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Yahoo reports that it is on the verge of releasing 1,500 pages of documents related to a long court battle over its participation in the PRISM program, a National Security Agency program revealed last summer as part of the Snowden leaks. A leaked top-secret slide about PRISM shows that Yahoo was one of the first participants, having begun contributing to the database in March of 2008. It did so under severe duress. Company executives believed the government's demand for data was "unconstitutional and overbroad" and fought it in court.

"Our challenge, and a later appeal in the case, did not succeed," explained Yahoo General Counsel Ron Bell in a blog post published today. "The Foreign Intelligence Surveillance Court (FISC)... ordered us to give the U.S. Government the user data it sought in the matter." After it lost, Yahoo was threatened with $250,000 per day fines if it didn't comply with the program. Not only that, but the government got permission to share the ruling with other companies in order to put pressure on them as well, according to a just-published story by The Washington Post.

Over two decades ago, George Soros took on the Bank of England, and won. Just before lunch local time, the Swiss National Bank took on virtually every single macro hedge fund, the vast majority of which were short the Swiss Franc and crushed them, when it announced, first, that it would go further into NIRP, pushing its interest rate on deposit balances even more negative from -0.25% to -0.75%, a move which in itself would have been unprecedented and, second, announcing that the 1.20 EURCHF floor it had instituted in September 2011, the day gold hit its all time nominal high, was no more. What happened next was truly shock and awe as algo after algo saw their EURCHF 1.1999 stops hit, and moments thereafter the EURCHF pair crashed to less then 0.75, margining out virtually every single long EURCHF position, before finally rebounding to a level just above 1.00, which is where it was trading just before the SNB instituted the currency floor over three years ago.

The SNB press release:

The resultant move across all currency pairs has seen the EUR and USD sliding, the USDJPY crashing, and US futures tumbling even as European stocks plunged only to kneejerk higher as markets are in clear turmoil and nobody knows just what is going on right now. In other asset classes, Treasury yields, understandably plunged across the entire world, and the entire Swiss bond curve left of the 10 Year is now negative, with the On The Run itself threatening to go negative soon as can be seen on the table below: All Swiss government bill and bond yields out to 7 years are negative: pic.twitter.com/b4YCVSDFu7 — Jamie McGeever (@ReutersJamie) January 15, 2015 Crude and other commodities, except gold, are also tumbling, as are most risk assets over concerns what today's epic margin call will mean when the closing bell arrives. An immediate, and amusing, soundbite came from the CEO of Swatch Nick Hayek who said that "words fail me" at the SNB action: "Today's SNB action is a tsunami for the export industry and for tourism, and finally for the entire country." More from Reuters:

European officials are demanding answers and investigations into a joint U.S. and U.K. hack of the world’s largest manufacturer of mobile SIM cards, following a report published by The Intercept Thursday. The report, based on leaked documents provided by NSA whistleblower Edward Snowden, revealed the U.S. spy agency and its British counterpart Government Communications Headquarters, GCHQ, hacked the Franco-Dutch digital security giant Gemalto in a sophisticated heist of encrypted cell-phone keys. The European Parliament’s chief negotiator on the European Union’s data protection law, Jan Philipp Albrecht, said the hack was “obviously based on some illegal activities.” “Member states like the U.K. are frankly not respecting the [law of the] Netherlands and partner states,” Albrecht told the Wall Street Journal. Sophie in ’t Veld, an EU parliamentarian with D66, the Netherlands’ largest opposition party, added, “Year after year we have heard about cowboy practices of secret services, but governments did nothing and kept quiet […] In fact, those very same governments push for ever-more surveillance capabilities, while it remains unclear how effective these practices are.”

“If the average IT whizzkid breaks into a company system, he’ll end up behind bars,” In ’t Veld added in a tweet Friday. The EU itself is barred from undertaking such investigations, leaving individual countries responsible for looking into cases that impact their national security matters. “We even get letters from the U.K. government saying we shouldn’t deal with these issues because it’s their own issue of national security,” Albrecht said. Still, lawmakers in the Netherlands are seeking investigations. Gerard Schouw, a Dutch member of parliament, also with the D66 party, has called on Ronald Plasterk, the Dutch minister of the interior, to answer questions before parliament. On Tuesday, the Dutch parliament will debate Schouw’s request. Additionally, European legal experts tell The Intercept, public prosecutors in EU member states that are both party to the Cybercrime Convention, which prohibits computer hacking, and home to Gemalto subsidiaries could pursue investigations into the breach of the company’s systems.

According to secret documents from 2010 and 2011, a joint NSA-GCHQ unit penetrated Gemalto’s internal networks and infiltrated the private communications of its employees in order to steal encryption keys, embedded on tiny SIM cards, which are used to protect the privacy of cellphone communications across the world. Gemalto produces some 2 billion SIM cards a year. The company’s clients include AT&T, T-Mobile, Verizon, Sprint and some 450 wireless network providers. “[We] believe we have their entire network,” GCHQ boasted in a leaked slide, referring to the Gemalto heist.

The NSA and Britain's GCHQ hacked the world's biggest SIM card maker to harvest the encryption keys needed to silently and effortlessly eavesdrop on potentially millions of people. That's according to documents obtained by surveillance whistleblower Edward Snowden and leaked to the web on Thursday. "Wow. This is huge – it's one of the most significant findings of the Snowden files so far," computer security guru Bruce Schneier told The Register this afternoon. "We always knew that they would occasionally steal SIM keys. But all of them? The odds that they just attacked this one firm are extraordinarily low and we know the NSA does like to steal keys where it can." The damning slides, published by Snowden's chums at The Intercept, detail the activities of the as-yet unheard-of Mobile Handset Exploitation Team (MHET), run by the US and UK. The group targeted Gemalto, which churns out about two billion SIM cards each year for use around the world, and targeted it in an operation dubbed DAPINO GAMMA.

Gemalto's hacking may also bring into question some of its other security products as well. The company supplies chips for electronic passports issued by the US, Singapore, India, and many European states, and is also involved in the NFC and mobile banking sector. It's important to note that this is useful for tracking the phone activity of a target, but the mobile user can still use encryption on the handset itself to ensure that some communications remain private. "Ironically one of your best defenses against a hijacked SIM is to use software encryption," Jon Callas, CTO of encrypted chat biz Silent Circle told The Register. "In our case there's a TCP/IP cloud between Alice and Bob and that can deal with compromised routers along the path as well as SIM issues, and the same applies to similar mobile software."

On Wednesday the UK government admitted that its intelligence agencies had in fact broken the ECHR when spying on communications between lawyers and those suing the British state, so GCHQ might want to reconsider that statement.

As the United States slides back into war in the Middle East, the specter of Vietnam hovers over the endeavor with some observers wondering if wishful thinking will again replace hardheaded analysis about the risks and the costs, writes ex-CIA analyst Ray McGovern.

Why was I reminded of Vietnam on Saturday when Gen. Martin Dempsey, Chairman of the Joint Chiefs of Staff, visited Iraq to “get a firsthand look at the situation in Iraq, receive briefings, and get better sense of how the campaign is progressing” against the Islamic State, also known as ISIS or ISIL? For years as the Vietnam quagmire deepened, U.S. political and military leaders flew off to Vietnam and were treated to a snow job by Gen. William Westmoreland, the commander there. Many would come back glowing about how the war was “progressing.”

Dempsey might have been better served if someone had shown him Patrick Cockburn’s article in the Independent entitled “War with Isis: Islamic militants have an army of 200,000, claims senior Kurdish leader.” Fuad Hussein, the chief of staff of Kurdish President Massoud Barzani, told Cockburn that “I am talking about hundreds of thousands of fighters because they are able to mobilize Arab young men in the territory they have taken.”

With oil prices on the slide, members of the once-dominant Organization of the Petroleum Exporting Countries (OPEC) decided last week not to attempt to rally them by cutting production, leaving the Brent Crude price hovering at about US$70 (A$83) per barrel. A curious decision, perhaps, by a 12-nation bloc that has previously kept an iron grip on the world’s oil trade. But not so curious when you consider that OPEC is no longer an all-powerful cartel – now it has plenty of competition. For the first time since its formation in 1960, two of the top three oil-producing countries (the United States and Russia) are outside OPEC. While OPEC controls low-cost oil, it has lost supply control at higher prices and cannot push prices up like it could in the 1970s – or at least, not without stimulating a lot more supply from elsewhere. According to the US Energy Information Agency, the United States now produces 11.1 million barrels of oil per day – about the same as Saudi Arabia (11.7 million barrels) and Russia (10.4 million barrels).

This new situation is a free-for-all between the three major players: OPEC (led by Saudi Arabia), US-based private oil companies, and Russian state-controlled oil firms. All three groups have the same reason for wanting to produce more – they need or want more money in the short-medium term to satisfy their current spending, shareholder and salary expectations. Amid this competition, cutting production on purpose isn’t such an attractive move.

Concluding Thoughts

This case well illustrates both the challenges faced by modern law enforcement in retrieving information it needs to pursue and prosecute wrongdoers, and the threat to the privacy of innocent parties from a vigorous criminal investigation. At the time of Tamura, most individuals and enterprises kept records in their file cabinets or similar physical facilities. Today, the same kind of data is usually stored electronically, often far from the premises. Electronic storage facilities intermingle data, making them difficult to retrieve without a thorough understanding of the filing and classification systems used—something that can often only be determined by closely analyzing the data in a controlled environment. Tamura involved a few dozen boxes and was considered a broad seizure; but even inexpensive electronic storage media today can store the equivalent of millions of pages of information. 1176*1176 Wrongdoers and their collaborators have obvious incentives to make data difficult to find, but parties involved in lawful activities may also encrypt or compress data for entirely legitimate reasons: protection of privacy, preservation of privileged communications, warding off industrial espionage or preventing general mischief such as identity theft. Law enforcement today thus has a far more difficult, exacting and sensitive task in pursuing evidence of criminal activities than even in the relatively recent past. The legitimate need to scoop up large quantities of data, and sift through it carefully for concealed or disguised pieces of evidence, is one we've often recognized. See, e.g., United States v. Hill, 459 F.3d 966 (9th Cir.2006).

This pressing need of law enforcement for broad authorization to examine electronic records, so persuasively demonstrated in the introduction to the original warrant in this case, see pp. 1167-68 supra, creates a serious risk that every warrant for electronic information will become, in effect, a general warrant, rendering the Fourth Amendment irrelevant. The problem can be stated very simply: There is no way to be sure exactly what an electronic file contains without somehow examining its contents—either by opening it and looking, using specialized forensic software, keyword searching or some other such technique. But electronic files are generally found on media that also contain thousands or millions of other files among which the sought-after data may be stored or concealed. By necessity, government efforts to locate particular files will require examining a great many other files to exclude the possibility that the sought-after data are concealed there. Once a file is examined, however, the government may claim (as it did in this case) that its contents are in plain view and, if incriminating, the government can keep it. Authorization to search some computer files therefore automatically becomes authorization to search all files in the same sub-directory, and all files in an enveloping directory, a neighboring hard drive, a nearby computer or nearby storage media. Where computers are not near each other, but are connected electronically, the original search might justify examining files in computers many miles away, on a theory that incriminating electronic data could have been shuttled and concealed there.

Presidents meeting at the Non-Aligned Summit in 2012 | Photo: Presidency of India Published 8 February 2015 0 + We Recommend The group of 120 nations issued a statement denouncing the sanctions as an intervention into Venezuelan affairs. The Non-Aligned Movement issued a statement Saturday rejecting the latest set of sanctions imposed by the United States against Venezuelan officials. The 120-nation body described the sanctions as “intended to undermine Venezuela's sovereignty, its political independence and its right to self-determination.” The U.S. government announced a new set of sanctions last week which target former and current Venezuelan officials. The U.S. has justified various rounds of sanctions by claiming corruption and that human rights abuses occurred in the oil-rich county during a wave of opposition violence last year that left 43 dead. However, the Venezuelan government has pointed out the sanctions are politically motivated and that they form part of U.S. plans to oust the country’s elected government, given that the overwhelming majority of the 43 fatalities were caused by right-wing extremists. The Non-Aligned Movement considers the unilateral sanctions a “violation of international law, including the United Nations Charter and the basic principles of international law of relations between states.” Furthermore, the group of nations considered the measure “coercive” and manifested its solidarity with the Venezuelan people and their government.

The UNASUR group of South American nations also rejected the sanctions and will launch a probe to evaluate Venezuela's evidence of U.S. meddling in the country’s internal affairs.

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.

Translated from Arabic language Alrai Media (thanks to the reliable Fort Russ Russian news site), the senior Syrian officer at the operations room is quoted as saying: “Soon Syria will announce that any country using the airspace without coordinating with Damascus will be viewed as hostile and [we] will shoot the jet down without warning. Those willing to fight terrorism and coordinate with the military leadership will be granted safe corridors.” This may seem like a dangerous escalation. American fighter jets have been bombing Syrian territory since September 2014, having carried out thousands of air strikes allegedly against the Islamic State (IS) terror group (also known by its Arabic name Daesh). Since the Paris terror attacks last month, France has stepped up its air strikes in Syria too. In the past week, Britain and Germany parliaments have voted for their air forces to join the other NATO members in aerial operations. The US-led bombing coalition in Syria also includes Turkey, Saudi Arabia and Qatar. Russia is the only country whose military aircraft are legally deployed in Syria because Moscow has the full consent of the Syrian government. All the others do not have consent from Damascus. So we have at least seven foreign powers deploying their warplanes to bomb Syrian territory – all in violation of international law.

It is irrelevant whether the US-led alliance claims to be fighting terrorists, or whether they claim it is in “self-defence” as France, Britain and Germany are. The Germany justice minister Heiko Maas, speaking after the Bundestag voted for military action this week, claimed that the United Nations Security Council resolution passed last month in the wake of the Paris attacks makes the German intervention legal. That UNSC resolution does not specifically sanction military action. In any case, the ultimate legal criterion is the position of the Syrian state authorities. Western governments and their media have done everything to discredit, demonise and delegitimise the Syrian government. That’s part of the US-led criminal enterprise for regime change in Syria. But the fact remains, Syria is a sovereign state fully entitled the legal rights of all other UN members. If the Syrian government of President Bashar al-Assad – which is the internationally recognised governing authority of Syria and retains its seat at the UN – does not consent to foreign military intervention, then that intervention is illegal, as Moscow and Damascus have repeatedly pointed out. Syria, with the S-300 missile system supplied by its Russian ally, now has the technical means to defend its borders and airspace from all intruders. It also has the legal right to defend the inviolability of its territory. After all, US President Barack Obama invoked this right with regard to Turkey after the shoot-down of the Russian Su-24. Obama said Turkey had “every right to protect its skies” (even though the evidence shows that the Russian fighter jet did not breach Turkish territory). In other words: what’s good for Turkey is good for Syria, as for any other nation.

Now, some might say it is a reckless move for Syria to train its skies with the powerful S-300. If a US, French, British or German warplane is shot down then that may ignite a full-on war with the American NATO military alliance. Russia would inevitably be dragged into the fight, which could slide into a world war between nuclear powers. But hold on a minute. That logic amounts to the US and its allies using such fear as a weapon to disarm others and to prevent sovereign states from exercising their rights. Such a dynamic is a blank cheque for powers to bully and oppress others. As Russian President Vladimir Putin has said time and again, the issue is one abiding by international law. Without respect for international law then the world resorts to the law of the jungle and barbarism, as Putin said in his recent state of the nation speech. What we have seen in recent years since the US-led wars in Afghanistan and Iraq in 2001-2003 is the wholesale erosion of sovereignty. This has involved the overt deployment of military force and the covert use of “asymmetric war”, says American political analyst Randy Martin (who writes at crookedbough.com).

Brazilians have become inured to seeing politicians and businessmen marched off to prison for corruption. But the mug shot of banker André Esteves—unshaven and frowning—that flashed across TV screens in early December was a shock. Part of a cadre of mavericks who got astonishingly rich from Brazil’s transformation into one of the world’s top 10 economies in the 2000s, Esteves helped turn Grupo BTG Pactual into Latin America’s biggest standalone investment bank. Supremely confident, Esteves—who was a billionaire by his mid-30s—liked to quip that the initials in his company’s name stood for “Better than Goldman.”Around dawn on Nov. 25, Esteves’s fortunes soured in an instant. Police showed up at his apartment, which faces Rio de Janeiro’s legendary Ipanema beach, and hauled him away on allegations of obstructing a federal investigation into a massive pay-to-play scheme centered on Brazil’s state-run oil giant, Petrobras. Now Esteves, 47, resides in a cell block with concrete beds and communal toilets at Bangu, a high-security prison in Rio better known for housing drug traffickers and murderers.

Having its founder, chief executive officer, and chairman behind bars has pushed BTG Pactual to the brink of insolvency as clients pull their money out. Within days of his arrest, Esteves had relinquished his controlling stake in the firm, and his partners had begun a wholesale selloff of assets. To avert disaster, Brazil’s central bank helped engineer a $1.6 billion rescue line from the country’s privately funded deposit guarantee fund. Still, the bank’s shares have lost half their value since Esteves’s arrest. On Dec. 7, prosecutors formally accused the banker of obstruction of justice. Antônio Carlos de Almeida Castro, Esteves’s lawyer, says his client has done nothing wrong.The metastatic graft scandal that sent Esteves to jail threatens more than the survival of BTG. So many legislators are implicated, Congress has been unable to pass legislation to contain an exploding budget deficit. President Dilma Rousseff has grown so unpopular that lawmakers are maneuvering to impeach her for allegedly cooking the government’s books. Meanwhile, the economy is sliding into what Goldman Sachs calls a full-blown depression.

BTG’s collapse won’t cause Brazil’s capital markets to seize up as Lehman Brothers’ failure did in the U.S. in 2008. Yet having one of the country’s most prominent financiers behind bars is a body blow to the confidence of investors at a time when Brazil needs their cash. “It very much gives you the impression that the corruption scheme is so widespread that it induces a kind of counterparty risk,” says Monica de Bolle, a former International Monetary Fund economist. “You enter into transactions with people in Brazil without knowing whether or not they might be implicated in something.” The result: “Nothing gets done. There’s no business,” she says.

Wells Fargo WFC -9.22%Wells FargoWFC$58.16$-5.91(-9.22%)As of 02/06/2018, 01:01am EST is facing far more than a fine for its fake accounts scandal, in which employees at the lender's branches across the country opened over a million fraudulent checking and credit card accounts to hit their numbers. Late on Friday, the Federal Reserve decided to restrict growth at America's third-largest bank by assets until its risk and governance is improved. The order, which also called for a revamp of Wells Fargo's board of directors, sent the bank reeling in early trading Monday. Wells Fargo shares plunged 9% lower in Monday trading, erasing most of its gains over the past 12 months. For its top shareholder, Warren Buffett's Berkshire Hathaway, the Fed-inspired stock slide meant its Wells Fargo holdings lost over $2.7 billion in value. "We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again," said chair Janet L. Yellen on Friday. The order was her last as head of the Federal Reserve. On Monday, successor Jerome Powell was sworn in. Added Yellen, "the enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers." In September 2016, Wells Fargo paid a $185 million fine to the Consumer Financial Protection Bureau after the agency found branch bankers had opened well over a million fake accounts, which generated millions of dollars in fees to the lender. When the scandal, which occurred over almost a decade, was first revealed, Wells Fargo and its board didn't immediately overhaul their leadership, or sanction top executives in the divisions where fake accounts were created. Only after significant public outcry, in addition to a widening scope of the scandal, did Wells Fargo begin a revamp, firing CEO John Stumpf and clawing back bonuses for numerous executives. Backer Warren Buffett later said in an appearance on CNBC the bank and its leadership had misjudged the severity of the problem.

In addition to harsh words, the Fed is ordering a sanction of almost unprecedented severity. It will restrict the bank's growth until its governance and risk management improve, though it will allow Wells to continue current operations from taking deposits to offering loans.

Three Wells Fargo long-standing board directors, John Chen, Lloyd Dean and Enrique Hernandez, will likely retire at the firm's annual meeting as part of the Fed's additional order for a refreshment of four board directors. Analysts did not brush off the Fed's move, as they have large fines coming out of the crisis.

On the face of it, these should be heady times for American workers. U.S. unemployment is as low as it’s been in nearly two decades (3.9% as of July) and the nation’s private-sector employers have been adding jobs for 101 straight months – 19.5 million since the Great Recession-related cuts finally abated in early 2010, and 1.5 million just since the beginning of the year. But despite the strong labor market, wage growth has lagged economists’ expectations. In fact, despite some ups and downs over the past several decades, today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. And what wage gains there have been have mostly flowed to the highest-paid tier of workers.

The disconnect between the job market and workers’ paychecks has fueled much of the recent activism in states and cities around raising minimum wages, and it also has become a factor in at least some of this year’s congressional campaigns.

After adjusting for inflation, however, today’s average hourly wage has just about the same purchasing power it did in 1978, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.