Month: January 2016

Kasich: Shut Up and Let Your Political Masters Secretly Decide How to Break Your Encryption!

You think he's annoying? Imagine being the person who has to write a blog post about him.Let’s predict that tonight’s narrative will be “Gosh, there was an awful lot of policy discussion at this debate without Trump there!” While that’s true, as somebody who has watched every single debate, I am not hearing much I haven’t heard before. It might be pretty illuminating for somebody who might have been ignoring the debates but tuned in tonight. I’m not sure who that person might be.

There is one tech privacy issue that did not get much illumination, but not because it wasn’t asked about. Moderator Megyn Kelly attempted to ask Ohio Gov. John Kasich about whether the federal government should mandate encryption back doors to be able to access data from smart phones and other devices in order to fight terrorism or crime. Things got kind of weird (transcript via the Washington Post):

KELLY: Governor Kasich, You appear to back in another debate, a so-called back door to encrypted cell phone technology, which protects most smartphones that we all have from hacking. And it includes our phones and it also protects the cell phones of the terrorists.

Now the tech companies and a group of MIT scientists, smart guys, right, warn that if they create a way for the FBI to have a back door into our encrypted communications, then the bad guys will exploit it too. And they say that this is going to cause more security problems than it would solve for everyday Americans. Are they wrong?

KASICH: Well, look the Joint Terrorism Task Force needs resources and tools. And those are made up of the FBI, state and local law enforcement. And Megyn, it’s best not to talk anymore about back doors and encryption, it will get solved, but it needs to be solved in the situation of the White House with the technology folks.

KELLY: But this is public testimony.

KASICH: But I just have to tell you that it’s best with some of these things not be said. Now I want to go back something.

And then he completely changed the subject. In a way, he didn’t answer the question, but really, he did. The answer was, simply, that the American citizens don’t get any say at all in how much privacy and security their data should have. Or else, the terrorists win!

His answer is strange, but in its own fashion, this is exactly how the encryption debate is going. Politicians like Kasich (and Jeb Bush and Hillary Clinton, and others) want the government to be able to get through encryption in the name of national security, but there is very little engagement in the reality that tech experts keep bringing up: There’s no way to do this without opening up people’s data to all sorts of potential breaches. So they say utter nonsense (like Clinton did in a previous debate) or like Kasich, they want to try to make even the discussion a matter of national security so that citizens have no idea what is going to happen.

And this is a problem because, as the tech experts warn, we will be the ones facing the risk and having our privacy violated with little recourse, or if Kasich has his way, little awareness that the risk even exists. Remember, in December the omnibus spending bill authorized new surveillance authorities of our data under the guise of fighting cyberterrorism. It was snuck in so relatively quietly that even the candidates seemed to be unaware it had happened and a couple of them were calling for its passage in the last debate.

The new authorities come with liability protection for companies that share their customers’ data (as in, your data) with the government. That means, in the event that things go wrong, we are limited in our ability to turn to the courts to seek judicial remedy.

When Kasich calls for the media to keep their mouths shut and let politicians hammer out back door encryption access with tech companies, we should additionally be concerned that this will be their “solution” to the possibility that citizens could become more vulnerable to breaches, intrusions, and fraud. They could simply try to ease tech companies’ fears by making it so that citizens won’t be able to sue them.

It’s easy to ignore Kasich’s comments, because he appears to be such a non-factor in this race. But his attitude toward encryption is far from unique or unusual among politicians, even if his answer seemed bizarre.

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Tonight’s GOP Debate Showed What the Republican Primary Looks Like Without Donald Trump

Tonight’s Republican debate on Fox News offered a brief glimpse at a race without Donald Trump. And what that glimpse showed us was a race that is smarter, more substantive, and better at revealing the spirited differences of policy, personality, and ideology in the Republican primary field.

The two candidates who benefited most from Trump’s absence were Jeb Bush and Rand Paul. Without Trump on the stage, Bush actually seemed to have some life and energy — and his record as governor and policy knowledge came across more clearly. Sure, Bush could still be halting and awkward at times, but he didn’t look like a skinny nerd getting bullied on the playground, as has often been the case in his encounters with Trump.  

Rand Paul, meanwhile, had what was arguably his best debate so far. Partly that’s because he was more polished than he has been, more fluent and eloquent, especially on foreign policy. And partly it’s because, without Trump around, Paul became the foremost voice of opposition on the stage, the best counterweight to the GOP’s conventional wisdom — which, of course, there was a lot of.

Make no mistake: The GOP minus Trump is no haven for libertarians. It’s still hawkish and restrictionist and focused on social conservative identity issues. And even the most libertarian-leaning candidate, Rand Paul, got in digs about the need for stricter immigration screening.

Yet the Republican party represented on stage tonight was less overtly ridiculous, less prone to childish insult games, and more willing to engage in substantive debate about issues ranging from Obamacare and Medicaid to ethanol and immigration, than it has been since Trump entered the race last year. 

In short, tonight’s debate was something like an actual presidential debate rather than a form of crass political entertainment. And for that reason alone, I think it was the best debate yet. Admittedly, that’s a pretty low bar, but at this point, I’ll take what I can get. 

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Rand Paul Covers Comprehensive Criminal Justice Reform in Debate Answer on Ferguson

Tonight’s Fox News Republican debate featured excellent questions on a wide variety of topic. For probably the first time in this election cycle a debate (Republican or Democrat) included a question about Ferguson, Missouri, the town whose protests against police abuse in 2014 propelled the issue of police violence onto the national stage, where its remained ever since.

That question went to Rand Paul, whose answer included more of the policy agenda of Black Lives Matter than probably any other debate answer has before.

He noted his support for body cameras, one of ten policy planks championed by Campaign Zero, an effort organized by Black Lives Matter activists.

He also pointed out that a third of Ferugson’s budget came from civil fines. “Now you and I and many of the people in this audience, if we get a $100 fine, we can survive it,” Paul told moderator Bret Baier. “If you’re living on the edge of poverty and you get a $100 fine or your car towed, a lot of times you lose your job.”

Ending for-profit policing such as that is another of the policy planks championed by Campaign Zero.

Finally, Paul also managed to fit in the influence of the war on drugs on policing and its disproportionate impact on African-Americans, bringing up the problem of the “missing black men,” a topic more often brought up by Democrats, even if they refuse to acknowledge their major role in creating that problem, specifically, but not only, through the Democrat- and Clinton-backed 1994 crime bill.

“In Ferguson, for every 100 African-American women, there are only 60 African-American men,” Paul noted. “Drug use is about equal between white and black, but our prisons—three out of four people in prison are black or brown. I think something has to change. I think it’s a big thing that our party needs to be part of, and I’ve been a leader in Congress on trying to bring about criminal justice reform.”

As Elizabeth Nolan Brown observed earlier tonight, the libertarian Rand Paul appears to be back. Without Trump at tonight’s debate, the chances of each of the remaining candidates to improve their standing in the polls appeared to go up at least while they were on stage.

Paul could still win the nomination. But even if he doesn’t, his answer illustrates why, Rand Paul and libertarian Republicans like him will be critical in expanding the GOP base beyond the kind of element that Trump’s taken advantage of so adeptly to become a juggernaut.

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Marco Rubio Says ISIS is Too Scary For the First Amendment at GOP Debate

At tonight’s Republican presidential debate, Too scared for free speech.Fox News moderator Megyn Kelly reminded Florida Senator Marco Rubio that he had previously told her he supports closing down mosques and diners (presumably ones frequented by Muslims) if they are suspected of being meeting places for radical jihadists.

Kelly reminded Rubio, “The Supreme Court has made clear that hateful speech is generally protected by the First Amendment. In other words, radical Muslims have the right to be radical Muslims unless they turn to terror.” She then asked, “Doesn’t your position run afoul of the First Amendment?”

Rubio responded:

That’s the problem. Radical Muslims and radical Islam is not just hate talk, it’s hate action. They blow people up. Look at what they did in San Bernardino, look at the attack they inspired in Philadelphia…where a guy shot a police officer three times, told the police ‘I did it because I was inspired by ISIS.’

The threat we face from ISIS is unprecedented. There has never been a jihadist group like this. They have affiliates in over a dozen countries now. They are the best-funded radical jihadist group in the history of the world. And they have shown a sophisticated understanding of the laws of other countries on how to insert fighters into places…

When I am president of the United States, if there is some place in this country where radical jihadists are planning to attack the United States, we will go after them wherever they are and if we capture them alive they are going to Guantanamo.

The GOP contenders are all fond of mocking the sentiments of the mainstream media, left-wing eggheads, and the idea that Barack Obama and Hillary Clinton are constantly looking to Europe as their model for America. But by hyperventilating over a jihadist group that has not yet been able to orchestrate an attack on the US that even remotely matches the devastation caused by ISIS’ forbear on 9/11/01, Rubio unwittingly apes the very “elitist” entities so despised by the Republican base. 

You know who else thinks ISIS is an “unprecedented” threat far too scary and sophisticated to allow for constitutionally-protected free expression? Notorious First Amendment nemesis and University of Chicago professor Eric Posner, as well as the veritable boogeyman for American conservatives, The New York Times, which recently expressed similar “second thoughts” about the First Amendment.

Rubio supports extralegal spying on American Muslims? The New York Values of the NYPD just had to settle a lawsuit over that.

And what nation of Old Europe drives Republicans crazier than France? Well, their recent draconian crackdown on civil liberties, including the shuttering of mosques and warrantless searches of Muslim-owned business, should warm Rubio’s security hawk heart and send chills down the spines of anyone who believes in due process and the protection of unpopular speech.

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Chaos Ensues After Nikkei Reports Bank Of Japan Discussed Negative Interest Rate Policy

Just minutes before The BoJ is due to release its statement, USDJPY and Nikkei 225 went haywire around 2220ET as Nikkei news dropped a headline about NIRP discussions taking place at The BoJ. This is not the BoJ statement but has sparked chaos in Japanese (and all carry trade linked markets). We can only assume this was some well-placed strawman for The BoJ statement enabling Kuroda to get a glimpse of what is possible.

Total chaos broke out ahead of the BoJ Statement…as Nikkei News dropped this headline…

  • *BOJ DISCUSSES NEGATIVE INTEREST RATE POLICY, NIKKEI SAYS

BOJ discusses introduction of negative interest rates today at policy meeting, Nikkei reports.

  • Negative rates discussed due to growing concern of downward pressure on Japan economy and CPI because of cheap crude oil, China slowdown: Nikkei

Nikkei 225 is up 500 points on the news, USDJPY +50 pips

 

Some context for that move…

 

Having given up all its gains since the last QQE update…

 

 

G622


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Americans Really, Really Hate The Government

Submitted by Michael Snyder via The Economic Collapse blog,

If there is one thing that Americans can agree on these days, it is the fact that most of us don’t like the government.  CBS News has just released an article entitled “Americans hate the U.S. government more than ever“, and an average of recent surveys calculated by Real Clear Politics found that 63 percent of all Americans believe the country is heading in the wrong direction and only 28 percent of all Americans believe that the country is heading in the right direction.  In just a few days the first real ballots of the 2016 election will be cast in Iowa, and up to this point the big story of this cycle has been the rise of “outsider” candidates that many of the pundits had assumed would never have a legitimate chance.  Donald Trump, Ted Cruz and Bernie Sanders have all been beneficiaries of the overwhelming disgust that the American people feel regarding what has been going on in Washington.

And it isn’t just Barack Obama or members of Congress that Americans are disgusted with.  According to the CBS News article that I referenced above, our satisfaction with various federal agencies has fallen to an eight year low…

A handful of industries are those “love to hate” types of businesses, such as cable-television companies and Internet service providers.

 

The federal government has joined the ranks of the bottom-of-the-barrel industries, according to a new survey from the American Customer Satisfaction Index. Americans’ satisfaction level in dealing with federal agencies –everything from Treasury to Homeland Security — has fallen for a third consecutive year, reaching an eight-year low.

So if we are all so fed up with the way that things are running, it should be easy to fix right?

Unfortunately, things are not so simple.

In America today, we are more divided as a nation than ever.  If you ask 100 different people how we should fix this country, you are going to get 100 very different answers.  We no longer have a single shared set of values or principles that unites us, and therefore it is going to be nearly impossible for us to come together on specific solutions.

You would think that the principles enshrined in the U.S. Constitution should be able to unite us, but sadly those days are long gone.  In fact, the word “constitutionalist” has become almost synonymous with “terrorist” in our nation.  If you go around calling yourself a “constitutionalist” in America today, there is a good chance that you will be dismissed as a radical right-wing wacko that probably needs to be locked up.

The increasing division in our nation can be seen very clearly during this election season.

On the left, an admitted socialist is generating the most enthusiasm of any of the candidates.  Among many Democrats today, Hillary Clinton is simply “not liberal enough” and no longer represents their values.

 

On the other end of the spectrum, a lot of Republican voters are gravitating toward either Donald Trump or Ted Cruz.  Both of those candidates represent a complete break from how establishment Republicans have been doing things in recent years.

Now don’t get me wrong – I am certainly not suggesting that we need to meet in the middle.  My point is that there is absolutely no national consensus about what we should do.  On the far left, they want to take us into full-blown socialism.  Those that support Donald Trump or Ted Cruz want to take us in a more conservative direction.  But even among Republicans there are vast disagreements about how to fix this country.  Establishment Republicans greatly dislike both Trump and Cruz, and they are quite determined to do whatever it takes to keep either of them from getting the nomination.  The elite have grown very accustomed to anointing the nominee from each party every four years, and so the popularity of Trump and Cruz is making them quite uneasy this time around.  The following comes from the New York Times…

The members of the party establishment are growing impatient as they watch Mr. Trump and Mr. Cruz dominate the field heading into the Iowa caucuses next Monday and the New Hampshire primary about a week later.

 

The party elders had hoped that one of their preferred candidates, such as Senator Marco Rubio of Florida, would be rising above the others by now and becoming a contender to rally around.

The global elite gathered in Davos, Switzerland are also greatly displeased with Trump.  Just check out some of the words that they are using to describe him…

“Unbelievable“, “embarrassing” even “dangerous” are some of the words the financial elite gathered at the World Economic Forum conference in the Swiss resort of Davos have been using to describe U.S. Republican presidential frontrunner Donald Trump.

 

Although some said they still expected his campaign to founder before his party picks its nominee for the November election many said it was no longer unthinkable that he could be the Republican candidate.

The truth is that the Republican Party represents somewhere less than half the population in the United States, and today it is at war with itself.  Supporters of Trump have a significantly different vision of the future than supporters of Cruz, and the establishment wing wants nothing to do with either candidate.

A lot of people seem to assume that since Trump is leading in the polls that he will almost certainly get the nomination.

That is not exactly a safe bet.

It is my contention that the establishment will pull out every trick in the book to keep either him or Cruz from getting the nomination.  And in order to lock up the nomination before the Republican convention, a candidate will need to have secured slightly more than 60 percent of all of the delegates during the caucuses and the primaries.

The following is an excerpt from one of my previous articles in which I discussed the difficult delegate math that the Republican candidates are facing this time around…

It is going to be much more difficult for Donald Trump to win the Republican nomination than most people think.  In order to win the nomination, a candidate must secure at least 1,237 of the 2,472 delegates that are up for grabs.  But not all of them will be won during the state-by-state series of caucuses and primaries that will take place during the first half of 2016.  Of the total of 2,472 Republican delegates, 437 of them are unpledged delegates – and 168 of those are members of the Republican National Committee.  And unless you have been hiding under a rock somewhere, you already know that the Republican National Committee is not a fan of Donald Trump.  In order to win the Republican nomination without any of the unpledged delegates, Trump would need to win 60.78 percent of the delegates that are up for grabs during the caucuses and primaries.  And considering that his poll support is hovering around 30 percent right now, that is a very tall order.

 

In the past, it was easier for a front-runner to pile up delegates in “winner take all” states, but for this election cycle the Republicans have changed quite a few things.  In 2016, all states that hold caucuses or primaries before March 15th must award their delegates proportionally.  So when Trump wins any of those early states, he won’t receive all of the delegates.  Instead, he will just get a portion of them based on the percentage of the vote that he received.

 

In 2016, more delegates will be allocated on a proportional basis by the Republicans than ever before, and with such a crowded field that makes it quite likely that no candidate will have secured enough delegates for the nomination by the time the Republican convention rolls around.

If no candidate has more than 60 percent of the delegates by the end of the process, then it is quite likely that we will see the first true “brokered convention” in decades.

If we do see a “brokered convention”, that would almost surely result in an establishment candidate coming away with the nomination.  That list of names would include Bush, Rubio, Christie and Kasich.

And if by some incredible miracle either Trump or Cruz does get the nomination, the elite will move heaven and earth to make sure that Hillary Clinton ends up in the White House.

For decades, it has seemed like nothing ever really changes no matter which political party is in power, and that is exactly how the elite like it.

Our two major political parties are really just two sides of the same coin, and they are both leading this nation right down the toilet.


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Rand Paul Claims He’s Rightful Heir to ‘Liberty Vote’ in GOP Debate

As Peter wrote earlier today, with Donald Trump out of tonight’s Republican presidential debate, “the candidates have an opportunity, however brief, to show what they’re like in his absence, to demonstrate, if only for a few hours, the kinds of campaigns they wanted to run.” Apparently, the kind of campaign Kentucky Sen. Rand Paul wants to run (finally?) is as the rightful heir to the “liberty vote.” 

The liberty vote wouldn’t go for Texas Sen. Ted Cruz, Paul said early in Thursday night’s debate, blasting Cruz for skipping the Audit the Fed vote and rejecting Cruz’s claim that he could attract libertarian support.

Paul asserted that the liberty vote will “stay in the family.” 

Paul went on to criticize bulk National Security Agency (NSA) metadata collection, saying that “the bulk collection of your phone data and the invasion of your privacy did not stop one terrorist attack. If we want to collect the records of terrorists, let’s do it the old-fashioned way,” by using the fourth amendment. And he criticized the war on drugs, overcriminalization, and overpolicing. “I’ve been a believer in Congress about trying to bring about criminal justice reform,” he said. 

As Reason’s Matt Welch and Jacob Sullum have both pointed out recently, Cruz has completely flip-flopped on criminal justice reform.

Cruz, “once a leading Republican advocate of sentencing reform, has re-positioned himself as an opponent, warning that letting federal prisoners out early will lead to an increase in crime,” noted Sullum. “This reversal is especially startling because the bill that Cruz opposes as dangerously soft on crime is less ambitious than the one he proudly cosponsored last spring.” 

Sen. Paul touched on why “Cruz is a crummy liberty candidate,” as Brian Doherty put it, in a press all earlier this week. Paul also dinged Florida Sen. Marco Rubio for wanting NSA to collect “100 percent of our cell phone data—most in the liberty movement are not interested in government collecting any cell phone data much less 100 percent.” 

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Small Arms Sales Skyrocket In Germany In Reaction To Refugee Attacks

As we’ve documented on a number of occasions over the past three or so months, Germans have a newfound love for pepper spray.

In November, we noted that frightened Germans fearing a “foreign invasion” from the Mid-East, were rushing to stock up on what amounts to migrant-be-gone aerosol just in case a refugee should get any designs on trying to get too close.

“There is fear” explains Kai Prase, managing director of DEF-TEC Defense Technology GmbH in Frankfurt, one of the major producers of repellents. “For the past six to seven weeks we have been practically sold out.”

Yes, “there is fear”, and that fear only grew after New Year’s Eve when dozens of women reported being sexually assaulted by “gangs” of drunken “Arabs” in Cologne, among other cities.

The New Year’s incidents triggered even more interest in deterrent technology and before you knew it, Germans were Googling “pepper spray” like there was no tomorrow:

Of course, as we noted earlier this month, pepper spray isn’t much good against a Kalashnikov and besides, mace doesn’t sound like nearly as much fun as a “non-lethal gas pistol,” a replica firearm that shoots tear gas cartridges. 

“People no longer feel safe, otherwise they would not be buying so many products here,” a seller in North-Rhine Westphalia told Deutsche Welle who adds that the seller, like many of his colleagues, has been moving “an average of three times as many alarm, gas, and signal guns as he was prior to the attacks that took place in Cologne on New Year’s Eve.” 

Although you can’t go out and buy an AK-47 in Germany, you can obtain a so-called “small arms permit”, which gives you the right to own all sorts of fun things like the aforementioned gas pistol. For those who aren’t familiar with the weapon, here’s a helpful video (note the 1:57 mark when we get a look at “a person running with a… a club at a person who draws and fires on them”): 

There you go. You can shoot someone in the face and not kill them as long as you “have a spotless record ” when you apply for the permit.

“There has been an increase of at least 1,000 percent or more in Google search queries for gun permits since January,” Felix Beilharz, a social media expert from Cologne told DW.

And that’s not all.

Germans are also getting more interested in self defense courses. “Currently, those offering self-defense courses are also profiting from the concerns and fears of many German citizens. Many such courses are booked out for the next several weeks – that was not the case a year ago,” DW says.

“Several social media entries tagged with #Koelnbhf (Cologne train station) were advertising “efficient martial arts training,” RT adds.

Here’s a tweet that pretty much sums up the mood in Germany:

So perhaps Anders Rasmussen – the prevention specialist at the Danish Crime Prevention Council who we mocked earlier today – was correct to say that a move to make non-lethal deterrents legal “may quickly develop into a sort of armed competition between civilians,” as there does indeed appear to be a non-lethal arms race going on in Germany.

And just like that, Angela Merkel’s move to take in 1.1 million asylum seekers has turned the streets of Germany into the Wild West, where every man, woman, and child is carrying some manner of weapon.

The fine for pepper spraying a would-be assailant in Denmark is 500 kroner. Given the preponderance of Danes who are sneaking away to Germany to buy non-lethal weapons, we wonder what the penalty is for shooting an attacker in the face with a tear gas cartridge at point blank range.


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Why 2,667 Is The Most Important Number In China Tonight

Barring some miraculous 8% epic melt-up in the afternoon session – go down as the worst ever January for Chinese stocks. While that is a big enough deal, for now the 24%-plus plunge is the worst of any month since Lehman’s fallout in October 2008. However, it is close… if the Shanghai Composite closes below 2667.50 today, January 2016 will become the worst month for Chinese stocks since 1994… quite a feat in a “stable” and manipulated market.

Worst January ever…

 

“Worse since Lehman” or Worst in 21 years?

 

2667.50 is all that matters…

 

Charts: Bloomberg


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Trump vs Fox News: Live Webcast From Donald Trump’s “Alternative” Event

If Fox asked Facebook to tabulate the number of viewers at tonight’s GOP republican debate in Des Moines, Iowa, the answer would probably be over 1 billion. The reality is that most potential viewers will likely be hijacked to tonight’s “alternative” event, the one taking place just a few miles away at Drake University where Donald Trump – why is boycotting the Fox News debate – will address Wounded Warriors & Veterans but what he will really do is school the rest of the republican field how to control the media narrative and to remain constantly in the spotlight especially when he is nowhere near it.

As WSJ writes, Donald Trump‘s attempt to steal some of the limelight from the Fox News debate drew thousands to the campus of Drake University, a few miles away from where the official debate is being held. The line included hundreds of Drake students, many of whom said they were just curious to see Mr. Trump up close, but also some students who plan to caucus for the Republican front-runner on Monday night. However, many of the young people outside won’t get the chance to see him because the building only holds 700 or so people, leaving many standing outside in the cold.

Meanwhile, as Trump does his event, seven candidates are set to debate, starting at 9 p.m. ET. Here is what the lineup looks like (including Trump).

Few will watch this particular event.

Live webcast below from the event spearheaded by the republican who is now leaps and bounds ahead of the competition in Iowa, New Hampshire and South Carolina.


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