater fool theory), profit taking and a bit of panic. History does show the occasional bull trap. This is where prices start to slightly increase and people buying the dip, or those experiencing FOMO begin to pile back in. With declining volumes as the price increases, it seems a lot of people are now operating under the ‘fool me once, shame on you. Fool me twice, well I’m just an idiot’ principle. Or something like that.

If you have made your money on the way up, good on you. Personally, I don’t think this will end well for those coming in late.
Follow at https://liveanuntetheredlife.com/

Daily Prompt: Tantrum

Photo by David McBee from Pexels

<a href=”https://dailypost.wordpress.com/prompts/bubble/”>Bubble</a&gt;

Nudging your Client

people-office-group-teamImagine you outline to your client the possibilities of two court actions where he is the plaintiff in one case and the defendant in another. Legal fees are no longer a cost consideration. In the first case, you advise that he could settle and receive $70,000 or have a 90% chance of the court awarding him $80,000. In the second case, you advise that he could settle and pay $70,000 or have a 90% chance of the court deciding he should pay $80,000.  If he was like most people, in the first case he would settle for the $70,000. In second case he would likely go to court and risk paying $80,000. People prefer sure things when it comes to gains, and take risks when it comes to avoiding losses. Lawyers explaining the consequences of a certain legal action should be prepared that a client may be prone to more risk taking to avoid a loss.

This simple example captures a substantial portion of Kahneman’s book Thinking: Fast and Slow in addition to Thaler’s book, Nudge. Kahneman and Thaler separately won the Nobel Prize for work in their respective fields. The Obama administration successfully incorporated the concept of ‘nudges’ into their policy work. These theories on behavioral economics can contribute substantially towards the practice of law and the attraction and retention of clients.

Kahneman separates our thought process into a simple dichotomy of System 1 thinking, fast, and System 2 thinking, slow.

System 1 thinking explains why people feel losses twice as much as they feel comparable gains. Fast thinking comes into play when you stand up to object to a line of questioning without knowing why, when you sense a brief misses something, or when you believe that there really is a tiger outlined in the grass just ahead. Regardless of your personal circumstances, fast thinking comes in handy to avoid being eaten. Figuratively or literally.

Fast thinking includes intuition. Although, thinking with your gut can be dismissed as superficial, Kahneman recognizes that experts glancing at a situation can reach a correct conclusion simply based on continuous experience.

Intuitive thinking guides the halo effect. Someone’s reputation, and ego, could proceed them. Or exceed them. This may give this person an aura of invincibility in that they have won so often they will likely win again. If you, or a court, provides that person the benefit of doubt, a halo so to speak, then you should dissuade yourself of this notion. Rest assured, the rest of the day has not yet been written. Anything can and will likely happen.

Information immediately available primes system 1 thinking and feeds into the ‘anchoring’ concept. Kahneman provides the example of a panel of German judges asked to roll a weighted die that came up with three or nine. The judges were then asked to provide a ruling on a certain fact situation. Although it should not have mattered, judges rolling a nine more often gave higher sentences that the judges that rolled a three.

System 2, slow thinking represents the traditional lawyer mind; collecting facts, analyzing those facts, and providing a researched opinion.  Relative to fast thinking, slow thinking generally has to be dragged into the thought process if the mind feels that fast thinking ‘has got this covered’. Slow thinking eats Doritos while watching TV. I prefer the term ‘critical thinking’ as slow thinking suggests something negative.

Understanding how prospective clients think can impact how you market your law firm. Imagine yourself a prospective client landing on your firm’s website. The website asks if you want to allow cookies in order to enhance your website experience. Being like most people, you sort of realize that cookies attach to your browser benignly. But you read something about them somewhere and your overall impression leans towards not allowing cookies. You congratulate yourself on being prudent, but your web experience becomes muted. The law firm suffers an opportunity cost.

Continuing your search, you land on another site that clearly, but not alarmingly, states that a small piece of code, a cookie shall be added to your web browser. Once again, you don’t know anything more about cookies than you did five minutes ago, but you proceed regardless. Your web experience becomes far more customized, and the law firm discovers substantial information on future clients’ interests.

Most clients intuitively refuse to accept cookies given the choice. The critical part of the mind would not examine the situation since there did not appear to be an immediate need. A client merely advised of cookie use would likely proceed, confident in the notion that someone vetted the cookie usage for them. The concept of providing a default cookie option nudges the client into a better result.

One would think that providing a range of options provides greater satisfaction than fewer options. However, Thaler says that having too many options leads to greater stress and reduced satisfaction. Therefore, providing a default option increases the probability that a correct choice is being made.

Thaler euphemistically refers to this as libertarian paternalism. People make better decisions by the correct arrangement of choices. The person in charge of this arrangement becomes the choice architect.

A lawyer becomes a choice architect in numerous ways. In speaking with a client and laying out their options, the phrasing of options definitely impacts the client’s choice. Although two handed lawyers, on one hand this and the on other that, may feel that they want to leave the choice of options strictly to the client, one should determine what level of guidance the client requires. Normally they would want the lawyer’s best recommendation.

Thaler parses apart the various tools that a choice architect has into five main aspects: Incentives, mapping, defaults, feedback, expect errors and structuring complex choices. For example data visualization and mnemonics of legal information can illustrate the difference between complex choices. In retaining clients, understanding the process behind making decision choices increases your value proposition defined as the benefits relative to the costs. By making the correct choice easier, you have channeled your client to the correct choice. You have reduced not so much the monetary cost to the client, but the stress cost of making that decision.

In making an intuitive choice, clients want to know what other people did in similar situations. Thaler found that a need to conform easily influences peoples’ choices. Clients could operate on this basis to decide how to proceed on a case for example. They would rely more on what friends and other people have done in a similar situation. Therein lies the importance of stories. Relating other individual’s stories can add additional comfort to clients and make the decision easier. Adding stories to your advice makes a client’s choice easier.

To demonstrate this, Thaler identifies greater compliance in hotels where people are advised the guests before them selected the economical option of not insisting upon having towels replaced daily. People like to be part of the crowd as this makes their decision making easier. Your law firm stories should reflect how generally others have proceeded.

Explaining these concepts should be incorporated in to continuing professional development for all lawyers. As a final example, do you think it is more likely that the number of lawyers in Canada is between 60,000 to 70,000 or 70,000 to 80,000?

As you can see from the above paragraph, we have provided some anchoring information along with some anchoring information in the very first paragraph. The federation of law societies lists one hundred and seventeen thousand lawyers practicing today. When people rely upon their intuition, they can be swayed by other factors. These innovative concepts require greater examination and incorporation into today’s law practice particularly in cases where they might operate to your client’s detriment. Did you feel the nudge?

Startup Stock Photos

Source: startupstockphotos.com

Mnemonic

The new immortals: What legal status should be granted to artificially intelligent persons? -Canadian Lawyer

pexels-photo-97077Immortals shall soon walk among us. They may also crawl, roll and perhaps hover. Yes, definitely hover. The immortals refer to artificially intelligent persons, and by “us” I mean natural persons.

The European Parliament Committee on Legal Affairs recently released a report recognizing that humankind stands on the threshold of an era of sophisticated robots and other manifestations of artificial intelligence. The committee saw the need to legislate this area relatively quickly as self-driving cars are making their appearance. The fundamental question is what sort of legal status should be granted to AIPs? Natural persons want to avoid any “Battle of the AIPs” future scenarios.

A reference to Mary Shelley’s Frankenstein; or, The Modern Prometheus dramatically starts off the committee’s report. The committee thought that by addressing people’s real concerns upfront, they could deal with the more substantive issues. The committee recognizes that people have fantasized about the possibility of building intelligent machines and of achieving potential unbounded prosperity. The committee does not mention drones with laser canons, but you just know they were all fantasizing about that.

Other person “types” provide potential guidance. Corporations occupy a separate category of legal persons in an attempt to reach personhood. A corporation is a legal person by legislation. In the 1973 sci-fi film by the same name, Soylent Green may be people, but corporations are not people. “Corporations are people, my friend,” said U.S. presidential hopeful Mitt Romney in 2011, and Democrats took him to task for this statement. “I don’t care how many times you try to explain it,” U.S. president Barack Obama said at one point. “Corporations aren’t people. People are people.” A person falls into the legislative definition of a natural person, and the corporate experience shows where the AIP legal status question may end up.

Corporations have first amendment rights and can advocate for certain political parties. Should AIPs be provided similar rights, and if they could vote for a particular party, what sort of governmental structure would they prefer? Anarchy would be a good bet, and not the cloak and molotov cocktail carrying kind. German philosopher Immanuel Kant identified anarchy as “law and freedom without force.” AIPs would not have the billions of years of upbringing requiring force to deal with predators and competitors. They might learn that on their own, and perhaps to our detriment.

Corporations can own property but don’t have personal privacy rights. One can imagine AIPs creating new patentable types of software. If your AIP demanded privacy, what would your reaction be? Once your teenager makes the same request in your house, your first compulsion might be to sack the room and look for drugs or an old-fashioned diary. For an AIP, would you look for secret caches of information, or heaven forbid, mind-expanding cloud-based storage?

Corporations can also divide like an amoeba and create brand new little entities. One can easily imagine AIPs creating more advanced AIPs. Shelley’s creature demanded that Frankenstein “create a female for me with whom I can live in the interchange of those sympathies necessary for my being.” If AIPs created little AIPs, should we — could we — stop them? The age of consent does not apply here. An AIP could easily become “older” than any builder if an AIP can download the wisdom of the ages overnight and join the ancients. How could one supervise this potential procreation proclivity in AIPs? In Canada, the government has no role in the bedrooms of the nation. The U.S. government appears to be in every intelligent device, so it may be supervising already.

In describing artificial intelligence, the committee outlines how the present legislation does not encompass machines that become autonomous and self-aware. A machine can be built, loaded with software and then go on to learn from its environment. This new environmental learning suggests that the AIP can determine its own actions and learn from its experience and failures. AIPs have an advantage here since the majority of natural persons still struggle with learning from failure.

If an AIP can decide its own actions and causes harm, then legal liability can shift from the builder over to the teacher providing the environment. If an AIP can operate independently with its environment and be held accountable for its own actions, then it could be held strictly liable. Strict liability requires that a plaintiff show that the damage occurred and a causal link. This differs from negligence in that there is no need to establish the same duty of care, standard of care and breach of that duty of care. Strict liability would be allocated between builder and eventual teacher. The teacher and the surrounding environment impacts the liability shift between builder and teacher. This shift would be extremely difficult to establish in that it may take a village to raise a child, but a vast social media network environment raises an AIP.

The committee suggests an ethical framework of beneficence, nonmaleficence and autonomy, and fundamental rights such as human dignity and human rights, equality, justice and equity, non-discrimination and non-stigmatization, autonomy and individual responsibility, informed consent, privacy and social responsibility. Whether these ethics and fundamental rights will be offered to AIPs remains unclear, but sauce for the goose is sauce for the gander.

Natural people tend to anthropomorphize animals and objects, and this tendency may provide greater rights to AIPs. Do you feel bad if your kitchen table ensnares your Roomba? Would you feel even worse if it was trapped and you had earlier placed googly eyes on the Roomba? If so, then you would likely agree that AIPs are entitled to receive ethical and compassionate treatment. But would they need it or are we simply making ourselves feel better?

The committee suggests the need to include a kill switch (opt-out mechanisms). I will shorten this to “OOM.” The OOM euphemism provides somewhat of a guilt release. Humanity can delude itself in the belief it has control over any situation, but as Kurt Vonnegut Jr. wrote in The Sirens of Titan, “The only controls available to those on board were two push-buttons on the center post of the cabin — one labeled on and one labeled off. The on button simply started a flight from Mars. The off button connected to nothing. It was installed at the insistence of the Martian mental-health experts, who said that human beings were always happier with machinery they thought they could turn off.” If you have difficulty in OOMing your faithful Roomba, think how hard it might be if it asked you to reconsider.

To alleviate this OOM situation, I would recommend that readers take their favourite mind/body relaxant and consider the following: Consider if, instead of immortality, AIPs live a limited number of years. Science fiction covers both ends of the spectrum of planned obsolescence of the most brutal kind to the inability to self-terminate. If we incorporated a pre-determined lifespan, would we tell our AIPs the exact date? We could leave the date determination to a random number generator entitled Final Actual Time Expiry, or FATE. Perhaps again, sauce for the goose is sauce for the gander.

 

Previously on Canadian Lawyer

Photo

Negative Space

Source: negativespace.co

Stifled Life

Stifle just suggests preventing a natural part of being. Stifling a laugh seems to be the proper thing to do when laughing out loud would be inappropriate. But when you move to stifling growth, it seems to be inappropriate. You move along to stifling your own life, well that seems to be something that we all do but now we are just used to it.

We need to think that we are stifling our lives as if we are stifling laugher. Just think what that would be like if we lived unstifled!

via Daily Prompt: Stifle

Brilliant Actions

I have a fond memory of when my boss called me brilliant in a room of people. I had come up with an innovative way to double our matched funds from a particular foundation. Mind you, we all were in a bar. And the room was full, but only one other person was at our table and the rest were dancing. And this was after several rounds of beers and one round of tequila shooters. And this was to raise courage for the flaming sambuca shooters that were just coming.

So this may not have occured during a regular performance review, but I still count it!

 

Brilliant