Wells Fargo is in trouble for a whole new reason

Wells Fargo sold customers an investment that was almost guaranteed to lose them money and told them it was a good way to protect their portfolios, authorities say.

Regulators ordered the bank on Monday to pay mom-and-pop investors $3.4 million after its advisers recommended “unsuitable” investments known as volatility-linked products that were “highly likely to lose value over time.”

Wells Fargo (WFC) pushed customers into these investments as hedges, to protect against a market downturn. In fact, they are “short-term trading products that degrade significantly over time,” regulators said, and “should not be used as part of a long-term buy-and-hold” strategy.

It’s the latest black eye for Wells Fargo. Over the past 13 months, the bank has admitted opening 3.5 million potentially fake customer accounts, forcing up to 570,000 borrowers into unneeded car insurance, and wrongly charging homebuyers fees to lock in mortgage rates.

Now FINRA, Wall Street’s self-regulatory body, has accused Wells Fargo of failing to properly supervise the sale of volatility-linked products. FINRA says reps from Wells Fargo Advisors, the bank’s brokerage division, recommended them from 2010 to 2012 “without fully understanding their risks.”

Consider the risk posed by one of the most popular choices. The iPath S&P 500 VIX Short-Term Futures ETN (VXX) has lost 99.97% of its value since its inception in January 2009.

“It is absolutely evil. Obviously, Wells Fargo had no idea what they were selling,” said Joe Saluzzi, an expert on market structure and co-author of the book “Broken Markets.”

Related: Wells Fargo’s legal headaches are hurting its profits

Some retail investors (and evidently Wells Fargo advisers) get confused by volatility-linked products. They wrongly believe these instruments track the VIX, a barometer of market turbulence and investor fear. The VIX (VIX) tends to spike when markets plunge.

In reality, buying volatility-linked products is not a bet on the VIX itself. These instruments track short- and medium-term VIX futures. They are a bet on whether the market will be more volatile in the future than people expect.

“It’s not meant for retail. Everyone gets trapped in it,” said Saluzzi, co-head of trading at Themis Trading.

Inside these investment products, futures contracts are constantly bought and sold, often at a loss. That makes them a terrible choice for mom-and-pop investors who are buying for the long run, not trading actively.

Morningstar researcher Adam McCullough warned in an article last month that holding on to volatility-linked products has “cost investors dearly over the long run.”

Wells Fargo didn’t admit nor deny FINRA’s charges. The bank said in a statement that it has stopped selling the investments and made “significant policy and supervision changes.”

“We are committed to helping our clients achieve their investment goals through advice that is regularly reviewed and aligned to their objectives and risk tolerances,” Wells Fargo said.

from Business and financial news – CNNMoney.com http://ift.tt/2ifWVic

Neutron Stars Collide, and the Gravitational Wave Sends Ripples Through Astrophysics

Some 130 million years ago, two extremely dense balls of matter collided into each other. These two neutron stars, the city-sized cores of deceased giant stars, spiraled inward and merged to become a giant fireball. In the collision, they generated a sonorous ripple in spacetime known as a gravitational wave.

On August 17 this year, that ripple reached Earth. Researchers located at three different observatories—LIGO’s two detectors in Louisiana and Washington, and new European collaborator Virgo’s detector in Italy—saw the signal of the gravitational wave. As the wave moved through the observatories’ tiny plot of spacetime, it stretched and compressed their detectors’ kilometers-long arms. It was the fifth gravitational wave to be detected by humans, ever.

But this wave was different from the previous four. First, this was the first gravitational wave ever observed to come from neutron stars. All other detected gravitational waves came from black holes colliding. And even cooler: For the first time, LIGO and Virgo got a gang of old-school telescopes—the Hubble Space Telescope and the European Very Large Telescope, for two—to help out. Minutes after the gravitational wave researchers saw the signal, they alerted their observatory buddies and advised them to point their telescopes in its direction.

Collectively, some 70 observatories were able to see the astronomical event by capturing different types of light: X-ray, ultraviolet, optical, infrared, and radio. Combining their telescope images with the gravitational wave signal, they were able to locate the event, identify that it originated from two neutron stars, and describe the collision in multimedia detail. “It’s a lot like a combination of senses,” says LIGO physicist Jocelyn Read of California State University, Fullerton. “They’re each telling you something different about what happened.”

Read was preparing to present about hypothetical neutron star collisions at a workshop in Montana when she learned of the new signal. She plowed ahead with her presentation as though the collisions were still hypothetical—adhering to the “Memorandum of Understanding” that directs observatory members to speak only as a group. “I have a terrible poker face,” says Read. “I’m pretty sure that people who knew me had a good suspicion that something had happened.” Leading up to the announcement, LIGO and Virgo continued to protect the results from leaks. Even though the neutron star detection occurred two months ago, the 1,500-odd researchers in the collaborations were forbidden from talking publicly about it until today.

But they might as well abandon the secrecy—because it really doesn’t work.

Rumors of the detection began to circulate almost as soon as the telescopes had pivoted their apertures. On August 18, the day after the observation, an astronomer at the University of Texas at Austin tweeted about it. Unaffiliated researchers noticed—and commented online—that the public internet logs of several observatories had noted they were pointing their telescopes under the suggestion of LIGO. As they speculated why, LIGO members continued to equivocate. On October 3, during a press conference about the physics Nobel Prize, a journalist directly asked new laureate and pioneer researcher Rainer Weiss whether the announcement was related to neutron stars.

Physicist Rob Owen of Oberlin College, who studies gravitational waves but isn’t a member of LIGO, heard about the detection result three weeks ago—because a friend posted rumors on Facebook. “Actual LIGO members don’t say anything openly or make Facebook posts about it,” says Owen, “but people who are tangentially involved may have heard rumors from somewhere else.”

Collaboration with conventional observatories made it even more difficult to keep the detection a secret. More people means more gossip. And conventional observatories are used to releasing data quickly. “We had all these telescopes raring to announce their discoveries,” says Read. “Left to our own devices, we probably would have wanted a lot more time.” LIGO’s first discovery took about six months to announce, and this one took less than two. With the extra time, Read would have liked to understand the data in more detail. Right now, they’re “confident enough” to say that the gravitational wave came from two neutron stars colliding, says Read. But strictly speaking, they just know that the collision happened between two objects that have typical neutron star masses. There’s still a chance that this gravitational wave came from a collision between a neutron star and a black hole—and they may never know for sure. “This same event is going to go through more analysis in the months and years to come,” she says.


Gravitational wave researchers have historically been tight-lipped because they lacked cred among physicists. “They were a bunch of outsiders, often scorned by rest of the scientific community,” says sociologist Harry Collins of Cardiff University, who has followed the saga of gravitational wave research since 1972 and wrote about the first gravitational wave detection in his book Gravity’s Kiss. Before LIGO announced its first wave in February 2016, other physicists criticized the high cost of its facilities—over a billion dollars at this point. Even Einstein, who predicted the existence of gravitational waves, doubted whether anyone could ever detect them.

Historical gaffes didn’t help their credibility, either. Physicist Joseph Weber claimed to have detected the first gravitational waves all the way back in the 1970s—he hadn’t. And in 2015, physicists working at a telescope in the South Pole had to retract a similar claim. “We want to make sure everything checks out, that all our ducks are in a row, before we tell it to the world,” says physicist and LIGO member Geoffrey Lovelace of California State University, Fullerton. It makes sense for scientists to be extra-vigilant against errors. In today’s political climate, where science as a whole is criticized for any apparent waste of resources, conflicts of interest, or misinterpreted results, it can be dangerous for scientists to lose face in front of the world.

But gravitational wave researchers have made it mainstream, whether they realize it or not. They’ve detected five gravitational waves and confirmed the measurements using simultaneous data from multiple detectors. Pioneering researchers Weiss, Kip Thorne, and Barry Barish won the Nobel Prize for their gravitational wave work earlier this month. Analyzing this detection, they’ve even partially solved a long-standing mystery about where heavy elements like gold originate in the universe—in neutron star collisions.

Collins thinks that LIGO and Virgo will gradually loosen their iron grip on gravitational wave data. For the first few detections, the stakes were super high because they’d never done it before. They’ve got credibility now. They’ve shown that they can detect gravitational waves—now their goal is detect them in large numbers to learn more about the exotic objects in space. “In a year, there will be so many discoveries that the public will cease to be interested in them,” says Collins. He thinks they’ll gradually adopt a similar process to conventional observatories—analyzing and releasing data quickly.

Read and Lovelace both welcome the openness. “I used to think it would be so fun to learn something brand new about the universe and keep it secret for a bit,” says Lovelace. “But it’s not. You want to tell everybody.” For the discovery of the first gravitational wave, he managed keep quiet—almost. “I told my wife right away,” he says. They’d been married only a month. “I thought, that’s no way to start a marriage—something that big and not explaining why I’m staying up late working on stuff.” If the secrecy stops, that means we’ll get to know, too.

from Wired Top Stories http://ift.tt/2gK05Hx

How Are These Masterfully-Engineered Pop-Up Books Even Possible?

You’ve probably never given much thought to the design of a pop-up birthday card after first opening it, but you will after watching this compilation of Peter Dahmen’s creations. He somehow manages to turn sheets of paper into intricately engineered architectural masterpieces.

Article preview thumbnail

Matthew Reinhart and Emiliano Santalucia have created what is easily the most impressively…

Read more Read

If you opened a birthday card and had one of these designs pop-up in your face, any follow-up gifts would probably be a disappointment. You can head on over to Dahmen’s site where he’s posted several tutorials on how to recreate some of his simpler pop-ups, but you’ll want to make sure you’re skilled with scissors or a hobby knife before even attempting some of these.

[YouTube via The Kids Should See This]

from Gizmodo http://ift.tt/2g5BKuJ

Physics Simulation Of 55,000 Planks Collapsing


This is a short, slow-motion physics simulation created by Youtuber Xepher of 55,000 individual Jenga-style planks collapsing. It took twelve days to render. I’m not sure if that’s because it’s so complex, or if Xepher was using a pocket calculator to do the rendering. Is that really how all those planks would collapse? I’m not sure, I haven’t finished my own calculations yet. Although right now I’m leaning towards only pretending to solve some equations while I actually doodle a penta-breasted alien chick and just say yes. What can I say, I’m a mathematician at heart. But only at heart, not at all in real life.

Keep going for the video.


blog comments powered by Disqus

from Geekologie – Gadgets, Gizmos, and Awesome http://ift.tt/2yHRcbI

Google’s Duo voice chat app is about to become Android’s FaceTime

When Google’s standalone video calling app Duo came out last year, we wondered if it would become another niche app, a flash in the pan. Why do we need another communication app in a crowded market? Today’s news shows us that we can’t always be right, as Google takes the first steps to integrating Duo into its Android operating system, much like Apple’s FaceTime is an integral part of iOS.

According to a Google blog post, the company is rolling out integrated video calling to first-generation Pixel, Android One and Nexus devices. It will also show up on the Pixel 2. "We’re working with our carrier and device partners to bring this experience to more Android devices over time," wrote product manager Jan Jedrzejowicz. If you (and the call recipient) have a carrier that supports ViLTE, your video calls will go through that service. If not, Duo will connect you to anyone with the app installed.

Source: Google

from Engadget http://ift.tt/2wR8Aqe

Epic giant robot battle scheduled for October 17th

Are you ready for the world’s first giant robot fight? (If your answer to that was "No," who even are you?) We’ve been waiting for a date for the MegaBots vs. Suidobashi duel, and now it’s finally here. The fight will take place on October 17th, 2016 at 10:00 PM ET. It will be streamed worldwide on Twitch. If you miss the live stream, you can catch it on YouTube and Facebook immediately after the event concludes.

This giant robot battle has been in the works for almost two years and was originally supposed to take place in August. The 16-foot-tall, 12-ton MegaBots Eagle Prime robot was built a team of American engineers, while Kuratas, a 13-footer that weighs 6.5 tons, was built by the Japanese company Suidobashi Heavy Industries. And now they will do battle for our enjoyment; the question is, who will reign supreme?

MegaBots flyer

Source: MegaBotsInc (Twitch)

from Engadget http://ift.tt/2yeMa68

Raspberry Pi laptop teaches code with modular innards

The power and affordability of the Raspberry Pi has given rise to a new type of computer. One that goes beyond the credit-sized board, with colorful shells and displays that make it feel like a normal laptop or PC. The latest is the all-new Pi-Top, a modular laptop with a unique sliding keyboard. Pull it toward you and a large tray is revealed underneath with a Raspberry Pi 3 board and space for additional parts. The idea is to tweak and upgrade its innards for different coding projects designed by the Pi-Top team, thereby learning about code and electronics simultaneously.

Pi-Top has experimented with this concept before. In December 2014, the company raised $193,000 on Indiegogo for its first do-it-yourself laptop. It was a functional, but unattractive machine with a cramped keyboard and small, right-aligned trackpad. A large, horizontal panel sat between the keyboard and the hinge, taking up valuable space. (You could keep your lunch there, I suppose.) To access the Pi and modular tray underneath, you had to slide the panel out through a slot hidden on the right-hand side of the machine. It worked, but clearly the design had room for improvement. One year later, the company returned to Indiegogo and raised $220,000 for the pi-topCEED, a $99 desktop computer powered by the Raspberry Pi.

The new Pi-Top is a slicker machine. It’s a drastically easier build — six steps, rather than 23 — which might sound like a step backwards, but in return you’re getting a design that feels more competitive with cheap Chromebooks and Windows laptops. It has a full-size keyboard and a centrally positioned trackpad. Above the hinge is a 14-inch, full HD screen that can tilt up to 180 degrees, besting the original’s 13.3-inch display and 125-degree opening angle. Around the back, you’ll find one ethernet and three USB 2.0 ports, a regular 3.5mm audio jack and a place for power.

Slide the keyboard down and you’ll gain access to the tray. This is where the Raspberry Pi sits, alongside a custom cooling system that Pi-Top claims will improve your productivity. If a Raspberry Pi runs too hot, it will start closing applications automatically. The Pi-Top’s extra cooling should, therefore, stop this from happening, allowing you to multitask with fewer restrictions and sudden app closures. Each laptop also comes with an "inventor’s kit" which includes a Pi-Top Proto Plus add-on board, LED lights, a microphone and motion sensor. Unlike the previous laptop, which required a screwdriver, they all snap into place magnetically.

The inventor’s kit unlocks three coding activities, or "journeys," inside the Pi-Top Coder app: Smart Robot, Music Maker and Space Race. The "Robot," for instance, is a boxy cardboard shell that sits on top of the Proto Plus. Using code, you’ll adjust his blinking speed, teach him to talk as you walk by, or make him think that he’s being fed whenever you cover the proximity sensor. Each Pi-Top also comes with CEEDUniverse, a space exploration game that tests your creativity and problem-solving skills. You will, of course, be using and learning about code at the same time.

The Pi-Top runs a custom operating system called Pi-TopOS Polaris. It runs some basic software including Google Chromium, LibraOffice and Minecraft Pi Edition. So while it can’t compare to a Windows machine, it’s possible that a child or student could use it as their first laptop. The sticking point is the price: the new Pi-Top costs $320, or $285 without a Raspberry Pi. That’s expensive for an arguably underpowered laptop. In exchange, of course, you’re getting a device that’s easily customisable. You can upgrade the Pi board whenever you like and use external components in the tray (I’m told it’s possible to add a BBC micro:bit, for instance).

The laptop faces fierce competition from Kano, however. The London startup, which has a range of built-it-yourself coding kits, announced a "laptop" bundle last month that includes an all-in-one display unit and wireless keyboard. It doesn’t offer much in the way of hardware customisation, but is powered by Pi and offers similar learn-to-code software. (It’s also compatible with Kano’s standalone coding kits, such as the Pixel.) The "Computer Kit Complete" is also $50 cheaper than the Pi-Top, which might give parents pause while browsing for Christmas gifts.

from Engadget http://ift.tt/2zj1E6F