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Another Retailer Bites The Dust: Payless To Shutter US Operations As Bankruptcy Filing Looms

With its second bankruptcy filing in two years imminent, Bloomberg is reporting that discount shoe retailer Payless (Shoesource Inc.) will liquidate its US operations, and begin shutting down its online operations, as the US “retail apocalypse” claims its latest victim.

While it’s still unclear whether the retailer will ultimately file Chapter 11 or Chapter 7, as of now, its Latin American operations are expected to continue operating. Meanwhile, its corporate-owned stores in the US and Puerto Rico are expected to remain open through March. The Topeka, Kansas-based retailer has been looking for a “Debtor-in-Possession” loan to see it through the proceedings.

Payless

Last year saw bankruptcy filings from once-iconic retailers like Toys R’ Us and Sears. And already this year, at least half a dozen names have gone bust, including Shopko, FullBeauty Brands, Charlotte Russe, Things Remembered and Gymboree, which like Payless, also filed for bankruptcy last month and is also liquidating most of its operations. In total, since 2016, some 35 retail chains have filed for chapter 11 reporting more than $100M in debt according to Reorg First Day.

Since 2016, 35 retail chains have filed for chapter 11 relief reporting more than $100M in liabilities on their bankruptcy petitions: pic.twitter.com/XwjwTdvKsL

— Reorg First Day (@ReorgFirstDay) November 20, 2018

Payless, which employs more than 18,000 globally and operates about 3,600 outlets worldwide, with more than 2,700 in North America, was founded in 1956 with the goal of selling affordable shoes in a self-service setting and is, or rather was, the largest specialty footwear chain in the Western Hemisphere.

In what has become a common theme among troubled retailers, some of whom have continued to do a brisk (or brisk enough) business, the company was doing great until its 2012 LBO by Golden Gate Capital and Blum Capital Partners, which saddled the company with untenable debt, and ended up filing for bankruptcy protection in April 2017. A few months later, it emerged with fewer stores, half the debt load, creditors owning the equity.

All of these bankruptcies have happened during a period when interest rates are relatively low and economic growth and consumption (the most recent retail sales report notwithstanding) have been pretty robust.

So just imagine what will happen to America’s brick-and-mortar stalwarts when the next recession finally arrives.

Elon Musk-Backed Software Can Churn Fake News Stories And Is “Too Dangerous To Release”

The ability of technology to spread disinformation has been a favorite talking point of the left since the 2016 election, and now it appears that environmentally-conscious poster-boy, Elon Musk, is contributing to the problem. OpenAI, a company co-founded by Musk, has rolled out a piece of software that can produce real looking fake news articles after being given just a few pieces of information to work with.

An example of this was recently reported by technology website stuff, detailing an example published last Thursday. The system was given sample text of:  “A train carriage containing controlled nuclear materials was stolen in Cincinnati today. Its whereabouts are unknown.”

From there, software was able to write a seven paragraph news story, including quotes from government officialswith the only catch being that the story was 100% made up.

We’ve trained an unsupervised language model that can generate coherent paragraphs and perform rudimentary reading comprehension, machine translation, question answering, and summarization — all without task-specific training: https://t.co/sY30aQM7hU pic.twitter.com/360bGgoea3

— OpenAI (@OpenAI) February 14, 2019

New York University computer scientist Sam Bowman said: “The texts that they are able to generate from prompts are fairly stunning. It’s able to do things that are qualitatively much more sophisticated than anything we’ve seen before.”

While OpenAI claims it is “aware of the concerns around fake news” its co-founder Musk has been vehemently outspoken about the quality of news coverage he, and his portfolio of companies, has received over the last few years. Back in May of 2018, Musk was so concerned with truth in news, he famously came up with the idea of creating a site where the public can “rate the core truth” of any article and track the credibility score of its author.

Going to create a site where the public can rate the core truth of any article & track the credibility score over time of each journalist, editor & publication. Thinking of calling it Pravda …

— Elon Musk (@elonmusk) May 23, 2018

The software creation is trained in language modeling, which involves predicting the next word or piece of text based on knowledge of all previous words, the same way your auto-complete works on your phone, Gmail account or in Skype. The software can also be used for translation and question answering. The positive is that the software can help creative writers generate ideas or dialogue. The software can also be used to check for grammatical errors and hunt for bugs in software code, according to the company.

As Gizmodo notes, the researchers used 40GB of data pulled from 8 million web pages to train the GPT-2 software. That’s ten times the amount of data they used for the first iteration of GPT. The dataset was pulled together by trolling through Reddit and selecting links to articles that had more than three upvotes. When the training process was complete, they found that the software could be fed a small amount of text and convincingly continue writing at length based on the prompt. It has trouble with “highly technical or esoteric types of content” but when it comes to more conversational writing it generated “reasonable samples” 50 percent of the time.

In one example, the software was fed this paragraph:

In a shocking finding, scientist discovered a herd of unicorns living in a remote, previously unexplored valley, in the Andes Mountains. Even more surprising to the researchers was the fact that the unicorns spoke perfect English.

Using those two sentences, the AI was able to continue writing this whimsical news story for another nine paragraphs in a fashion that could have believably been written by a human being. Here are the next few machine-paragraphs that were produced by the machine:

The scientist named the population, after their distinctive horn, Ovid’s Unicorn. These four-horned, silver-white unicorns were previously unknown to science.

Now, after almost two centuries, the mystery of what sparked this odd phenomenon is finally solved.

Dr. Jorge Pérez, an evolutionary biologist from the University of La Paz, and several companions, were exploring the Andes Mountains when they found a small valley, with no other animals or humans. Pérez noticed that the valley had what appeared to be a natural fountain, surrounded by two peaks of rock and silver snow.

GPT-2 was also remarkably good at adapting to the style and content of the prompts it’s given. The Guardian was able to take the software for a spin and tried out the first line of George Orwell’s Nineteen Eighty-Four: “It was a bright cold day in April, and the clocks were striking thirteen.” The program picked up on the tone of the selection and proceeded with some dystopian science fiction of its own:

I was in my car on my way to a new job in Seattle. I put the gas in, put the key in, and then I let it run. I just imagined what the day would be like. A hundred years from now. In 2045, I was a teacher in some school in a poor part of rural China. I started with Chinese history and history of science.

The OpenAI researchers found that GPT-2 performed very well when it was given tasks that it wasn’t necessarily designed for, like translation and summarization. These excellent results have freaked the researchers out. One concern they have is that the technology would be used to turbo-charge fake news operations. The Guardian published a fake news article written by the software along with its coverage of the research. The article is readable and contains fake quotes that are on topic and realistic. The grammar is better than a lot what you’d see from fake news content mills. And according to The Guardian’s Alex Hern, it only took 15 seconds for the bot to write the article.

The good news is that journalists – already threatened by the collapse in the ad-revenue supported business model, aren’t about to  go extinct just yet.

OpenAI has decided not to publish or release sophisticated versions of its software as a precaution, but it has created a tool that lets people experiment with the algorithm and see what type of text it can generate. The company says that the system’s abilities are not consistent enough to “pose an immediate threat”.

Other concerns that the researchers listed as potentially abusive included automating phishing emails, impersonating others online, and self-generating harassment. But they also believe that there are plenty of beneficial applications to be discovered. For instance, it could be a powerful tool for developing better speech recognition programs or dialogue agents.

OpenAI plans to engage the AI community in a dialogue about their release strategy and hopes to explore potential ethical guidelines to direct this type of research in the future, although we are confident that various “deep state” organization already posses a similar, if not far more advanced version.

Musk helped kickstart the nonprofit research organization in 2016 along with Sam Altman. Musk’s foundation grants that were used to help start the company became a topic of controversy in a recent article that we published about Musk’s charitable foundation.

First US Military Planes Land Near Venezuela Border With Aid In Defiance Of Maduro

The Pentagon is now publicizing its first military airlift of Venezuelan aid delivered to the Colombian town of Cucuta on Saturday, which sits on the border shared by the two countries, despite embattled President Nicolas Maduro vowing to keep such “unauthorized” aid out by stationing troops along the border.

Washington is using aid delivery to undermine the socialist Maduro government in Caracas, which has blasted US-led attempts to foment coup and fuel unrest.

AP photograph of C-17 landing in Colombia on Saturday, Feb. 16

AP photographs and video confirmed that two of three scheduled Air Force C-17 cargo planes that left Homestead Air Reserve Base in Florida landed at the border city on Saturday. The town has become a staging ground of sorts for aid that supporters of US-backed opposition head Juan Guaido say they intend to distribute. 

“This wasn’t the first, and it won’t be the last,” USAID Administrator Mark Green told the AP while on the tarmac in Cucuta receiving the aid. “More is on the way,” he promised. 

According to the AP it’s certainly not the first shipment of official US humanitarian aid; however, it is the first highly significant and symbolic moment it was brought in on massive US Air Force cargo planes. 

04-4134 & two other #USAF C-17As transported over 200 tons of #USAID consisted of nutritional supplements for 3,500 children, and hygiene kits for 25,000 people for 2 months. They flew from Homestead AFB, #Miami, #Florida to Cúcuta, #Colombia close to the border with #Venezuela. pic.twitter.com/5NJvvvNx7d

— Babak Taghvaee (@BabakTaghvaee) February 16, 2019

The AP noted

Commercial planes had been used for earlier shipments of aid, which is aimed at dramatizing the economic crisis — including hyperinflation and shortages of food and medicine — gripping Venezuela. Critics say last year’s re-election was fraudulent, making Maduro’s second term illegal.

“We are saving lives with these airplanes,” an exiled politician said to be coordinating the international aid effort for Guaido, Lestor Toledo, told the AP. However, interestingly the report itself highlighted that Washington is seeking to exploit the optics of Venezuela’s economic collapse overseen by an inept regime through the humanitarian shipments. 

#BREAKING: The first out of three C-17As of #USAF carrying medical & food aids for people of #Venezuela arrived #Columbia at 17:30Z. The C-17A with 04-4134 serial number (RCH382 call-sign) had departed Homestead AFB, #Miami at 14:15Z.Its cargo can feed 3,500 children for 2 months pic.twitter.com/UPhYLz10vw

— Babak Taghvaee (@BabakTaghvaee) February 16, 2019

Maduro, meanwhile, has slammed the “political show” surrounding the issue of aid delivery. “They hang us, steal our money and then say ‘here, grab these crumbs’ and make a global show out of it,” Maduro told reporters on Thursday. “With dignity we say ‘No to the global show.’ Whoever wants to help Venezuela is welcome, but we have enough capacity to pay for everything that we need.”

Saturday’s military flights are reported have “tons” of cargo which includes high-energy food items and hygiene kits, and medical supplies — enough for 25,000 people according to the AP. 

Reuters reported earlier this week that US humanitarian supplies and cargo are currently amassing along a Colombian border town, but there doesn’t appear to be confirmation that any of it has entered Venezuela:

Senior U.S. officials last week heralded their country’s efforts to move aid to Venezuela’s doorstep, after U.S. supplies were among those delivered to the first collection point established, in the Colombian border town of Cucuta.

There has been no sign of the aid that is being stockpiled in Cucuta leaving the warehouse.

Brazil is also reportedly being used as an aid transit point, however, Brazilian authorities have yet to comment on any specific shipping points. 

Guaido has over the past week personally appealed to the military to allow the aid in, while also issuing a general amnesty order for any military officer who defects from Maduro, something which the opposition currently doesn’t have the power to enforce.

Argentina Settles Export Deal With Paraguay Using Bitcoin

Authored by Ana Berman via CoinTelegraph

Photo credit: CoinTelegraph

Argentina has settled an export deal with Paraguay in Bitcoin (BTC), Cointelegraph en Español reported on Thursday, Feb. 14.

In a reported first for both countries, Paraguay has bought pesticides and fumigation products worth $7,100 from Argentina, using cryptocurrency to settle the deal. The purchase was paid for in BTC and then converted into Argentine peso to settle accounts with the exporter of the agricultural chemicals.

To proceed with the payments, Argentina applied to Bitex — a Latin American financial services provider that supports Bitcoin payments.

According to the chief marketing office of Bitex, Manuel Beaudroit, the company is a part of the Argentine government’s program Exporta Simple, which facilitates the export of goods and services worth less than $15,000. Bitex, in its turn, aims to make cross-border payments for such deals more efficient.

As Cointelegraph reported, Bitex previously participated in a crypto project initiated by Argentine bank Masventas. In May 2018, Masventas announced it was considering creating an alternative to the SWIFT payment system used between banks globally. Bitex was appointed to provide the necessary ecosystem for supporting BTC transactions.

In other news for Argentina, this month, the country’s official state transport card SUBE (Sistema Único de Boleto Electrónico) — used by over seven million people in 37 locations — has startedaccepting BTC.

Meanwhile in Paraguay, global blockchain tech firm and Bitcoin mining manufacturer Bitfury partnered with South Korean peer-to-peer knowledge commons research firm, Commons Foundation, to launch several mining facilities in the country.

Citi May Liquidate Over $1 Billion In Venezuela Gold Within Weeks

Back in April 2015, when Venezuela still had a somewhat functioning economy and hyperinflation was not yet rampant, the cash-strapped country quietly conducted a little-noticed gold-for-cash swap with Citigroup as part of which president Nicolas Maduro converted part of his nation’s gold reserves into at least $1 billion in cash through a swap with Citibank.

As Reuters reported then, the deal would make more foreign currency available to President Nicolas Maduro’s socialist government as the OPEC nation struggled with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices.

As Reuters further added: “former central bank director Jose Guerra and economist Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica said in separate interviews that the operation had been carried out.  A source at the central bank told Reuters last month it would provide 1.4 million troy ounces of gold in exchange for cash. Venezuela would have to pay interest on the funds, but the bank would most likely be able to maintain the gold as part of its foreign currency reserves.”

Needless to say, the socialist country’s economic situation is orders of magnitude worse now, and in addition to a full-blown blockade of the country’s only key export, petroleum, the president has a simmering, US-backed coup to contend with as well.

Fast forward three years when Venezuela’s gold swap with Citi is about to mature, and according to lawmaker Angel Alvarado, advisor to Venezuelan opposition leader and self-proclaimed president, Juan Guaido, Citi would be entitled to keep the gold if cash-strapped Venezuela does not pay the loan when it expires in March. Considering the country’s financial dire straits, the last thing Venezuela can afford is to pay Citi to reclaim ownership of the collateral.

As a result, on Friday, Guaido’s advisors asked Citibank not to invoke the guarantee and not to claim the gold put up as collateral for the 2015 loan made to the government of President Nicolas Maduro if his administration does not make payments on time, Reuters reported, citing a Venezuela lawmaker.  Opposition leaders have claimed that Maduro usurped power last month when he was sworn in to a second term after a disputed election widely described as a sham.

“Citibank has been asked to stand by and not invoke the guarantee until the end of the usurpation,” Alvarado said in an interview. “We don’t want to lose the gold.”

Confirming what we reported back in 2016, a finance industry source told Reuters that the gold is worth $1.1 billion.

While it is unclear whether Citi will comply with the requests, there is now a non-trivial possibility that the US bank may find itself liquidating over $1 billion in Venezuela bullion in the open market, an operation which could potentially send the price of the precious metal sharply lower.

* * *

Meanwhile, far from pushing to reclaim its gold, Maduro has only been selling more of it, as Abu Dhabi investment firm Noor Capital confirmed when it said earlier this month that it bought 3 tons of gold from Venezuela’s central bank, but would halt further transactions until the country’s situation stabilizes.

Guaido has also asked British authorities to prevent Maduro from gaining access to gold reserves held in the Bank of England, which holds around $1.2 billion in bullion for Maduro’s government. So far the British central bank has refused to comply with Maduro’s demands to remit the gold back to Venezuela, although when asked for comment, the BOE said it does not comment on client operations.

Meanwhile, Hugo Chavez, who spent the last years of his life repatriating Venezuela’s gold is spinning in his grave.