Ashley Madison gets turned out into the street.

I began writing about Ashley Madison (A.M.) last Friday and I plan on monitoring the situation as things progress.  I suspect it could be as instructive as was my related insight into the Ducks.

Back in Oct 2013,  A.M was introduced to the public by articles such as Wall St Loves a Cheater.  In them we are introduced to the CEO who is presented as a rich guy who is full of himself and his ability to attract big investment in the business of infidelity.  After all, in his words, "The pursuit of an infidelity is a biological drive. We underestimate our ability to withstand temptation.".  Well, maybe he's right about that.  But these are not things that conservative people want to see their 401ks and pensions invested in.  Back in 2013, that didn't matter.  If some idea could make money, it attracted investment dollars without a second thought.

But not no more, people.  Not no more.  The excuse for the coming collapse of Ashley Madison inc. will be the data breach but the reason it will receive much harsher treatment for its missteps will be because a new and rapidly growing conservative lean is sweeping the nation and the world.  Harsher than who?  Well, harsher than IBM who got in no trouble and harsher than Target.  Harsher than the government too.  A.M. will probably be bankrupted by this within6-9 months according to my models. By the way, while IBM's data breech happened way back in 2007, the courts just ruled in 2015 that their insurance company didn't have to pay the piddling $7mn in "losses" (AKA claims).  Two things are of note about that:

1. The diminutive size of the claims.  Nobody went after big blue for more than nuisance money back then.  If the same kind of thing had happened today I bet the damages would be hundreds of millions.  They certainly will be for A.M.
2. Why now?  Why did it take IBM so long to get punished for its caviler treatment of personal data?  I believe that people are just beginning to care more these days.  During the liberal years we were all told "you have no privacy anymore".  
1. This was used as the excuse not to even care about privacy.  But privacy has always been important to the herd whether or not people believed it.  For a time, people were talked out of caring (aka "magick").
2. Going forward I think we will see people begin to care a lot more about their personal privacy and I think it will drive new security solutions that are designed for the end user as opposed to being designed for someone else's benefit in spite of the end user.  For example, A.M. collected a ton of data that was supposedly needed for the business including name, address, credit card, and type of person that the client wanted an affair with.  All of this was stored in a giant data base which pretty much anyone within A.M. could have access to and in fact I suspect that it will turn out to have been an inside job. In the future I expect to see security solns wherein people sign up for these things, including payment info, essentially anonymously.  Payment will be provided by a virtual credit card and what the Hell do companies need my real name for anyhow?  For my security or for their ability to turn this info into more profits?  I propose that my security is enhanced when I am anonymous.  So if you want payment from me in the future, all you will get is a virtual account and a GUID identifier (Globally Unique ID).  No more name, address telephone number, email address, etc.  Look for someone to create some kind of person virtualization service that lets people interact with the economy while remaining anonymous.

The reason I watch these things, as long time readers know, isn't to play morality cop.  As a libertarian I can disagree with something without believing that it is any of my business to try do anything about it or to control it.  The reason I care to expend energy on it is because conservatism is going to be the reason why the global debt Ponzi finally collapses.  Liberals create debt based consumption and bubble situations in all things.  Conservatives, not so much.  Liberals (be they dem or gop factions of the Grand Socialist Party which is running this country) were the underlying cause of Carlin's "...and nobody seemed to notice, nobody seemed to care".  Conservatives are going to react to the con men more like Kruger water buffalo (search the blog if you are new and don't understand these references).

In the future, investors will look back at the harsh relative treatment that Ashley Madison is going to receive (I believe it is already an existential threat) and they will receive and understand the message that society is now sending about these kinds of seedy investments.  That message will be that anyone who invests in these things is now taking on far more risk than before.  I'm going to coin another new term called a "blowback dividend".   It refers to the new costs that will have to be factored in for dealing with investments which may offend the new conservative nature of the public.  Such dividends are negative in nature and will thus have to be factored into the business case once such dividends are understood to be part of the investing landscape.

When liberalism was the prevailing mood of the herd, Ashley Madison made bank by helping people have extramarital sex.  Now that conservatism (real conservatism, not fake neocon, worse than liberal conservatism like that of GW Bush) is again gaining control Ashley Madison is the one who will be getting screwed.