Short Your Kids, Go Long Your Neighbor

Convergence is a powerful force in the knowledge economy. It magnifies the impact of trends in information identification, analysis and dispersal.

Separate but mutually supportive developments of late suggest that the application of personal data to money-making by and for individuals may be closer than we think - or once we learn more about it, would like.

In short, the three related trends are 1)big data brokers are starting to make the information they collect available to the people who the knowledge concerns 2) app developers are selling to insurers the information they collect about people's health and medical inputs or queries and 3) startups are emerging to try to monetize the success of celebrities based on what is known about their financial performance.

So, by extension, once we have enough data on the relative financial impact of a bachelor's degree from Dartmouth versus one from Florida State, or of marrying spouses with certain genetic characteristics, or of eating a lot of hamburgers versus those on a quinoa and acai diet, we can then bet on everyone we know. There will, of course, be some exceptions that prove the rule (or not), and some trends may change over time (quinoa might turn out to be toxic in moderate quantities...to the relief of many who feel obligated to say they like it) but we will have established a new market in human futures. On which money will be raised from pension funds and the like to offset traditional investments. Joggers could be aggregated in specific tranches with unique coupons and delivery dates, as could barbecue eaters, chewing tobacco fanciers and Dancing with Stars aficionados. Or we might mix and match. We might even be able to bet, errr, invest in that smart niece or athletically gifted nephew.

Which is to say, in all seriousness, that information stimulates and creates markets. Whether we like that or not, is less important than what we are prepared to do to demand ownership of the information so that we may profit from it. JL

Cathy O'Neill comments in mathbabe via Naked Capitalism:

I think it’s not too much of a stretch to acknowledge a reason for everyone to know everyone else’s credit score! Namely, we can bet on each other’s futures!
Yet another aspect of Gary Shteyngart’s dystopian fiction novel Super Sad True Love Story is coming true for reals.
Besides anticipating Occupy Wall Street, as well as Bloomberg’s sweep of Zuccotti Park (although getting it wrong on how utterly successful such sweeping would be), Shteyngart proposed the idea of instant, real-time and broadcast credit ratings.
Anyone walking around the streets of New York, as they’d pass a certain type of telephone pole – the kind that identifies you via your cell phone and communicates with data warehousing services and databases – would have their credit rating flashed onto a screen. If you went to a party, depending on how you impressed the other party go-ers, your score could plummet or rise in real time, and everyone would be able to keep track and treat you accordingly.
I mean, there were other things about the novel too, but as a data person these details certainly stuck with me since they are both extremely gross and utterly plausible.
And why do I say they are coming true now? I base my claim on two news stories I’ve been sent by my various blog readers recently.
[Aside: if you read my blog and find an awesome article that you want to send me, by all means do! My email address is available on my "About" page.]
First, coming via Suresh and Marcos, we learn that data broker Acxiom is letting people see their warehoused data. A few caveats, bien sûr:

1. You get to see your own profile, here, starting in 2 days, but only your own.
2. And actually, you only get to see some of your data. So they won’t tell you if you’re a suspected gambling addict, for example. It’s a curated view, and they want your help curating it more. You know, for your own good.
3. And they’re doing it so that people have clarity on their business.
4. Haha! Just kidding. They’re doing it because they’re trying to avoid regulations and they feel like this gesture of transparency might make people less suspicious of them.
5. And they’re counting on people’s laziness. They’re allowing people to opt out, but of course the people who should opt out would likely never even know about that possibility.
6. Just keep in mind that, as an individual, you won’t know what they really think they know about you, but as a corporation you can buy complete information about anyone who hasn’t opted out.

In any case those credit scores that Shteyngart talks about are already happening. The only issue is who gets flashed those numbers and when. Instead of the answers being “anyone walking down the street” and “when you walk by a pole” it’s “any corporation on the interweb” and “whenever you browse”.
After all, why would they give something away for free? Where’s the profit in showing the credit scores of anyone to everyone? Hmmmm….
That brings me to my second news story of the morning coming to me via Constantine, namely this TechCrunch story which explains how a startup called Fantex is planning to allow individuals to invest in celebrity athletes’ stocks. Yes, you too can own a tiny little piece of someone famous, for a price. From the article:

People can then buy shares of that player’s brand, like a stock, in the Fantex-consumer market. Presumably, if San Francisco 49ers tight end Vernon Davis has a monster year and looks like he’s going to get a bigger endorsement deal or a larger contract in a few years, his stock would rise and a fan could sell their Davis stock and cash out with a real, monetary profit. People would own tracking or targeted stocks in Fantex that would depend on the specific brand that they choose; these stocks would then rise and fall based on their own performance, not on the overall performance of Fantex.

Let’s put these two things together.
I can’t think of any set-up more exhilarating to the community of hedge fund assholes than a huge, new open market – containing profit potentials for every single citizen of earth – where you get to make money when someone goes to the wrong college, or when someone enters into an unfortunate marriage and needs a divorce, or when someone gets predictably sick. An orgy in the exact center of tech and finance.
Are you with me peoples?!
I don’t know what your plans are, but I’m getting ready my list of people to short in this spanking new market.