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Paul Merrell

Toxic US corporate culture 'unchanged': watchdog - Yahoo News - 0 views

news.yahoo.com/years-financial-041652986.html

banksters TARP fraud convictions

shared by Paul Merrell on 30 Oct 13 - No Cached
  • Five years after the US financial crisis forced the massive government TARP bailout, the US corporate culture remains toxic and breeding crime, the watchdog for the bailout program said Tuesday.More than 300 people in the banking, housing and securities industries are in the hands of the criminal system, whether it is a charge, a conviction or a sentencing, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) said in a quarterly report to Congress."The financial system has stabilized, but the toxic corporate culture that led up to the crisis and TARP has not sufficiently changed," said Christy Romero, the special inspector general."At the core of the crisis was a pervasive culture at institutions of rampant risktaking and greed combined with significant unchecked power," she said.
  • SIGTARP was launched in early 2009 to detect fraud in the massive TARP bailout program. Within weeks of the Lehman Brothers bankruptcy, the government set up the $700 billion TARP to prop up the collapsing financial system. In 2010, the cap on the Treasury's authority to purchase and guarantee assets under TARP was reduced to $475 billion.To date, 65 people have been sentenced to prison for their crimes investigated by SIGTARP and its law enforcement partners, 112 have been convicted and await sentencing and 154 individuals have been criminally charged and face trial on those charges, the report said.In addition, 60 people have been banned from their industries."Many of these defendants were at the highest levels of banks or companies that applied for or received TARP bailout money. They were trusted to exercise good judgment and make sound decisions. However, they abused that trust. Many times they abused that trust for their own personal benefit," the report said.
  • As of September 30 Treasury had $30.7 billion in write-offs, losses or money not collectible from the program, according to the report."Treasury's write-offs and realized losses are money that taxpayers will never get back. Treasury generally expects the amounts currently not collectible will also be lost," the agency said.The watchdog was harshly critical of the Treasury's oversight of the Hardest Hit Fund, set up in February 2010 to help families in places hurt the most by the housing crisis.The Treasury allocated $7.6 billion in TARP funds for the HHF program in 18 states and Washington, DC, administered by local authorities.But states have reduced their proposed numbers of homeowners needing help, and the Treasury has ignored the SIGTARP's conclusions of an audit reported in April 2012.
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  • "Rather than fix the problem that SIGTARP warned Treasury about in its audit, Treasury allowed the problem to get worse. Rather than following SIGTARP’s recommendations, which were designed to make Treasury and states set goals and work hard to achieve those goals, Treasury is refusing to hold itself or the states accountable to any goal of the number of homeowners to be assisted in HHF, and the result has been that the program is reaching far fewer homeowners than the states expected," the agency said.As of June 30, 2013, the latest data available, it said, states had spent only 22 percent, or $1.7 billion, of the TARP funds and the program had helped only 27 percent of the homeowners that states had anticipated helping in 2011.
  • Paul Merrell on 30 Oct 13
     
    So many convictions. But somehow, I missed the news about executives at the too-big-to-fail banks being even prosecuted, let alone being convicted. But I did hear about a few of them becoming Obama Administration officials and bankster industry regulators. I'd really like to see a breakdown of who was convicted, of what, and their former positions. And for the 154 awaiting trial, what they're charged with and the positions they occupied at the relevant times. Forgive me for my cynicism, but those in charge of the too-big-to-fail frauds seem to be buying deals not to prosecute people criminally in return for civil penalties that are far less than the money gained by their frauds. Perhaps a relevant reform would be to limit the Justice Department and SEC's ability to bring civil cases against corporations to situations in which they have already secured a criminal conviction of one or more of the the company's principles?  Civil penalties levied against corporations have done little to deter bankster fraud. 
Paul Merrell

12 Banks Reveal 'Living Wills' That Hint Toward a Future Bail-in | nsnbc international - 0 views

nsnbc.me/...t-hint-toward-a-future-bail-in

banksters major-U.S.-banks bail-ins living-wills too-big-to-fail

shared by Paul Merrell on 07 Jul 15 - No Cached
  • Twelve major banks have made their living wills open to the public in response to US regulators pushing for more “convincing plans” for self-dismantling should their operations fail.
  • The purpose of living wills is a way “to give bankers and regulators a clearer understanding of a bank’s operations and its assets and liabilities [and] map out the steps the banks would take to distribute large losses among stakeholders.” The Federal Reserve Bank (FRB) and the Federal Deposit Insurance Corp (FDIC) are overseeing the bank’s contingency plans, ensuring that no bank is “too big to fail”. This includes financial institutions with more than $50 billion in assets; as well as non-financial firms that are considered systemically important as understood by the US Department of Treasury (USDT) Financial Stability Oversight Council (FSOC). The banks participating in this exercise include:
  • • JPMorgan Chase & Co • Morgan Stanley • Bank of America • Credit Suisse Group AG • Goldman Sachs Group • Wells Fargo & Co • State Street Corp • Bank of New York Mellon Corp • UBS Group AG • Deutsche Bank AG • Barclays Plc Should another financial crisis rear its head again, these revelations provide investors and traders a better sense of the standing of banks.
  • ...4 more annotations...
  • Collectively, the banks divulged that they have “stockpiled long-term debt” within holding companies (or the parent company that owns the bank) to make their portfolios appear to be “less complex”. In other words, banks have placed their derivatives (or stockpiled long-term debt) within the main corporation that owns their subsidiaries. The only problem is that if the parent fails, so do its “children”. The bank’s assets could be placed into receivership with the intention of being split up and auctioned off; however some corporations abuse receivership and bankruptcy to make investors and creditors think they are dead in the water only to pull out at the last minute and enjoy large primary debt write-offs. This is a sort of corporate version of playing possum.
  • This classic con tactic would provide the unique advantage of not having to go to the Senate and demand a taxpayer bailout. The banks could simply file for bankruptcy and exert social pressure via public outcry, protests and demands of the people that Congress consider another bailout. In this scenario, the parent company gets saved and not the subsidiaries. This tactic is a reserve version of what happened after the crash in 2008. Regarding the bank’s contingency plans, JPMorgan’s “hypothetical death”would see the bank downsize by a 3rd and provide a resolve for the bank “without systemic disruption or taxpayer support”. Citigroup has proposed shrinking by selling off $300 billion in corporate assets and “cut US retail banking to about $200 billion”; as well as get rid of broker-dealers.
  • Mark Costigilo, spokesperson for Citigroup, explained that should Citigroup go into bankruptcy, their living will “demonstrates that we can do so without the use of taxpayer funds and without adverse systemic impact.” And Bank of America (BoA) stated that their rise out of bankruptcy would involve the unloading of $1.2 trillion in assets; as well as “shedding most of … non-bank operations”. Last year, the major banks were told to revise previously submitted living wills because their plans did not provide a “credible or clear path through bankruptcy that doesn’t require unrealistic assumptions and direct or indirect public support.” All of this adds up to a bail-in, as predicted by economic analyst Jim Sinclair who said: “Bail-ins are coming to North America without any doubt, and will be remembered as the ‘Great Leveling,’ of the ‘great Flushing’ (of Lehman Brothers). Not only can it happen here, but it will happen here. It stands on legal grounds by legal precedent both in the U.S., Canada and the U.K.”
  • Sinclair pointed out: “Bail-ins do not require a crisis to occur and can surface one bank at a time, spread out over years. The major situation is deposits above insurance levels in banks too big to fail. Those deposits are directly in harm’s way.”
Gary Edwards

Is Bank of America Headed for the Glue Factory? » Counterpunch: Tells the Facts, Names the Names - 0 views

www.counterpunch.org/...ca-headed-for-the-glue-factory

Banksters Federal-Reserve-Bankster-Cartel Bank-of-America FDIC banksters

shared by Gary Edwards on 22 Oct 11 - No Cached
  • The GAO detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves….
  • The corporate affiliations of Fed directors from such banking and industry giants as General Electric, JP Morgan Chase, and Lehman Brothers pose ‘reputational risks’ to the Federal Reserve System, the report said. Giving the banking industry the power to both elect and serve as Fed directors creates ‘an appearance of a conflict of interest,’ the report added….
  • ‘If we [i.e. the World Bank] had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure.’” (“Non-Partisan Government Report: Federal Reserve Is Riddled with Corruption and Conflicts of Interest,” Washington’s Blog)
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  • this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral.
  • This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.” (Naked Capitalism)
  • Let’s say the second biggest bank in the country is starting to teeter because it’s loaded with all manner of dodgy (toxic?) derivatives that could blow up at any minute and take down the entire global financial system. Would you (a) Wait until the bombshell exploded knowing that the only choice you would then have would be to further expand the Fed’s balance sheet by another couple trillion dollars or (b) Try to sleaze the whole thing off on Uncle Sam and let the taxpayers pick up the tab?
  • Gary Edwards on 22 Oct 11
     
    Nice catch by Marbux.  A Bloomberg article explains how Bank of America is moving high risk derivatives into the coffers of a federally insured subsidiary.  Meaning, when (not if) the derivatives fail, the tax payers will get stuck with covering the losses and making the Banksters whole. The article also explains the recent GAO audit of the Federal Reserve where it was disclosed that through interlocking directories and shareholdings, the Bankster industry is in control of the Federal Reserve.  Awful, sickening stuff.  But a good catch nevertheless. excerpt: There are two things worth noting in this article. First, according to Bloomberg, "the transfers (of derivatives) are being requested by counterparties." Well, how do you like that? In other words, the investors on the other side of these contracts want Merrill to put them under an insurance umbrella provided by the FDIC. Now, why would that be? The only reason I can come up with, is that they know that a lot of these complex instruments are undercapitalized and ready to implode, so they want to make sure they get their money back any way possible. That means they need to latch on to Uncle Sam without anyone knowing about it. But, like we said, the cat is out of the bag. The other thing worth noting is that the Fed and the FDIC are at loggerheads over the matter. ("The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting.") Now, that's not good at all, in fact, it's a big red flag that suggests the Fed trying to pull a fast one on the American people. One does not have to look too far for other examples of Fed misbehavior; the endless bailouts (TARP, QE1 and 2, Operation Twist, ZIRP, etc) In fact, the Fed's history is a tedious chronicle of one shifty deal after another. This is just more of the same; another gift to big finance at the public'
Paul Merrell

Edward Snowden: A 'Nation' Interview | The Nation - 0 views

www.thenation.com/...wden-exile-exclusive-interview

surveillance state Snowden-interview

shared by Paul Merrell on 30 Oct 14 - No Cached
  • Snowden: That’s the key—to maintain the garden of liberty, right? This is a generational thing that we must all do continuously. We only have the rights that we protect. It doesn’t matter what we say or think we have. It’s not enough to believe in something; it matters what we actually defend. So when we think in the context of the last decade’s infringements upon personal liberty and the last year’s revelations, it’s not about surveillance. It’s about liberty. When people say, “I have nothing to hide,” what they’re saying is, “My rights don’t matter.” Because you don’t need to justify your rights as a citizen—that inverts the model of responsibility. The government must justify its intrusion into your rights. If you stop defending your rights by saying, “I don’t need them in this context” or “I can’t understand this,” they are no longer rights. You have ceded the concept of your own rights. You’ve converted them into something you get as a revocable privilege from the government, something that can be abrogated at its convenience. And that has diminished the measure of liberty within a society.
  • From the very beginning, I said there are two tracks of reform: there’s the political and the technical. I don’t believe the political will be successful, for exactly the reasons you underlined. The issue is too abstract for average people, who have too many things going on in their lives. And we do not live in a revolutionary time. People are not prepared to contest power. We have a system of education that is really a sort of euphemism for indoctrination. It’s not designed to create critical thinkers. We have a media that goes along with the government by parroting phrases intended to provoke a certain emotional response—for example, “national security.” Everyone says “national security” to the point that we now must use the term “national security.” But it is not national security that they’re concerned with; it is state security. And that’s a key distinction. We don’t like to use the phrase “state security” in the United States because it reminds us of all the bad regimes. But it’s a key concept, because when these officials are out on TV, they’re not talking about what’s good for you. They’re not talking about what’s good for business. They’re not talking about what’s good for society. They’re talking about the protection and perpetuation of a national state system. I’m not an anarchist. I’m not saying, “Burn it to the ground.” But I’m saying we need to be aware of it, and we need to be able to distinguish when political developments are occurring that are contrary to the public interest. And that cannot happen if we do not question the premises on which they’re founded. And that’s why I don’t think political reform is likely to succeed. [Senators] Udall and Wyden, on the intelligence committee, have been sounding the alarm, but they are a minority.
  • The Nation: Every president—and this seems to be confirmed by history—will seek to maximize his or her power, and will see modern-day surveillance as part of that power. Who is going to restrain presidential power in this regard? Snowden: That’s why we have separate and co-equal branches. Maybe it will be Congress, maybe not. Might be the courts, might not. But the idea is that, over time, one of these will get the courage to do so. One of the saddest and most damaging legacies of the Bush administration is the increased assertion of the “state secrets” privilege, which kept organizations like the ACLU—which had cases of people who had actually been tortured and held in indefinite detention—from getting their day in court. The courts were afraid to challenge executive declarations of what would happen. Now, over the last year, we have seen—in almost every single court that has had this sort of national-security case—that they have become markedly more skeptical. People at civil-liberties organizations say it’s a sea change, and that it’s very clear judges have begun to question more critically assertions made by the executive. Even though it seems so obvious now, it is extraordinary in the context of the last decade, because courts had simply said they were not the best branch to adjudicate these claims—which is completely wrong, because they are the only nonpolitical branch. They are the branch that is specifically charged with deciding issues that cannot be impartially decided by politicians. The power of the presidency is important, but it is not determinative. Presidents should not be exempted from the same standards of reason and evidence and justification that any other citizen or civil movement should be held to.
  • ...14 more annotations...
  • The Nation: Explain the technical reform you mentioned. Snowden: We already see this happening. The issue I brought forward most clearly was that of mass surveillance, not of surveillance in general. It’s OK if we wiretap Osama bin Laden. I want to know what he’s planning—obviously not him nowadays, but that kind of thing. I don’t care if it’s a pope or a bin Laden. As long as investigators must go to a judge—an independent judge, a real judge, not a secret judge—and make a showing that there’s probable cause to issue a warrant, then they can do that. And that’s how it should be done. The problem is when they monitor all of us, en masse, all of the time, without any specific justification for intercepting in the first place, without any specific judicial showing that there’s a probable cause for that infringement of our rights.
  • Since the revelations, we have seen a massive sea change in the technological basis and makeup of the Internet. One story revealed that the NSA was unlawfully collecting data from the data centers of Google and Yahoo. They were intercepting the transactions of data centers of American companies, which should not be allowed in the first place because American companies are considered US persons, sort of, under our surveillance authorities. They say, “Well, we were doing it overseas,” but that falls under a different Reagan-era authority: EO 12333, an executive order for foreign-intelligence collection, as opposed to the ones we now use domestically. So this one isn’t even authorized by law. It’s just an old-ass piece of paper with Reagan’s signature on it, which has been updated a couple times since then. So what happened was that all of a sudden these massive, behemoth companies realized their data centers—sending hundreds of millions of people’s communications back and forth every day—were completely unprotected, electronically naked. GCHQ, the British spy agency, was listening in, and the NSA was getting the data and everything like that, because they could dodge the encryption that was typically used. Basically, the way it worked technically, you go from your phone to Facebook.com, let’s say—that link is encrypted. So if the NSA is trying to watch it here, they can’t understand it. But what these agencies discovered was, the Facebook site that your phone is connected to is just the front end of a larger corporate network—that’s not actually where the data comes from. When you ask for your Facebook page, you hit this part and it’s protected, but it has to go on this long bounce around the world to actually get what you’re asking for and go back. So what they did was just get out of the protected part and they went onto the back network. They went into the private network of these companies.
  • The Nation: The companies knew this? Snowden: Companies did not know it. They said, “Well, we gave the NSA the front door; we gave you the PRISM program. You could get anything you wanted from our companies anyway—all you had to do was ask us and we’re gonna give it to you.” So the companies couldn’t have imagined that the intelligence communities would break in the back door, too—but they did, because they didn’t have to deal with the same legal process as when they went through the front door. When this was published by Barton Gellman in The Washington Post and the companies were exposed, Gellman printed a great anecdote: he showed two Google engineers a slide that showed how the NSA was doing this, and the engineers “exploded in profanity.” Another example—one document I revealed was the classified inspector general’s report on a Bush surveillance operation, Stellar Wind, which basically showed that the authorities knew it was unlawful at the time. There was no statutory basis; it was happening basically on the president’s say-so and a secret authorization that no one was allowed to see. When the DOJ said, “We’re not gonna reauthorize this because it is not lawful,” Cheney—or one of Cheney’s advisers—went to Michael Hayden, director of the NSA, and said, “There is no lawful basis for this program. DOJ is not going to reauthorize it, and we don’t know what we’re going to do. Will you continue it anyway on the president’s say-so?” Hayden said yes, even though he knew it was unlawful and the DOJ was against it. Nobody has read this document because it’s like twenty-eight pages long, even though it’s incredibly important.
  • The big tech companies understood that the government had not only damaged American principles, it had hurt their businesses. They thought, “No one trusts our products anymore.” So they decided to fix these security flaws to secure their phones. The new iPhone has encryption that protects the contents of the phone. This means if someone steals your phone—if a hacker or something images your phone—they can’t read what’s on the phone itself, they can’t look at your pictures, they can’t see the text messages you send, and so forth. But it does not stop law enforcement from tracking your movements via geolocation on the phone if they think you are involved in a kidnapping case, for example. It does not stop law enforcement from requesting copies of your texts from the providers via warrant. It does not stop them from accessing copies of your pictures or whatever that are uploaded to, for example, Apple’s cloud service, which are still legally accessible because those are not encrypted. It only protects what’s physically on the phone. This is purely a security feature that protects against the kind of abuse that can happen with all these things being out there undetected. In response, the attorney general and the FBI director jumped on a soap box and said, “You are putting our children at risk.”
  • The Nation: Is there a potential conflict between massive encryption and the lawful investigation of crimes? Snowden: This is the controversy that the attorney general and the FBI director were trying to create. They were suggesting, “We have to be able to have lawful access to these devices with a warrant, but that is technically not possible on a secure device. The only way that is possible is if you compromise the security of the device by leaving a back door.” We’ve known that these back doors are not secure. I talk to cryptographers, some of the leading technologists in the world, all the time about how we can deal with these issues. It is not possible to create a back door that is only accessible, for example, to the FBI. And even if it were, you run into the same problem with international commerce: if you create a device that is famous for compromised security and it has an American back door, nobody is gonna buy it. Anyway, it’s not true that the authorities cannot access the content of the phone even if there is no back door. When I was at the NSA, we did this every single day, even on Sundays. I believe that encryption is a civic responsibility, a civic duty.
  • The Nation: Some years ago, The Nation did a special issue on patriotism. We asked about a hundred people how they define it. How do you define patriotism? And related to that, you’re probably the world’s most famous whistleblower, though you don’t like that term. What characterization of your role do you prefer? Snowden: What defines patriotism, for me, is the idea that one rises to act on behalf of one’s country. As I said before, that’s distinct from acting to benefit the government—a distinction that’s increasingly lost today. You’re not patriotic just because you back whoever’s in power today or their policies. You’re patriotic when you work to improve the lives of the people of your country, your community and your family. Sometimes that means making hard choices, choices that go against your personal interest. People sometimes say I broke an oath of secrecy—one of the early charges leveled against me. But it’s a fundamental misunderstanding, because there is no oath of secrecy for people who work in the intelligence community. You are asked to sign a civil agreement, called a Standard Form 312, which basically says if you disclose classified information, they can sue you; they can do this, that and the other. And you risk going to jail. But you are also asked to take an oath, and that’s the oath of service. The oath of service is not to secrecy, but to the Constitution—to protect it against all enemies, foreign and domestic. That’s the oath that I kept, that James Clapper and former NSA director Keith Alexander did not. You raise your hand and you take the oath in your class when you are on board. All government officials are made to do it who work for the intelligence agencies—at least, that’s where I took the oath.
  • The Nation: Creating a new system may be your transition, but it’s also a political act. Snowden: In case you haven’t noticed, I have a somewhat sneaky way of effecting political change. I don’t want to directly confront great powers, which we cannot defeat on their terms. They have more money, more clout, more airtime. We cannot be effective without a mass movement, and the American people today are too comfortable to adapt to a mass movement. But as inequality grows, the basic bonds of social fraternity are fraying—as we discussed in regard to Occupy Wall Street. As tensions increase, people will become more willing to engage in protest. But that moment is not now.
  • The Nation: You really think that if you could go home tomorrow with complete immunity, there wouldn’t be irresistible pressure on you to become a spokesperson, even an activist, on behalf of our rights and liberties? Indeed, wouldn’t that now be your duty? Snowden: But the idea for me now—because I’m not a politician, and I do not think I am as effective in this way as people who actually prepare for it—is to focus on technical reform, because I speak the language of technology. I spoke with Tim Berners-Lee, the guy who invented the World Wide Web. We agree on the necessity for this generation to create what he calls the Magna Carta for the Internet. We want to say what “digital rights” should be. What values should we be protecting, and how do we assert them? What I can do—because I am a technologist, and because I actually understand how this stuff works under the hood—is to help create the new systems that reflect our values. Of course I want to see political reform in the United States. But we could pass the best surveillance reforms, the best privacy protections in the history of the world, in the United States, and it would have zero impact internationally. Zero impact in China and in every other country, because of their national laws—they won’t recognize our reforms; they’ll continue doing their own thing. But if someone creates a reformed technical system today—technical standards must be identical around the world for them to function together.
  • As for labeling someone a whistleblower, I think it does them—it does all of us—a disservice, because it “otherizes” us. Using the language of heroism, calling Daniel Ellsberg a hero, and calling the other people who made great sacrifices heroes—even though what they have done is heroic—is to distinguish them from the civic duty they performed, and excuses the rest of us from the same civic duty to speak out when we see something wrong, when we witness our government engaging in serious crimes, abusing power, engaging in massive historic violations of the Constitution of the United States. We have to speak out or we are party to that bad action.
  • The Nation: Considering your personal experience—the risks you took, and now your fate here in Moscow—do you think other young men or women will be inspired or discouraged from doing what you did? Snowden: Chelsea Manning got thirty-five years in prison, while I’m still free. I talk to people in the ACLU office in New York all the time. I’m able to participate in the debate and to campaign for reform. I’m just the first to come forward in the manner that I did and succeed. When governments go too far to punish people for actions that are dissent rather than a real threat to the nation, they risk delegitimizing not just their systems of justice, but the legitimacy of the government itself. Because when they bring political charges against people for acts that were clearly at least intended to work in the public interest, they deny them the opportunity to mount a public-interest defense. The charges they brought against me, for example, explicitly denied my ability to make a public-interest defense. There were no whistleblower protections that would’ve protected me—and that’s known to everybody in the intelligence community. There are no proper channels for making this information available when the system fails comprehensively.
  • The government would assert that individuals who are aware of serious wrongdoing in the intelligence community should bring their concerns to the people most responsible for that wrongdoing, and rely on those people to correct the problems that those people themselves authorized. Going all the way back to Daniel Ellsberg, it is clear that the government is not concerned with damage to national security, because in none of these cases was there damage. At the trial of Chelsea Manning, the government could point to no case of specific damage that had been caused by the massive revelation of classified information. The charges are a reaction to the government’s embarrassment more than genuine concern about these activities, or they would substantiate what harms were done. We’re now more than a year since my NSA revelations, and despite numerous hours of testimony before Congress, despite tons of off-the-record quotes from anonymous officials who have an ax to grind, not a single US official, not a single representative of the United States government, has ever pointed to a single case of individualized harm caused by these revelations. This, despite the fact that former NSA director Keith Alexander said this would cause grave and irrevocable harm to the nation. Some months after he made that statement, the new director of the NSA, Michael Rogers, said that, in fact, he doesn’t see the sky falling. It’s not so serious after all.
  • The Nation: You also remind us of [Manhattan Project physicist] Robert Oppenheimer—what he created and then worried about. Snowden: Someone recently talked about mass surveillance and the NSA revelations as being the atomic moment for computer scientists. The atomic bomb was the moral moment for physicists. Mass surveillance is the same moment for computer scientists, when they realize that the things they produce can be used to harm a tremendous number of people. It is interesting that so many people who become disenchanted, who protest against their own organizations, are people who contributed something to them and then saw how it was misused. When I was working in Japan, I created a system for ensuring that intelligence data was globally recoverable in the event of a disaster. I was not aware of the scope of mass surveillance. I came across some legal questions when I was creating it. My superiors pushed back and were like, “Well, how are we going to deal with this data?” And I was like, “I didn’t even know it existed.” Later, when I found out that we were collecting more information on American communications than we were on Russian communications, for example, I was like, “Holy shit.” Being confronted with the realization that work you intended to benefit people is being used against them has a radicalizing effect.
  • The Nation: We have a sense, or certainly the hope, we’ll be seeing you in America soon—perhaps sometime after this Ukrainian crisis ends. Snowden: I would love to think that, but we’ve gone all the way up the chain at all the levels, and things like that. A political decision has been made not to irritate the intelligence community. The spy agencies are really embarrassed, they’re really sore—the revelations really hurt their mystique. The last ten years, they were getting the Zero Dark Thirty treatment—they’re the heroes. The surveillance revelations bring them back to Big Brother kind of narratives, and they don’t like that at all. The Obama administration almost appears as though it is afraid of the intelligence community. They’re afraid of death by a thousand cuts—you know, leaks and things like that.
  • The Nation: You’ve given us a lot of time, and we are very grateful, as will be The Nation’s and other readers. But before we end, any more thoughts about your future? Snowden: If I had to guess what the future’s going to look like for me—assuming it’s not an orange jumpsuit in a hole—I think I’m going to alternate between tech and policy. I think we need that. I think that’s actually what’s missing from government, for the most part. We’ve got a lot of policy people, but we have no technologists, even though technology is such a big part of our lives. It’s just amazing, because even these big Silicon Valley companies, the masters of the universe or whatever, haven’t engaged with Washington until recently. They’re still playing catch-up. As for my personal politics, some people seem to think I’m some kind of archlibertarian, a hyper-conservative. But when it comes to social policies, I believe women have the right to make their own choices, and inequality is a really important issue. As a technologist, I see the trends, and I see that automation inevitably is going to mean fewer and fewer jobs. And if we do not find a way to provide a basic income for people who have no work, or no meaningful work, we’re going to have social unrest that could get people killed. When we have increasing production—year after year after year—some of that needs to be reinvested in society. It doesn’t need to be consistently concentrated in these venture-capital funds and things like that. I’m not a communist, a socialist or a radical. But these issues have to be 
addressed.
  • Paul Merrell on 30 Oct 14
     
    Remarkable interview. Snowden finally gets asked some questions about politics. 
Paul Merrell

Saudi King Abdullah dies, new ruler is Salman | Reuters - 0 views

www.reuters.com/...ccession-idUSKBN0KV2RQ20150122

war & peace Saudis Abdullah-death Salman

shared by Paul Merrell on 23 Jan 15 - No Cached
  • Saudi Arabia's King Abdullah died early on Friday and his brother Salman became king, the royal court in the world's top oil exporter and birthplace of Islam said in a statement carried by state television. King Salman has named his half-brother Muqrin as his crown prince and heir.
  • Abdullah, thought to have been born in 1923, had ruled Saudi Arabia as king since 2006, but had run the country as de facto regent for a decade before that after his predecessor King Fahd suffered a debilitating stroke. At stake with the appointment of Salman as king is the future direction of the United States' most important Arab ally and self-appointed champion of Sunni Islam at a moment of unprecedented turmoil across the Middle East.
  • Abdullah played a guiding role in Saudi Arabia's support for Egypt's government after the military intervened in 2012, and drove his country's support for Syria's rebellion against President Bashar al-Assad.King Salman, thought to be 79, has been crown prince and defense minister since 2012. He was governor of Riyadh province for five decades before that. By immediately appointing Muqrin as his heir, subject to the approval of a family Allegiance Council, Salman has moved to avert widespread speculation about the immediate path of the royal succession in the world's top oil exporter.
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  • King Salman has been part of the ruling clique of princes for decades and is thought likely to continue the main thrusts of Saudi strategic policy, including maintaining the alliance with the United States and working towards energy market stability. During his five decades as Riyadh governor he was reputedly adept at managing the delicate balance of clerical, tribal and princely interests that determine Saudi policy, while maintaining good relations with the West.In the long term Saudi rulers have to manage the needs of a rapidly growing population plagued by structural unemployment, and an economy that remains overly dependent on oil revenue and undermined by lavish subsidies.Saudi Arabia, which holds more than a fifth of the world's crude oil, also exerts some influence over the world's 1.6 billion Muslims through its guardianship of Mecca and Medina, Islam's holiest sites.
  • Most senior members of the ruling al-Saud family are thought to favor similar positions on foreign and energy policy, but incoming kings have traditionally chosen to appoint new ministers to head top ministries like oil and finance. In a country where the big ministries are dominated by royals, successive kings have kept the oil portfolio reserved for commoners and insisted on maintaining substantial spare output capacity to help reduce market volatility.
  • Paul Merrell on 23 Jan 15
Paul Merrell

Keeping Dark Money in the Shadows - WhoWhatWhy - 0 views

whowhatwhy.org/...ping-dark-money-in-the-shadows

Auction 2016 dark-money legislation

shared by Paul Merrell on 01 Jul 15 - No Cached
  • With the Supreme Court knocking down regulations with a wrecking ball, the FEC out of commission, and an election heating up that will likely redefine the term “big money,” there are few avenues left for regulation of American elections. And now, Congress is set to close one off.On June 17, the House Appropriations Committee passed 2016 Financial Services and General Government Appropriations bill including a collection of provisions that ensure that the so-called “dark money” of elections—money that passes through supposedly non-political social welfare nonprofits, such as the Koch Brothers’ Crossroads GPS or the League of Conservation Voters, and is therefore free from disclosure—remains very much dark.Section 129 of the bill prevents the IRS from taking any action to investigate whether these social welfare groups are acting exclusively for social welfare; Section 625 prevents the SEC from requiring disclosure of political donations for publicly traded companies; Section 735 prevents a rule requiring that government contractors disclose their contributions to political groups, nonprofits, and trade unions.
  • Rules like these are aimed at preventing what some campaign watchdog groups refer to as the dark money system. Though Federal Election Commission regulations require disclosure of all donations to political candidates, 501(c)(4) groups—groups determined by the IRS to be for social welfare, not political campaigning, and exempt from taxes and donor disclosure—can be used as a workaround. Corporations and individuals do not have to disclose their donations to these groups, meaning that these groups can make donations to political campaigns using money donated by others without those original donors revealing it.An executive order requiring disclosure rules of this sort had been one of the last hopes for election watchdogs looking for a way to keep campaign finance under control in the coming election. This action by the House Appropriations—part of a large government funding bill for which passage will likely not hinge on such small sections—has left them even more enraged at the state of current campaign finance regulations.
Paul Merrell

Activists send the Senate 6 million faxes to oppose cyber bill - CBS News - 0 views

www.cbsnews.com/...ion-faxes-to-oppose-cyber-bill

surveillance state CISA legislation faxes Obama

shared by Paul Merrell on 06 Aug 15 - No Cached
  • Activists worried about online privacy are sending Congress a message with some old-school technology: They're sending faxes -- more than 6.2 million, they claim -- to express opposition to the Cybersecurity Information Sharing Act (CISA).Why faxes? "Congress is stuck in 1984 and doesn't understand modern technology," according to the campaign Fax Big Brother. The week-long campaign was organized by the nonpartisan Electronic Frontier Foundation, the group Access and Fight for the Future, the activist group behind the major Internet protests that helped derail a pair of anti-piracy bills in 2012. It also has the backing of a dozen groups like the ACLU, the American Library Association, National Association of Criminal Defense Lawyers and others.
  • CISA aims to facilitate information sharing regarding cyberthreats between the government and the private sector. The bill gained more attention following the massive hack in which the records of nearly 22 million people were stolen from government computers."The ability to easily and quickly share cyber attack information, along with ways to counter attacks, is a key method to stop them from happening in the first place," Sen. Dianne Feinstein, D-California, who helped introduce CISA, said in a statement after the hack. Senate leadership had planned to vote on CISA this week before leaving for its August recess. However, the bill may be sidelined for the time being as the Republican-led Senate puts precedent on a legislative effort to defund Planned Parenthood.Even as the bill was put on the backburner, the grassroots campaign to stop it gained steam. Fight for the Future started sending faxes to all 100 Senate offices on Monday, but the campaign really took off after it garnered attention on the website Reddit and on social media. The faxed messages are generated by Internet users who visit faxbigbrother.com or stopcyberspying.com -- or who simply send a message via Twitter with the hashtag #faxbigbrother. To send all those faxes, Fight for the Future set up a dedicated server and a dozen phone lines and modems they say are capable of sending tens of thousands of faxes a day.
  • Fight for the Future told CBS News that it has so many faxes queued up at this point, that it may take months for Senate offices to receive them all, though the group is working on scaling up its capability to send them faster. They're also limited by the speed at which Senate offices can receive them.
  • Paul Merrell on 06 Aug 15
     
    From an Fight For the Future mailing: "Here's the deal: yesterday the Senate delayed its expected vote on CISA, the Cybersecurity Information Sharing Act that would let companies share your private information--like emails and medical records--with the government. "The delay is good news; but it's a delay, not a victory. "We just bought some precious extra time to fight CISA, but we need to use it to go big like we did with SOPA or this bill will still pass. Even if we stop it in September, they'll try again after that. "The truth is that right now, things are looking pretty grim. Democrats and Republicans have been holding closed-door meetings to work out a deal to pass CISA quickly when they return from recess. "Right before the expected Senate vote on CISA, the Obama Administration endorsed the bill, which means if Congress passes it, the White House will definitely sign it.  "We've stalled and delayed CISA and bills like it nearly half a dozen times, but this month could be our last chance to stop it for good." See also http://tumblr.fightforthefuture.org/post/125953876003/senate-fails-to-advance-cisa-before-recess-amid (;) http://www.cbsnews.com/news/activists-send-the-senate-6-million-faxes-to-oppose-cyber-bill/ (;) http://www.npr.org/2015/08/04/429386027/privacy-advocates-to-senate-cyber-security-bill (.)
Paul Merrell

Bail-In and the Financial Stability Board: The Global Bankers' Coup | nsnbc international - 0 views

nsnbc.me/...lity-board-global-bankers-coup

banksters G20 Financial-Stability-Board must-read

shared by Paul Merrell on 13 Dec 14 - No Cached
  • Ellen H. Brown (WoD) : On December 11, 2014, the US House passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses. The bill was vigorously challenged by Senator Elizabeth Warren; but the tide turned when Jamie Dimon, CEO of JPMorganChase, stepped into the ring. Perhaps what prompted his intervention was the unanticipated $40 drop in the price of oil. As financial blogger Michael Snyder points out, that drop could trigger a derivatives payout that could bankrupt the biggest banks. And if the G20’s new “bail-in” rules are formalized, depositors and pensioners could be on the hook. The new bail-in rules were discussed in my last last article entitled “New G20 Rules: Cyprus-style Bail-ins to Hit Depositors AND Pensioners.” They are edicts of the Financial Stability Board (FSB), an unelected body of central bankers and finance ministers headquartered in the Bank for International Settlements in Basel, Switzerland. Where did the FSB get these sweeping powers, and is its mandate legally enforceable?
  • Those questions were addressed in an article I wrote in June 2009, two months after the FSB was formed, titled “Big Brother in Basel: BIS Financial Stability Board Undermines National Sovereignty.” It linked the strange boot shape of the BIS to a line from Orwell’s 1984: “a boot stamping on a human face—forever.” The concerns raised there seem to be materializing, so I’m republishing the bulk of that article here. We need to be paying attention, lest the bail-in juggernaut steamroll over us unchallenged. The Shadowy Financial Stability Board Alarm bells went off in April 2009, when the Bank for International Settlements (BIS) was linked to the new Financial Stability Board (FSB) signed onto by the G20 leaders in London. The FSB was an expansion of the older Financial Stability Forum (FSF) set up in 1999 to serve in a merely advisory capacity by the G7 (a group of finance ministers formed from the seven major industrialized nations). The chair of the FSF was the General Manager of the BIS. The new FSB was expanded to include all G20 members (19 nations plus the EU).
  • Formally called the “Group of Twenty Finance Ministers and Central Bank Governors,” the G20 was, like the G7, originally set up as a forum merely for cooperation and consultation on matters pertaining to the international financial system. What set off alarms was that the new Financial Stability Board had real teeth, imposing “obligations” and “commitments” on its members; and this feat was pulled off without legislative formalities, skirting the usual exacting requirements for treaties. It was all done in hasty response to an “emergency.” Problem-reaction-solution was the slippery slope of coups. Buried on page 83 of an 89-page Report on Financial Regulatory Reform issued by the US Obama administration was a recommendation that the FSB strengthen and institutionalize its mandate to promote global financial stability. It sounded like a worthy goal, but there was a disturbing lack of detail. What was the FSB’s mandate, what were its expanded powers, and who was in charge? An article in The London Guardian addressed those issues in question and answer format:
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  • For three centuries, private international banking interests have brought governments in line by blocking them from issuing their own currencies and requiring them to borrow banker-issued “banknotes” instead. Political colonialism is now a thing of the past, but under the new FSB guidelines, nations could still be held in feudalistic subservience to foreign masters. Consider this scenario: the new FSB rules precipitate a massive global depression due to contraction of the money supply. XYZ country wakes up to the fact that all of this is unnecessary – that it could be creating its own money, freeing itself from the debt trap, rather than borrowing from bankers who create money on computer screens and charge interest for the privilege of borrowing it. But this realization comes too late: the boot descends and XYZ is crushed into line. National sovereignty has been abdicated to a private committee, with no say by the voters. Marilyn Barnewall, dubbed by Forbes Magazine the “dean of American private banking,” wrote in an April 2009 article titled “What Happened to American Sovereignty at G-20?”: It seems the world’s bankers have executed a bloodless coup and now represent all of the people in the world. . . . President Obama agreed at the G20 meeting in London to create an international board with authority to intervene in U.S. corporations by dictating executive compensation and approving or disapproving business management decisions.  Under the new Financial Stability Board, the United States has only one vote. In other words, the group will be largely controlled by European central bankers. My guess is, they will represent themselves, not you and not me and certainly not America.
  • Are these commitments legally binding? Adoption of the FSB was never voted on by the public, either individually or through their legislators. The G20 Summit has been called “a New Bretton Woods,” referring to agreements entered into in 1944 establishing new rules for international trade. But Bretton Woods was put in place by Congressional Executive Agreement, requiring a majority vote of the legislature; and it more properly should have been done by treaty, requiring a two-thirds vote of the Senate, since it was an international agreement binding on the nation. “Bail-in” is not the law yet, but the G20 governments will be called upon to adopt the FSB’s resolution measures when the proposal is finalized after taking comments in 2015. The authority of the G20 has been challenged, but mainly over whether important countries were left out of the mix. The omitted countries may prove to be the lucky ones, having avoided the FSB’s net.
Paul Merrell

It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors - 0 views

www.informationclearinghouse.info/article34442.htm

banksters confiscation financial-collapse FDIC

shared by Paul Merrell on 29 Mar 13 - No Cached
  • Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.  
  • Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.
  • The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.”  It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state: An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.
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  • No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks.
  • If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008.  That this dire scenario could actually materialize was underscored by Yves Smith in a March 19th post titled When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives.  She writes: In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositaries to fund derivatives exposures. And as bad as that is, the depositors, unlike their Cypriot confreres, aren’t even senior creditors. Remember Lehman? When the investment bank failed, unsecured creditors (and remember, depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.
  • One might wonder why the posting of collateral by a derivative counterparty, at some percentage of full exposure, makes the creditor “secured,” while the depositor who puts up 100 cents on the dollar is “unsecured.” But moving on – Smith writes: Lehman had only two itty bitty banking subsidiaries, and to my knowledge, was not gathering retail deposits. But as readers may recall, Bank of America moved most of its derivatives from its Merrill Lynch operation [to] its depositary in late 2011. Its “depositary” is the arm of the bank that takes deposits; and at B of A, that means lots and lots of deposits. The deposits are now subject to being wiped out by a major derivatives loss. How bad could that be? Smith quotes Bloomberg:
  • . . . Bank of America’s holding company . . . held almost $75 trillion of derivatives at the end of June . . . . That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show. $75 trillion and $79 trillion in derivatives! These two mega-banks alone hold more in notional derivatives each than the entire global GDP (at $70 trillion).
  • Are you safe, then, if your money is in gold and silver? Apparently not – if it’s stored in a safety deposit box in the bank.  Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it’s a matter of “national security,” which a major bank crisis no doubt will be.
  • Another alternative was considered but rejected by President Obama in 2009: nationalize mega-banks that fail. In a February 2009 article titled “Are Uninsured Bank Depositors in Danger?“, Felix Salmon discussed a newsletter by Asia-based investment strategist Christopher Wood, in which Wood wrote: It is . . . amazing that Obama does not understand the political appeal of the nationalization option. . . . [D]espite this latest setback nationalization of the banks is coming sooner or later because the realities of the situation will demand it. The result will be shareholders wiped out and bondholders forced to take debt-for-equity swaps, if not hopefully depositors.
  • President Obama acknowledged that bank nationalization had worked in Sweden, and that the course pursued by the US Fed had not worked in Japan, which wound up instead in a “lost decade.”  But Obama opted for the Japanese approach because, according to Ed Harrison, “Americans will not tolerate nationalization.” But that was four years ago. When Americans realize that the alternative is to have their ready cash transformed into “bank stock” of questionable marketability, moving failed mega-banks into the public sector may start to have more appeal.
Paul Merrell

It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors | WEB OF DEBT BLOG - 0 views

webofdebt.wordpress.com/...anned-for-us-and-uk-depositors

financial-collapse Cyprus banksters U.S. confiscation

shared by Paul Merrell on 12 Apr 13 - No Cached
  • Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.  
  • Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.
  • No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks.  The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .”
  • ...7 more annotations...
  • The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.”  It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state: An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.
  • If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008.  That this dire scenario could actually materialize was underscored by Yves Smith in a March 19th post titled When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives.  She writes: In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositaries to fund derivatives exposures. And as bad as that is, the depositors, unlike their Cypriot confreres, aren’t even senior creditors. Remember Lehman? When the investment bank failed, unsecured creditors (and remember, depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.
  • Smith writes: Lehman had only two itty bitty banking subsidiaries, and to my knowledge, was not gathering retail deposits. But as readers may recall, Bank of America moved most of its derivatives from its Merrill Lynch operation [to] its depositary in late 2011. Its “depositary” is the arm of the bank that takes deposits; and at B of A, that means lots and lots of deposits. The deposits are now subject to being wiped out by a major derivatives loss. How bad could that be? Smith quotes Bloomberg: . . . Bank of America’s holding company . . . held almost $75 trillion of derivatives at the end of June . . . . That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.
  • $75 trillion and $79 trillion in derivatives! These two mega-banks alone hold more in notional derivatives each than the entire global GDP (at $70 trillion).
  • Smith goes on: . . . Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. . . . Lehman failed over a weekend after JP Morgan grabbed collateral. But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. Perhaps, but Congress has already been burned and is liable to balk a second time. Section 716 of the Dodd-Frank Act specifically prohibits public support for speculative derivatives activities.
  • An FDIC confiscation of deposits to recapitalize the banks is far different from a simple tax on taxpayers to pay government expenses. The government’s debt is at least arguably the people’s debt, since the government is there to provide services for the people. But when the banks get into trouble with their derivative schemes, they are not serving depositors, who are not getting a cut of the profits. Taking depositor funds is simply theft. What should be done is to raise FDIC insurance premiums and make the banks pay to keep their depositors whole, but premiums are already high; and the FDIC, like other government regulatory agencies, is subject to regulatory capture.  Deposit insurance has failed, and so has the private banking system that has depended on it for the trust that makes banking work.
  • The Cyprus haircut on depositors was called a “wealth tax” and was written off by commentators as “deserved,” because much of the money in Cypriot accounts belongs to foreign oligarchs, tax dodgers and money launderers. But if that template is applied in the US, it will be a tax on the poor and middle class. Wealthy Americans don’t keep most of their money in bank accounts.  They keep it in the stock market, in real estate, in over-the-counter derivatives, in gold and silver, and so forth. Are you safe, then, if your money is in gold and silver? Apparently not – if it’s stored in a safety deposit box in the bank.  Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it’s a matter of “national security,” which a major bank crisis no doubt will be.
  • Paul Merrell on 12 Apr 13
     
    Time to get your money out of the bank and into gold or silver, kept somewhere other than in a bank safety deposit box. 
Paul Merrell

The NSA Is Building the Country's Biggest Spy Center (Watch What You Say) | Threat Level | Wired.com - 0 views

www.wired.com/...1

Big Brother NSA Stellar Wind cryptography supercomputers surveillance

shared by Paul Merrell on 23 May 12 - No Cached
    • Paul Merrell
      Paul Merrell on 23 May 12
       
      There goes the neighborhood; the Feds are moving in. 
  • In the process—and for the first time since Watergate and the other scandals of the Nixon administration—the NSA has turned its surveillance apparatus on the US and its citizens. It has established listening posts throughout the nation to collect and sift through billions of email messages and phone calls, whether they originate within the country or overseas. It has created a supercomputer of almost unimaginable speed to look for patterns and unscramble codes. Finally, the agency has begun building a place to store all the trillions of words and thoughts and whispers captured in its electronic net. And, of course, it’s all being done in secret.
  • According to another top official also involved with the program, the NSA made an enormous breakthrough several years ago in its ability to cryptanalyze, or break, unfathomably complex encryption systems employed by not only governments around the world but also many average computer users in the US. The upshot, according to this official: “Everybody’s a target; everybody with communication is a target.
  • ...8 more annotations...
  • as a 2007 Department of Defense report puts it, the Pentagon is attempting to expand its worldwide communications network, known as the Global Information Grid, to handle yottabytes (1024 bytes) of data. (A yottabyte is a septillion bytes—so large that no one has yet coined a term for the next higher magnitude.) It needs that capacity because, according to a recent report by Cisco, global Internet traffic will quadruple from 2010 to 2015, reaching 966 exabytes per year. (A million exabytes equal a yottabyte.
  • The data stored in Bluffdale will naturally go far beyond the world’s billions of public web pages. The NSA is more interested in the so-called invisible web, also known as the deep web or deepnet—data beyond the reach of the public. This includes password-protected data, US and foreign government communications, and noncommercial file-sharing between trusted peers.
  • The broad outlines of the so-called warrantless-wiretapping program have long been exposed—how the NSA secretly and illegally bypassed the Foreign Intelligence Surveillance Court, which was supposed to oversee and authorize highly targeted domestic eavesdropping; how the program allowed wholesale monitoring of millions of American phone calls and email. In the wake of the program’s exposure, Congress passed the FISA Amendments Act of 2008, which largely made the practices legal. Telecoms that had agreed to participate in the illegal activity were granted immunity from prosecution and lawsuits. What wasn’t revealed until now, however, was the enormity of this ongoing domestic spying program. For the first time, a former NSA official has gone on the record to describe the program, codenamed Stellar Wind, in detail.
  • one of the deepest secrets of the Stellar Wind program—again, never confirmed until now—was that the NSA gained warrantless access to AT&T’s vast trove of domestic and international billing records, detailed information about who called whom in the US and around the world. As of 2007, AT&T had more than 2.8 trillion records housed in a database at its Florham Park, New Jersey, complex. Verizon was also part of the program
  • the NSA succeeded in building an even faster supercomputer. “They made a big breakthrough,” says another former senior intelligence official, who helped oversee the program. The NSA’s machine was likely similar to the unclassified Jaguar, but it was much faster out of the gate, modified specifically for cryptanalysis and targeted against one or more specific algorithms, like the AES.
  • The breakthrough was enormous, says the former official, and soon afterward the agency pulled the shade down tight on the project, even within the intelligence community and Congress. “Only the chairman and vice chairman and the two staff directors of each intelligence committee were told about it,” he says. The reason? “They were thinking that this computing breakthrough was going to give them the ability to crack current public encryption.”
  • But the real competition will take place in the classified realm. To secretly develop the new exaflop (or higher) machine by 2018, the NSA has proposed constructing two connecting buildings, totaling 260,000 square feet, near its current facility on the East Campus of Oak Ridge. Called the Multiprogram Computational Data Center,
  • n the meantime Cray is working on the next step for the NSA, funded in part by a $250 million contract with the Defense Advanced Research Projects Agency. It’s a massively parallel supercomputer called Cascade, a prototype of which is due at the end of 2012. Its development will run largely in parallel with the unclassified effort for the DOE and other partner agencies. That project, due in 2013, will upgrade the Jaguar XT5 into an XK6, codenamed Titan, upping its speed to 10 to 20 petaflops.
Paul Merrell

George Bush was "angry" when US intelligence said Iran hadn't got an active nuclear weapons programme - 0 views

www.david-morrison.org.uk/...iran-bush-on-nie.htm

war & peace Bush-II Iranian-nukes-myth

shared by Paul Merrell on 23 May 14 - No Cached
  • In the National Intelligence Estimate, Iran: Nuclear Intentions and Capabilities, produced in November 2007, the 16 US intelligence services expressed the consensus view that Iran hadn’t got an active nuclear weapons programme at that time.  That is still their view today.   As he revealed in his memoir Decision Points, instead of being pleased that Iran was almost certainly not developing nuclear weapons, President Bush was “angry” that his intelligence services had expressed this view.  He was “angry” because it cut the ground from under his efforts to gain international support for what he termed “dealing with Iran”, which clearly went beyond ensuring that it did not possess nuclear weapons.  The NIE had a big impact, he concluded – and not a good one.   His full comments on the NIE in Decision Points are as follows:
  • In November 2007, the intelligence community produced a National Intelligence Estimate on Iran’s nuclear program. It confirmed that, as we suspected, Iran had operated a secret nuclear weapons program in defiance of its treaty obligations. It also reported that, in 2003, Iran had suspended its covert effort to design a warhead – considered by some to be the least challenging part of building a weapon.  Despite the fact that Iran was testing missiles that could be used as a delivery system and had announced its resumption of uranium enrichment, the NIE opened with an eye-popping declaration: “We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program.”   The NIE’s conclusion was so stunning that I felt certain it would immediately leak to the press. As much as I disliked the idea, I decided to declassify the key findings so that we could shape the news stories with the facts. The backlash was immediate. Ahmadinejad hailed the NIE as “a great victory.”  Momentum for new sanctions faded among the Europeans, Russians, and Chinese. As New York Times journalist David Sanger rightly put it, “The new intelligence estimate relieved the international pressure on Iran – the same pressure that the document itself claimed had successfully forced the country to suspend its weapons ambitions.”   In January 2008, I took a trip to the Middle East, where I tried to reassure leaders that we remained committed to dealing with Iran. Israel and our Arab allies found themselves in a rare moment of unity. Both were deeply concerned about Iran and furious with the United States about the NIE. In Saudi Arabia, I met with King Abdullah and members of the Sudairi Seven, the influential full brothers of the late King Fahd.   “Your Majesty, may I begin the meeting?” I said. “I’m confident that every one of you believes that I wrote the NIE as a way of avoiding taking action against Iran.”
  • No one said a word. The Saudis were too polite to confirm their suspicion aloud.   “You have to understand our system,” I said. “The NIE was produced independently by our intelligence community. I am as angry about it as you are.”   The NIE didn’t just undermine diplomacy.  It also tied my hands on the military side. There were many reasons I was concerned about undertaking a military strike on Iran, including its uncertain effectiveness and the serious problems it would create for Iraq’s fragile young democracy. But after the NIE, how could I possibly explain using the military to destroy the nuclear facilities of a country the intelligence community said had no active nuclear weapons program?   I don’t know why the NIE was written the way it was. I wondered if the intelligence community was trying so hard to avoid repeating its mistake on Iraq, that it had underestimated the threat from Iran.  I certainly hoped that intelligence analysts weren’t trying to influence policy. Whatever the explanation, the NIE had a big impact – and not a good one.
Paul Merrell

"Russian Invasion" - Screaming 'Wolf!' Strategy of Deception. Lies Repeated Umpteen Times. What is the Endgame? | Global Research - 0 views

www.globalresearch.ca/...5398403

war & peace U.S.-foreign-policy Ukraine propaganda lies

shared by Paul Merrell on 01 Sep 14 - No Cached
  • “The separatists are backed, trained, armed, financed by Russia. Russia determined that it had to be a little more overt in what it had already been doing, but it’s not really a shift.”Obama, 29 August 2014.  ”If you repeat a lie often enough, it becomes the truth.”  -  Joseph Goebbels (Hitler’s Propaganda Minister) Interestingly, most of us who are seeking the truth are primarily attempting to undo the lies – lies umpteen times repeated, lies about “Russian invasions”, first proclaimed by Poroshenko, Ukraine’s oligarch leader (sic), lies of Russia “not respecting Ukraine’s sovereignty”, demonization directed against President Putin, Malaysian airliners downed by Russia – and-so-on. The latest accusation is that JP Morgan and four other Wall Street banks have been hacked. And the culprit is…. Of, course Russia, according to the presstitute MSM.
  • It doesn’t matter whether what Poroshenko said and is repeated the world over was based on a translation error (according to the German Tagesschau, the German mainstream TV news) – or whether it is just a conventional lie continuously repeated until it becomes the truth à la Goebbels – the western bought propaganda machine takes full advantage of this hundreds of years old simple strategy of deception. The interesting part, however, is that hardly anyone on that very occasion is presenting the counter-weight, so to speak, namely to what extent Kiev is assisted by US paid mercenaries, CIA military and strategic advisers and their equipment, all paid for in one way or another by the State Department, CIA, or NATO. And these are facts. Not inventions for deception.
  • There is enough proof about who caused the 22 February 2014 coup (Maidan) – Madame Nuland, Kerry’s assistant, bragged about it at the Washington Press club – remember the US$ 5 billion “investment” in Ukraine’s regime change that cannot be let go down the drain because of the f….ing Europeans. She was caught hot-handed or hot-voiced on the phone with the US Ambassador in Kiev.  Ever since that infamous coup, the US / NATO and the EU have had their dirty hands in Kiev’s Nazi killer junta – otherwise the Kiev thugs would have never had either the courage or the military knowledge to advance to the Donbas area of Ukraine, where they were literally ordered to kill their brothers. Some of them with some conscience defected early on; then they were accompanied under threats of life by CIA ‘advisers’. Eventually they defected by the thousands because of lack of food and ammunition and the resulting low-low morale.
  • Paul Merrell on 01 Sep 14
     
    This article is mostly in line with what my ongoing monitoring of the actual situation in Ukraine and associated U.S. propaganda. Exception: there are signs during the last 24 hours that Germany's Angela Merkel is doing a big departure from the stance that the U.S. State Department wants her to take. That was predictable because Merkel has been lobbied strongly by German business, which emphatically does not want to participate in U.S. economic sanctions against Russia. Germany is already feeling a lot of economic pain from enforcing those sanctions. So Merkel is saying that peace in the Ukraine that does not harm Russia is necessary and that E.U. membership for Ukraine is unnecessary. I'm still watching for a U.S. response.
Paul Merrell

The Progressive Movement is a PR Front for Rich Democrats » Counterpunch: Tells the Facts, Names the Names - 0 views

www.counterpunch.org/...-a-pr-front-for-rich-democrats

propaganda progressives bankster defenses

shared by Paul Merrell on 20 Mar 13 - No Cached
  • There is good news in the Boston Globe today for the managers, development directors, visionaries, political hacks and propaganda flacks who run “the Progressive Movement.”   More easy-to-earn and easy-to-hide soft money, millions of dollars,  will be flowing to them from super rich Democrats and business corporations.  It will come clean, pressed and laundered through Organizing for Action, the latest incarnation of the Obama Money Machine which has recently morphed into a “nonpartisan non-profit corporation” that will  ‘‘strengthen the progressive movement and train our next generation of leaders.’’
  • Does this information concern you?  If not, you need to get out of the propaganda bubble of your Progressive Movement echo chamber and think.  Think hard.  Think about fundamental, radical, democratic, social and economic change, who might bring it about and how.  Ask yourself if the the rich elite, the 1%, are going to fund that.   Leave The Nation and Mother Jones on the shelf;  turn off Ed Schultz, Rachel Madow and Chris Hayes;  don’t open that barrage of email missives from Alternet, Media Matters, MoveOn, and the other think tanks;  and get your head out of the liberal blogosphere for a couple days.  Clear your mind and consider this:
  • The self-labeled Progressive Movement that has arisen over the past decade is primarily one big propaganda campaign serving the political interests of the the Democratic Party’s richest one-percent who created it.  The funders and owners of the Progressive Movement get richer and richer off Wall Street and the corporate system.  But they happen to be Democrats, cultural and social liberals who can’t stomach Republican policies, and so after bruising electoral defeats a decade ago they decided to buy a movement, one just like the Republicans, a copy. The Progressive Movement that exists today is their success story.  The Democratic elite created  a mirror image of the type of astroturf front groups and think tanks long ago invented, funded and promoted by the Reaganites and the Koch brothers.  The liberal elite own the Progressive Movement. 
  • ...1 more annotation...
  • Real movements are not the creation of and beholden to millionaires.  The Progressive Movement is astroturf beholden to the rich elite, just as the Democratic millionaires and operatives of the Democracy Alliance intended.  The “movement’s” funding is in the hands of a small number of super rich Democrats and union bureaucrats and advisors who run with them.  Its talking points, strategies, tactics and PR campaigns are all at the service of the Democratic elite.  There is no grassroots organized progressive movement with power in the United States, and none is being built.  Indeed,  if anything threatens to emerge,  the cry  “Remember Nader!” arises and the budding insurgency is marginalized or coopted, as in the case of the Occupy Wall Street events.  Meanwhile, the rich elite who fund the Progressive Movement, and their candidates such as Barack Obama, are completely wedded to maintaining the existing status quo on Wall Street and in the corporate boardroom.  Their well-kept Progressive Movement is adept at PR, propaganda, marketing and fundraising necessary in the service of the Democratic Party and the corporate elite who rule it.
  • Paul Merrell on 20 Mar 13
     
    Why the anti-war and 99-percenter "progressives" never get around to ending wars and reforming Wall Street. Spot on. An excellent snapshot of where the real political power in the U.S. is. And for Gary, George Soros gets mentioned more than once.
Paul Merrell

Meet the Israeli-linked firm that sold Big Brother machines to Mubarak, Qaddafi - and Washington | Mondoweiss - 0 views

mondoweiss.net/...chines-qaddafi-washington.html

surveillance state NSA Israel Narus Verint Obama

shared by Paul Merrell on 16 Jun 13 - No Cached
  • In 2006, an AT&T technician named Mark Klein discovered a secret room inside the company’s windowless “Folsom Street Facility” in downtown San Francisco that was bristling with Narus machines. The now notorious Room 641A was controlled by the NSA, which was using it to collect AT&T customer data for data mining and real-time analysis. Thanks to the powerful NarusInsight system, the NSA was able to monitor 108 billion emails from AT&T customers per day.
  • Following a lawsuit filed against AT&T by the Electronic Freedom Foundation, Congress passed the FISA Amendments Act in July 2008, giving retroactive immunity to telecom corporations that assisted the NSA, and relieving them of any consequences for spying on Americans. Cass Sunstein, an informal advisor to Barack Obama’s 2008 presidential campaign who now heads the Office of Information and Regulatory Affairs, and who has urged federal law enforcement to “cognitively infiltrate” anti-government groups, was an outspoken supporter of the retroactive immunity bill. With Sunstein by his side, Obama reversed his initial objections to the NSA’s domestic spying operations, voting as a Senator for retroactive immunity. The vote allowed the NSA to expand its domestic spying operations, clearing the legal hurdles obstructing the creation of PRISM. The stage was set for the second term scandal that would leave Obama reeling.
  • Binney told me that throughout the United States there are currently as many as 20 NSA black sites like Room 641A. Narus devices, he said, have been placed at fiber-optic convergence points, allowing the NSA to retrieve about 80 percent of data carried through telecom and online service providers. Binney emphasized that the devices do not only retrieve so-called metadata, which only offers general records of data, but that they gather the actual content of emails and calls. (“We can reconstruct all of their e-mails along with attachments, see what web pages they clicked on; we can reconstruct their (Voice Over Internet) calls,” said Steve Bannerman, the marketing director of Narus). Thanks to PRISM, the NSA bas been able to “fill in the gaps,” Binney explained, gathering bulk data from communications the NSA might have missed with the NarusInsight system, especially those made between Americans and foreign countries.
  • ...2 more annotations...
  • Another Israeli-linked tech company, Verint, is a subsidiary of the Israeli firm Comverse, which boasts a reputation as “the world’s leading provider… of communications intercept and analysis” technology. Among the many Comverse executives plucked from the ranks of Israeli army intelligence is the company’s founder, Jacob “Kobi” Alexander, an ex-Israeli intelligence agent who cashed in through Israel’s high-tech surveillance industry. Alexander’s lucrative career collapsed in dramatic fashion when he was arrested for fraud in Namibia in 2006 after an international manhunt, and wound up handing over bank accounts worth $46 million to US authorities.
  • Just as AT&T relied on Narus systems, Verint’s DPI devices have been used to fulfill NSA requests for data from Verizon’s subscribers. And as Bamford explained in his 2008 book on the NSA, “Shadow Factory,” much of the data Verint and other private Israeli contractors gather from can be remotely accessed from Israel. “The greatest potential beneficiaries of this marriage between the Israeli eavesdroppers and America’s increasingly centralized telecom grid are Israel’s intelligence agencies,” Bamford wrote.
Paul Merrell

Asia Times Online :: See you on the dark side - 0 views

www.atimes.com/...WOR-02-130613.html

surveillance state NSA Snowden China

shared by Paul Merrell on 14 Jun 13 - No Cached
  • But then there's the mantra PRISM has been essential to foil major terrorist plots; that has been thoroughly debunked. [4] What is never acknowledged is that PRISM is TIA in action. Anyone - with the right clearance - may use TIA to amass serious inside financial information and make staggering profits. So yes, follow the money.
  • Snowden is surfing the PR tsunami as a master - and controlling it all the way. Yes, you do learn a thing or two at the CIA. The timing of the disclosure was a beauty; it handed Beijing the ultimate gift just as President Obama was corralling President Xi Jinping in the California summit about cyber war. As David Lindorff nailed it, [5] now Beijing simply cannot let Snowden hang dry. It's culture; it's a matter of not losing face. And then Snowden even doubled down - revealing the obvious; as much as Beijing, if not more, Washington hacks as hell. [6] Following the money, the security privatization racket and Snowden's moves - all at the same time - allows for a wealth of savory scenarios ... starting with selected players embedded in the NSA-centric Matrix node making a financial killing with inside information. Snowden did not expose anything that was not already known - or at least suspected - since 2002. So it's business as usual for those running the game. The only difference is the (Digital Blackwater) Big Brother is Watching You ethos is now in the open. TIA, a bunch of wealthy investors and a sound business plan - privatized Full Spectrum Dominance - all remain in play. From now on, it's just a matter of carefully, gradually guiding US public opinion to fully "normalize" TIA. After all, we're making all these sacrifices to protect you.
Paul Merrell

short films : Naked Citizens - 0 views

www.journey.webbler.co.uk/?lid=65226&bid=2

security state privacy

shared by Paul Merrell on 09 May 13 - No Cached
  • Increasing numbers of 'terror suspects' are being arrested on the basis of online and CCTV surveillance data. Authorities claim they act in the public interest, but does this intense surveillance keep us safer?"I woke up to pounding on my door", says Andrej Holm, a sociologist from the Humboldt University. In what felt like a scene from a movie, he was taken from his Berlin home by armed men after a systematic monitoring of his academic research deemed him the probable leader of a militant group. After 30 days in solitary confinement, he was released without charges. Across Western Europe and the USA, surveillance of civilians has become a major business. With one camera for every 14 people in London and drones being used by police to track individuals, the threat of living in a Big Brother state is becoming a reality. At an annual conference of hackers, keynote speaker Jacob Appelbaum asserts, "to be free of suspicion is the most important right to be truly free". But with most people having a limited understanding of this world of cyber surveillance and how to protect ourselves, are our basic freedoms already being lost?
  • Paul Merrell on 09 May 13
     
    Outstanding short (32 min.) documentary about the surveillance state. 
Paul Merrell

On Indefinite Detention: The Tyranny Continues      : Information Clearing House - 0 views

www.informationclearinghouse.info/article31395.htm

Big Brother tyranny indefinite detentions

shared by Paul Merrell on 23 May 12 - No Cached
  • By Rep. Ron Paul The bad news from last week's passage of the 2013 National Defense Authorization Act is that Americans can still be arrested on US soil and detained indefinitely without trial. Some of my colleagues would like us to believe that they fixed last year's infamous Sections 1021 and 1022 of the NDAA, which codified into law the unconstitutional notion that some Americans are not subject to the protections of the Constitution. However, nothing in this year's bill or amendments to the bill restored those constitutional rights. Supporters of the one amendment that passed on this matter were hoping no one would notice that it did absolutely nothing. The amendment essentially stated that those entitled to habeas corpus protections are hereby granted habeas corpus protections. Thanks for nothing!
Paul Merrell

USAF Drones May Conduct "Incidental" Domestic Surveillance | Secrecy News - 0 views

www.fas.org/...usaf_drones.html

domestic drones Big Brother liberties surveillance

shared by Paul Merrell on 18 May 12 - No Cached
  • “Collecting information on specific targets inside the US raises policy and legal concerns that require careful consideration, analysis and coordination with legal counsel.  Therefore, Air Force components should use domestic imagery only when there is a justifiable need to do so, and then only IAW [in accordance with] EO 12333, the National Security Act of 1947, as amended, DoD 5240.1-R, and this instruction,” it said.
  • In its new mark of the FY2013 defense authorization bill, the House Armed Services Committee is proposing to provide the Air Force with even more money than it requested for its Predator and Reaper drone programs.  See “Congress Funds Killer Drones the Air Force Says It Can’t Handle” by Spencer Ackerman, Wired Danger Room, May 7, 2012.
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