Investment banks, hedge funds and other for-profit speculators of the world’s money supply are “scooping up computer scientists, not economists and investment bankers with MBAs,” because “artificial intelligence” is now the Holy Grail of investment strategy, not old-fashioned gurus like Warren Buffett, who are increasingly viewed as “redundant” because their minds are not “super-fast.”
As reported by the Financial Times, the so-called “quantitative investment world” of Goldman Sachs and Bridgewater, et al. is “play[ing] down the prospect of machines supplanting human[s]”—at least for now. But since “the human mind has not become any better than it was 100 years ago,” while the complexity of investments has grown immeasurably more complicated and unpredictable due to phenomena like algorithmic trading and a worldwide marketplace that includes China, “Eventually the time will come that no human investment manager will be able to beat the computer.”
Enter artificial intelligence. “A machine-learning algorithm will autonomously evolve and search for new patterns,” in the same way a human mind does, but thousands, if not millions, of times faster, making the human mind irrelevant. Buffett-style “intuitive trading strategies” will look clumsy in comparison—like 1950s NBA players competing against the likes of Kobe Bryant and Steph Curry.
Well, perhaps, But consider that the notion of pure, real-time, disinterested, objectively neutral analytic devices, crunching only numbers and disinterested in any external agenda, and powered by artificial intelligence, is a fiction. That’s what we thought about computers: That they would bring about “a million fold increase in the speed of calculations, a thousand fold decrease in cost, all this while scientists were ‘just beginning to explore these possibilities,’” as an idealistic 1962 prediction of the computer’s future had it. But other, more worried voices, were slowly emerging: this vast accumulation of data, an IBM analyst warned in the 1960s, “could be pooled, drawn on and used in ways for which they were not intended.”
Which brings us to viruses, bots, malware and the entire netherworld of awful stuff that crawls through and infects the world’s networks at the speed of light, seeking any and every unprotected nook and cranny. Last Thursday, a paper, published by DARPA (the Defense Advanced Research Projects Agency, the branch of the U.S. military that has worked on everything from satellite technology to the Internet to driverless cars), published “The DARPA Twitter Bot Challenge.” Impressed and alarmed by rapidly spreading “influence bots— realistic, automated identities that illicitly shape discussion on sites like Twitter and Facebook”–the Challenge seeks to up the scientific community’s game at detecting and combating such bots. The relationship between “influence bots” and artificial intelligence was anticipated by British physicist Alan Turing (“The Imitation Game” movie), whose “Turing test” postulated a “machine’s ability to exhibit intelligent behavior equivalent to, or indistinguishable from, that of a human.”
But the Turing test apparently did not anticipate a regime of outright deception and fraud on the computer side—a computer pretending to be a human that was controlled by a human pretending to be a computer. As this article, from the BBC, makes clear, bots, including influence bots, are already engaged in “automated deceit” that “can even trick the web-savvy.” The DARPA Twitter Bot Challenge was created because influence bots “pose a clear danger to freedom of expression”: If we don’t know whether the results our computers spit out are pure and objective and thus “real,” as opposed to malicious, agenda-driven and thus “unreal,” then we’re clearly capable of being led down a disastrous garden path.
(The DARPA paper cites examples of malicious influence bots by, for example, Russians engaging in a campaign of disinformation about its seizure of Ukraine, and ISIS spreading radicalism.)
The bankers and investment managers who are relying on artificial intelligence to replace “merely human” analysts mean well, but there is no guarantee that their findings may not be contaminated by bots and other forms of malware that purposefully distort conditions. Can they know that, for example, Chinese intelligence is not interfering in the analysis of oil prices over the next six months? Or that Russian mafia intelligence is not creating the impression that Chinese intelligence is the culprit? And on and on, through the looking glass. As the DARPA paper points out (and this is precisely the kind of stuff DARPA worries about), “Over the next few years, we can expect a proliferation of social media influence bots as advertisers, criminals, politicians, nation states, terrorists, and others try to influence populations.” The only protection against this menace, DARPA says, is “to significantly enhance the analytic tools that help analysts detect influence bots.” Unfortunately, the bad guys are in the race, too, busily developing software that thwarts bot-detection tools.
Which brings me to my headline. Re-read it. Influence bots mean that malicious coders may well influence the masses. Social media always has been over-hyped, but this news further undermines its early promise as the great leveler and democratizer of mankind. It turns out it may be anything but. How the world will deal with online information, including social media, that may be hopelessly compromised will keep “the good guys” busy for a long time, and could make an already anxious public more suspicious than ever of social media.
I haven’t been the biggest fan of California’s AVA system, which contains far too many utterly meaningless appellations. (Sonoma Coast, anyone?)
But now, the TTB has made an eminently worthy decision, in the case of Los Olivos, which on Jan. 20 was approved to become California’s latest appellation. (The actual effective date will be Feb. 22.)
It joins its Santa Barbara County sisters, Ballard Canyon to the west and Happy Canyon to the east, as AVAs in this central part of the sprawling Santa Ynez Valley, itself also an AVA. To the north is Santa Maria Valley; further west is Santa Rita Hills. The missing link in the region is now Los Alamos Valley, which currently is a gigantic black hole stretching from Santa Maria all the way south along the 101 Freeway to Buellton. It’s not an AVA, yet, but I expect it, or some part of it, to become one eventually.
With this fait accompli of Los Olivos, I should think the appellation-izing of Santa Barbara County has reached completion (once Los Alamos comes online). At least, there are no further suggestions for additional sub-divisions I’m aware of. Readers? I’ve long thought Santa Rita Hills is overdue for a little fine-tuning: that could happen along east-west (warmer-cooler) lines, or north-south (elevation and orientation) lines, but I don’t perceive any strong impetus to get involved in the fractious and expensive fights that appellation-tinkering almost always stimulates. (Look at the nastiness of the effort to expand Santa Rita Hills a little bit to the east, which seems to have stalled, at least temporarily, as local vintners line up to take sides.)
Thirteen wineries will be entitled to use Los Olivos on their labels, if they want to. Should they? I think so, but ultimately these are complicated marketing and sales decisions. Is there a Los Olivos terroir? Yes. The soils are not complicated, the way they are in, say, Sonoma County. Los Olivos is primarily a broad alluvial plain created by the Santa Ynez River. Hills are rare: the topography, in the words of the petition, is “relatively uniform, with nearly flat terrain” that, incidentally, makes harvesting easy.
Climate-wise, Los Olivos is warmish-cool, not as hot as Happy Canyon (think: Bordeaux), nor as chilly as Santa Maria Valley (Burgundy). The maritime influence has largely drained away by the time it arrives here, 30 miles inland; due to radiational cooling, that absence of fog makes nighttime temperatures quite chilly, cooler than in most of Santa Rita Hills.
Varietal-wise, Los Olivos has turned into Rhône country over the years, although the vintner behind the push for the appellation, Fred Brander, is a Sauvignon Blanc man, one of the few in California to specialize in that variety (and how well he does it!). Although a few wineries still produce Cabernet Sauvignon, the smart money has given up on it, because it never seemed to get ripe enough (which in turn was the rationale for Happy Canyon). I always had the feeling that vintners around Los Olivos produced Cabernet for the market and not because they thought it was the best grape for their terroir.
In short, the Los Olivos AVA makes perfect sense. It’s an upscale appellation: there are no common wines in Los Olivos. (Geeks: to what famous statement am I alluding? First to identify it gets a free lifetime subscription to steveheimoff.com.)
Reading about the upcoming Women of the Vine Global Symposium, a great event which takes place this April in Napa Valley, made me think of how difficult it was for women to gain a toehold in the wine business, even in “liberal” Napa Valley, as recently as the 1970s.
I was talking just yesterday with Cathy Corison, who related to me how, when she got a job in Freemark Abbey’s cellar, in 1978, Napa “never had a woman hauling hoses before that!” Indeed, it was rare for women to be found anywhere in wineries, except maybe in the lab; at Robert Mondavi, for example, that’s where Genevieve Janssens began, as did Zelma Long.
(It’s only fair to point out that Genevieve was hired by Zelma Long, who by then had become Mondavi’s winemaker—a rare exception at that time to the no-women rule.)
Another tale from that period concerns Merry Edwards, who related to me, in New Classic Winemakers of California: Conversations with Steve Heimoff, how shocked a winery owner was when she showed up for her job interview. You see, Merry had sent in her resume with her first name, Meredith, which made the owner think she was a man. As she told me the story, this winery owner “practically lost his teeth when I walked in. I said, ‘You didn’t know I was a woman, did you?’ He said, ‘No.’ I said, ‘You never would have interviewed me if you’d known?’ He goes, ‘No.’”
How far we’ve come since then. Some years ago, I heard that the Viticulture and Enology Department at the University of California, Davis, finally had achieved parity of the genders in terms of students majoring in V&E. After 125 years, not bad! Today, of course, it’s common to find woman winemakers (although this article asserts that, in 2014, the percentage of “female lead winemakers” in California still was only 14.8. One can only hope that this percentage will increase).
This is why certain wineries make such a big deal about the women who were instrumental in their histories. Freemark Abbey points out, with justifiable pride, how Josephine Tychson, who bought the winery in 1881, was the first recorded female winemaker in Napa Valley. The Guenoc and Langtry wineries of Lake County rightly note how Lillie Langtry established the original winery in 1888.
Related to this notion of gender equity in winemaking are the issues of race equity and sexual preference equity. Here in California we do have a number of talented Black winemakers and winery owners, but for some reason African-Americans still seem underrepresented at all levels of the wine industry. I’m somewhat at a loss to understand why. As for the GLBT community, there’s a ton of gay and Lesbian winemakers; not all of them are out of the closet, nor should they be if they don’t want to. I don’t think anyone wants to be known as “the gay winemaker,” any more than they want to be known as “the female winemaker” or “the Jewish winemaker” or any other such descriptor. Winemakers want to be known for their talent and work ethic. As do we all…
We never saw this level of wine scam before. Now it’s Premier Cru, which had been a very well respected wine shop in Berkeley until their recent collapse. Coming on the heels of the Kurniawan scandal and others, Premier Cru’s problems raise a troubling question: Why so many of these wine Ponzi schemes and frauds?
My answer: The greed of some consumers, who see wine as a commodity investment.
Premier Cru was the go-to store in the East Bay for collectors who wanted that extra-special bottle. But, as so many of them are now learning, Premier Cru appears to have been selling wines they didn’t have, or selling the same wine twice, stalling buyers off who weren’t getting wines they had already paid for, and eventually ending up with “more than $70 million in unpaid debts.”
How the heck does a wine store achieve that dubious distinction? Simple: When it takes advantage of credulous customers who want to own trophy wines nobody else can get and think they have an inside track on getting them.
The regrettable seeds for this were a long time coming. I can speak only from my perspective of nearly 40 years watching the San Francisco wine market, of course, but in many respects the S.F. Bay Area has been the epicenter for this remarkable era of show-off wines. Even when I started, there was a cadre of collectors who wouldn’t touch anything but First Growths and Grand Crus. At first I thought it was because they were men of discernment and refined tastes, but I soon learned that that wasn’t it. They were label drinkers, pure and simple. I doubt if one in ten of them knew what he was talking about. But what they did know was that having a vertical of Mouton-Rothschild gave them a certain cachet in their crowd, and that’s the only thing that meant anything to them.
They weren’t bad people, just wine likers (I hesitate to say wine lovers) who’d gone astray. Something about the rarity and scarcity of these collectibles made them crazy with lust. These were the sorts of people for whom Premier Cru was a sort of nirvana. Whenever I was there—looking for some under-$20 value in Burgundy or Cabernet—I’d see them conferring with the floor staff over some missing vintage in their collection they just had to fill. They were the same sort of people I used to see at the old Draper & Esquin on Montgomery Street in the FiDi, back in the day. Snooty snobs—“snoo-snos,” I called them. I thought that was an unhealthy development in the world of wine, at least the world I inhabited, which was of people who truly loved and cared about wine, and had a curiosity about it that drove them to try new things from new places.
Sadly, this distorted psychological phenomenon concerning wine got worse during the Reagan years, when fast and easy money gave MBAs the ability to collect Bordeaux and Burgundy and cult Cabernets before their thirtieth birthdays. It seemed to level off in the 1990s, why I don’t know, but then, with the burst of wealth in San Francisco in the 21st century, it has returned, with a vengeance. People are not content simply to drink good, interesting wine anymore. They want the trophies, the bragging rights wines, the Fabergé eggs, and they’re willing to pay whatever it takes to possess them.
Well, that’s what happens when you have a critical mass of credulous buyers: unscrupulous dealers are perfectly happy to take advantage of the situation. The bubble gets bigger and bigger, until poof! It bursts, and the poor souls who entrusted these crooked businessmen get holding the bag.
Running a reputable wine shop is a wonderful career. Most wine shops are reputable. There are many I’ve been in that do a fabulous job. Unfortunately, this current atmosphere of show-off seems to be fostering some bad apples. But maybe, with the arrests, detentions and lawsuits ensnaring these Ponzi wine dealers, we’ll see less of this sort of thing going forward. I do hope so. I hope that everybody will come to see that wine isn’t an artifact for collection, much less investment, like a stock certificate. What a horrible way to see this noble, divine beverage, as the liquid equivalent of loot, to be bought and traded like pork bellies, or even worse: as the garish equivalent of a gigantic diamond pinky ring.
Pete Wells’ scathing review of Per Se in the New York Times is a schadenfreud-eque joy to read. Twitter lit up with #PerSe hooting and laughing—one tweet calls Wells “my hero,” another accurately notes that “Harsh restaurant reviews are so much more fun to read than glowing ones,” while another comes right out and says what not so long ago was unsayable: Thomas Keller “is no longer the quintessential American chef.” The website amnewyork, in a fabulous gesture of lese majesté, advised Per Se to “emulate Señor Frog’s,” a moderately-placed Times Square Mexican joint Wells recently liked. Our own Inside Scoop at the San Francisco Chronicle trumpeted “Pete Wells’ Takedown” and quoted that old Shirelle’s song: “Mama said there’d be days like this.” Eater—always joyously malicious—ran “The 17 Best Reactions to Per Se’s 2-Star Takedown,” of which my favorite is “$3,000 for 4 persons? And people wonder why Bernie Sanders is surging in the polls,” although this tweet is a close second: “An hour in [to the State of the Union address] and @POTUS hasn’t mentioned that Per Se review.”
What rankled Wells, unlike his predecessor at the Times, Sam Sifton, who gave Per Se 4 stars in 2011 when he selected it for his last Times review ever and called it “the best restaurant in New York City,” was—well, pretty much everything: servors engaged in “oblivious sleepwalking” and cuisine that was “disappointingly flat-footed”: “gluey, oily” bacon-wrapped quail; mushroom pot pie that was “a swampy mess,” “limp, dispiriting yam dumplings,” a bouillon “as murky and appealing as bong water,” cheese that was “rubbery and flavorless.” (Wells’ review was so horrible that some people wondered how he could even give Per Se two stars. Mimi Sheraton, the famous food critic, tweeted, “Pete Wells in NYT review convincingly reports awful food&service&value at Per Se. Why then 2 stars meaning ‘Very good’? Why not none?”
Having myself never eaten at Per Se, I couldn’t possibly weigh in on the food quality/service issue. Maybe Wells was just having a bad hair day, and hankered to write some snark. I have on the other hand eaten at Thomas Keller’s French Laundry, on three occasions, and quite honestly my reaction was expressed perfectly by a gentleman who tweeted on the #PerSe string, “I dined at French Laundry between Christmas and New Years, and my partner and I had great expectations but were disappointed. Given the outsized reputation of French Laundry, we thought we were just rubes who didn’t understand and appreciate our experience. Our experience there was a mirror image of Mr. Wells’.”
Following my first experience at French Laundry, around a dozen years ago, I left feeling the same way: disappointed, a little confused, and fearful that I simply lacked the palate to appreciate this hautest of haute cuisine—that I was, well, a rube. It took additional disappointments, not just at French Laundry but at other gastronomic palaces, for me to finally figure out that the problem wasn’t me. Granted, dining at a place like French Laundry raises one’s expectations to levels that are probably unreasonable, and incapable of being satisfied entirely—at least, to someone like me, who has a core of skepticism about most things. I never wanted to be one of those people who eats at a place like French Laundry and finds it “unbelievable,” the “experience of a lifetime,” “breathtaking,” simply because they think they’re supposed to, and so they find what they expect.
This concept—of the skeptic versus the gullible believer—is a profound one, of course; who is better off in the long run, me with my skepticism and disappointment, or the gullible believer with his joy? I cannot answer that, because it’s an existential question that has no answer. And besides, we are who we are.
But I am also the type of person who looks for the moral of the story: and I think that the moral of Pete Wells’ review of Per Se is this: A younger generation simply isn’t as gullible as an older one. They’ve been raised in the midst of the most alarming hype the world has ever known: the media hypes everything, the news hypes everything, advertising hypes everything, your investment advisors hype everything, drug companies hype everything, everything is hustled and on steroids. Young people have reached the point where hype is not the exception but the rule. They expect hype—to be manipulated, controlled, commandeered by people who want their patronage, i.e. their money. So they react just as any psychologically healthy person would: with suspicion. This is why they have a hard time understanding why Petrus costs thousands of dollars when, really, it’s just another bottle of wine. They may realize that it’s a very special wine, that it’s famous and coveted; they may believe that it takes a certain expertise to appreciate it. But they have no problem at all conceding that they don’t have that expertise, don’t wish to have that expertise anyway, and have better things to do with their money. They do not worship expensive things the way their parents and grandparents did.
I remember one time, after eating at French Laundry ($2,400 for four people, before the tip), telling a friend I’d rather eat at my favorite Vietnamese restaurant any day of the week. Less pretension and self-consciousness; no fear of making a mistake (which fork do I use, what do I do with the napkin when I go to the restroom?), and no fear of being disappointed, because I’m never disappointed by imperial rolls, pho, cellophane noodles with shrimp. I could eat that stuff for the rest of my life. I don’t want to be a reverse-snob and say that cheap things are better. They’re not, necessarily. But good is good, and very good is very good, and great is great, and one thing I learned from being a wine critic is, You don’t have to pay a lot of money for great wine. So I guess you don’t for great food, either.
Have a lovely weekend!
Not sure I agree that “fake wines take a toll on everyday consumers,” as this opinion piece from the Boulder Weekly claims. (The article is by Terroirist.com’s David White.)
It’s hard, on the surface, to see how or why 99.9% of wine drinkers are harmed by the shenanigans of a Rudi Kurniawan. They don’t play the auction game, which so often is fueled by greed and ego. They don’t even look for those kinds of wines. Nor is there any evidence of fakery among wines that don’t cost an arm and a leg. Most people just want to have a nice wine at a fair price, and they couldn’t care less that some criminal ripped off a Koch over a bottle of ’34 Romanée-Conti.
David himself concedes that the problem of counterfeit wine means little or nothing to consumers who “can’t afford cases of grand cru Burgundy or first growth Bordeaux.” If it hurts anyone, it’s extremely wealthy collectors who probably don’t even properly appreciate these wines, but just buy them to show off: people who might deserve the comeuppance they get for spending so much money, for such venal reasons, on something as trivial as rarity wine, when so many people are trapped in poverty and despair.
(Did I just call wine “trivial” ? Yes, in this context: that there are far more things Koch money could do to elevate mankind than spending it on bragging-rights wine.)
But in order to prove his case that fake wines really can “take a toll on everyday consumers,” David cites the case of a guy, John, whose late father had loved ’61 Lafite. John then had the opportunity to buy a bottle of it, for $1,300, but—familiar with the Kurniawan case—John shied away. He explained, “I decided I could not risk paying $1,300 for something that wasn’t real.”
I can understand. “Once burned, twice shy,” goes the saying; although John hadn’t been one of Kurniawan’s victims, he apparently now sees every expensive bottle as suspect, and would rather save his hard-earned cash for bottles whose authenticity is near certain.
The case of John is an anecdote, one that “tugs at the heartstrings,” in David’s words, but I don’t think it represents the feelings of the vast majority of wine people, even those who aren’t rich but who might want to occasionally spend a lot of money on a special bottle. With all due respect to John, I just can’t believe that the Kurniawan case scares very many people off. I think they might want to have a conversation, or a series of conversations, first, to make sure that spending four figures on a bottle is really something they want to do. They should talk to the seller (restaurant, auction house, whatever), and to whatever experts they can find, asking tough questions about provenance, before making up their minds. And that’s a good thing.
The interesting issue this brings up is, Would somebody who drank a fake expensive wine, but didn’t know it, even notice it? It’s like one of those Zen koans: “If a tree falls in the forest and nobody hears it, does it make a sound?” You can rephrase it as, “If somebody put a lovely, full-bodied red wine into a Lafite bottle, would people who didn’t know about the ruse admire it anyway?” My belief, based on long experience, is, Yes, they’d like it anyway, because they were drinking the label, not the wine. And this applies, not just to everyday consumers like John, but even wine experts. Perhaps that ’61 Lafite was really a Second or Third Growth, snuck into the Lafite bottle; or maybe a 50-yer old Zinfandel. How would you ever know?
The point is that we drink wine with our minds as much as with our palates. It is in the mind that the mystery and romance of wine dwell. It’s good that wine possesses mystery and romance; may it always be so. But it’s horrible that certain wines have become a commodity, a Gobelin tapesty in a bottle for the uber-rich to compensate for their shortcomings in other areas. I’m not saying that law enforcement agencies shouldn’t go after these counterfeiters with maximum diligence. They should. Like white-collar criminals everywhere, the fakers should be held to account. It’s just that, for the average consumer, this Kurniawan business, and associated scandals, really has no impact. If somebody out there wants to drop $1,300 for a once-in-a-lifetime wine, they should do so without paranoia. Go to a reputable supplier, the vast majority of whom are ultra-dependable, and be assured. And consider that, even if the wine you buy is fake, you probably won’t know the difference anyway. So enjoy!