Father Of World Wide Web Launches Platform Which Aims To Radically Decentralize The Internet

“For people who want to make sure the Web serves humanity, we have to concern ourselves with what people are building on top of it,” Tim Berners-Lee told Vanity Fair last month. “I was devastated” he said while going through a litany of harmful and dangerous developments of the past three decades of the web. 

That’s why “the Father of the World Wide Web” has launched a start-up that intends to end the dominance of Facebook, Google, and Amazon, while in the process letting individuals take back control of their own data.

Berners-Lee’s new online platform and company Inrupt is being described as a “personal online data store,” or pod, where everything from messages, music, contacts or other personal data will be stored in one place overseen by the user instead of an array of platforms and apps run by corporations seeking to profit off personal information. The project seeks “personal empowerment through data” and aims to “take back” the web, according to company statements. 

The man who created the world wide web by implementing the first ever successful communication between a Hypertext Transfer Protocol (HTTP) client and server via the internet in 1989 lamented that his creation has been abused by powerful entities for everything mass surveillance to fake news to psychological manipulation to corporations commodifying individuals’ information

Sir Tim Berners-Lee, Image via Wikimedia Commons

But he’s long been at work on a new project to take the web back, described in depth by the business technology magazine Fast Company:

This week, Berners-Lee will launch, Inrupt, a startup that he has been building, in stealth mode, for the past nine months. Backed by Glasswing Ventures, its mission is to turbocharge a broader movement afoot, among developers around the world, to decentralize the web and take back power from the forces that have profited from centralizing it. In other words, it’s game on for Facebook, Google, Amazon.

“We have to do it now,” Berners-Lee said of the newly launched project. “It’s a historical moment.” He identified the main impetus behind his recent announcement that he’ll be going on sabbatical from his research professor post at MIT to work full-time on the project as the recent revelation that Facebook allowed political operatives to gain access to some 50 million users’ private data. 

At MIT Berners-Lee has for years led a team on designing and building a decentralized web platform called ‘Solid’ which will underlie the Inrupt platform. The Inrupt venture will serve as users’ first access to the new Solid decentralized web:

If all goes as planned, Inrupt will be to Solid what Netscape once was for many first-time users of the web: an easy way in. And like with Netscape, Berners-Lee hopes Inrupt will be just the first of many companies to emerge from Solid.

“I have been imagining this for a very long time,” says Berners-Lee.

As described on the Solid and Inrupt websites the new platform will allow users to have complete control over their information ‘pods’ (an acronym for “personal online data store”) — it is only they who will decide whether outside apps and sites will be granted access to it, and to what extent. 

Unlike Facebook or Twitter where all user information ultimately resides in centralized data centers and servers under control of the companies, applications on Inrupt will compete for users based on the services they can offer, and only the users can grant these apps “views” into their data, making personal data instantly portable between similar applications.

“The main enhancement is that the web becomes a collaborative read-write space, passing control from owners of a server, to the users of that system. The Solid specification provides this functionality,” the Solid website says.

Visual of the Inrupt prototype platform

Berners-Lee explained to Fast Company one example currently under development that could radically changed a popular product that has been prone to overstepping privacy boundaries and compromising data

For example, one idea Berners-Lee is currently working on is a way to create a decentralized version of Alexa, Amazon’s increasingly ubiquitous digital assistant. He calls it Charlie. Unlike with Alexa, on Charlie people would own all their data. That means they could trust Charlie with, for example, health records, children’s school events, or financial records. That is the kind of machine Berners-Lee hopes will spring up all over Solid to flip the power dynamics of the web from corporation to individuals.

With the weekend launch of Inrupt, developers across the globe this week will be invited to begin building their own decentralized apps through the Inrupt site. As its popularity grows the company will move forward to raise more funds, though it’s currently backed by a venture capital firm. 

Yet as his latest interview notes, “his plans could impact billion-dollar business models that profit off of control over data. It’s not likely that the big powers of the web will give up control without a fight.”

When this major potential disruptor was noted, Berners-Lee shot back: “We are not talking to Facebook and Google about whether or not to introduce a complete change where all their business models are completely upended overnight. We are not asking their permission.”

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Ivory Tower Compassion: Merkel Urges “Understanding” For East Germans

Authored by Mike Shedlock via MishTalk,

That pitiful look on Merkel’s face is not a plea to understand East Germans. It’s a plea for them to understand her.

Ahead of German Unity Day, Angela Merkel, says the issue of migration has split the country. She calls for Greater Compassion and Understanding for the Concerns of East Germans.

German Chancellor Angela Merkel told the Augsburger Allgemeine newspaper on Saturday that although German reunification was largely “a success story,” many communities in the country’s former communist east harbored resentment.

“Much of what happened in the early 90s is once again facing people (today),” Merkel said, referring to the period of upheaval that followed the reunification of East and West Germany on October 3, 1990.

Merkel said there had been a “certain amount of nervousness” in Germany since the 2017 federal election, which reduced her authority and saw the right-wing populist Alternative for Germany (AfD) emerge as the third-largest party. The chancellor said the challenge of migration, in particular, had opened up divisions in the country.

The recent violent protests that gripped the eastern city of Chemnitz following a fatal stabbing that was blamed on asylum-seekers served as an example of how damaging such divisions can be.

Merkel argued that was one reason to do everything one could to make the anti-migrant AfD “as small as possible.”

“For me that means addressing and solving the problems people are worried about,” she said, adding however that there was a need to draw clear boundaries “where there is hatred, where there are general suspicions, where minorities are marginalized.”

2018 Chemnitz Riots

For starters, it was indeed asylum-seekers that killed a German man leading up to the Chemnitz Riots.

In the early morning of 26 August, after a festival celebrating the city’s founding, a fight broke out resulting in the death of a German-Cuban man and serious injuries to two other people. Two Kurdish immigrants, one Iraqi, and one Syrian were named as suspects. The incident re-ignited the tensions surrounding immigration to Germany, which had been ongoing since 2015 and the European migrant crisis. In response, mass protests against immigration were ignited by far-right nationalist groups. The protests spawned riots and were followed by counter-demonstrations.

The protests seemed reasonable enough. Immigrants have killed, murdered and raped German citizens.

The German citizens are fed up, and rightfully so. That the protests got way out of hand is a separate issue.

Ivory Tower

Merkel still does not see herself as the primary catalyst for this mess. It was her asinine immigration policy that fueled these protests.

Let in millions of people who cannot speak German, have no skills, and who cite religion as giving the a right to attack women, and what the hell do you think would happen?

Merkel, in her ivory tower, calls for “compassion” for the East Germans. That smacks of blaming them.

Merkel talks of “solving the problem”. She should look in the mirror. She is the problem.

It’s no wonder AfD is rising in the polls.

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This Fascinating World Map Was Drawn Based On Country Populations

It’s likely you’re very familiar with the standard world map.

It’s shown practically everywhere – you’ll see it online, on the news, in books, and even as a part of company logos. In fact, the world map is so ubiquitous that we don’t even really think about it much at all, really.

But, as Visual Capitalist’s Jeff Desjardins notes, the economist Max Roser from Our World in Data argues that this familiarity with the world map may lead to complacency in understanding global matters. After all, the typical world map shows us the basic geography of countries and continents, but it doesn’t give any indication of where people actually live!

INTRODUCING: THE CARTOGRAM

To get around the challenges of relying on the standard world map, Roser instead has made a population cartogram based on 2018 population figures.

What’s a population cartogram?

A cartogram is a visualization in which statistical information is shown in diagrammatic form. In this case, it’s a population cartogram, where each square in the map represents 500,000 people in a country’s population.

In total there are 15,266 squares, representing all 7.633 billion people on the planet.

(View this giant map in full resolution to see details )

Courtesy of: Visual Capitalist

Countries like Canada or Russia – which have giant land masses but small relative populations – appear much smaller on this kind of map. Meanwhile, a country like Bangladesh grows much bigger, because it has a large population living within a smaller area.

THE REGIONAL VIEW

Let’s zoom in on some continental regions to get a sense of what we can learn from a population cartogram done in this fashion.

Asia and Oceania
Where did Australia go? The continent is completely dwarfed by neighboring Indonesia and the Philippines.

Not surprisingly, India and China are the biggest countries on this cartogram, especially looking oversized in comparison to countries in the Middle East like Saudi Arabia, Afghanistan, or the United Arab Emirates.

Europe
Geographically, Russia is a pretty massive country – but when resized based on population, the nation looks closer in size to many other European nations.

The Netherlands and Belgium, two countries with higher population densities than most European nations, also appear more prominent on this style of map.

The Americas
On the map below, Mexico has exploded to almost 4X the size of Canada. That’s because although the Great White North is the world’s second largest country in size, it only has a fraction of the population of Mexico.

Meanwhile, it’s evident that Argentina’s population is lower than the country’s giant landmass leads on.

Africa
Finally, we’ll look at Africa, which is in the middle of a massive population boom.

Countries like Namibia, Botswana, and Chad almost disappear.

Nigeria, which is expected to have the world’s largest city by 2100 with over 88 million residents, is the largest country in Africa using this cartogram method.

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EU: Politicizing The Internet

Authored by Judith Bergman via The Gatestone Institute,

  • Even before such EU-wide legislation, similar ostensible “anti-terror legislation” in France, for example, is being used as a political tool against political opponents and to limit unwanted free speech.

  • In France, simply spreading information about ISIS atrocities is now considered “incitement to terrorism”. It is this kind of legislation, it seems, that the European Commission now wishes to impose on all of the European Union.

  • Social media giants — Facebook, Twitter, YouTube, Microsoft, Google+ and Instagram — act as voluntary censors on behalf of the European Union.

  • The European Commission states that it is specifically interested in funding projects that focus on the “development of technology and innovative web tools preventing and countering illegal hate speech online and supporting data collection”, and studies that analyze “the spread of racist and xenophobic hate speech in different Member States…”

The European Union seems fixated, at least for the internet, on killing free speech. And social media giants — Facebook, Twitter, YouTube, Microsoft, Google+ and Instagram — act as voluntary censors on behalf of the EU. (Image source: iStock)

In March, the European Commission — the unelected executive branch of the European Union — told social media companies to remove illegal online terrorist content within an hour — or risk facing EU-wide legislation on the topic. This ultimatum was part of a new set of recommendations that applies to all forms of supposedly “illegal content” online. This content ranges “from terrorist content, incitement to hatred and violence, child sexual abuse material, counterfeit products and copyright infringement.”

While the one-hour ultimatum was ostensibly only about terrorist content, the following is how the European Commission presented the new recommendations at the time:

“… The Commission has taken a number of actions to protect Europeans online – be it from terrorist content, illegal hate speech or fake news… we are continuously looking into ways we can improve our fight against illegal content online. Illegal content means any information which is not in compliance with Union law or the law of a Member State, such as content inciting people to terrorism, racist or xenophobic, illegal hate speech, child sexual exploitation… What is illegal offline is also illegal online”.

“Illegal hate speech”, is then broadly defined by the European Commission as “incitement to violence or hatred directed against a group of persons or a member of such a group defined by reference to race, colour, religion, descent or national or ethnic origin”.

The EU has now decided that these “voluntary efforts” to remove terrorist content within an hour on the part of the social media giants are not enough: that legislation must be introduced. According to the European Commission’s recent press release:

“The Commission has already been working on a voluntary basis with a number of key stakeholders – including online platforms, Member States and Europol – under the EU Internet Forum in order to limit the presence of terrorist content online. In March, the Commission recommended a number of actions to be taken by companies and Member States to further step up this work. Whilst these efforts have brought positive results, overall progress has not been sufficient”.

According to the press release, the new rules will include draconian fines issued to internet companies who fail to live up to the new legislation:

“Member States will have to put in place effective, proportionate and dissuasive penalties for not complying with orders to remove online terrorist content. In the event of systematic failures to remove such content following removal orders, a service provider could face financial penalties of up to 4% of its global turnover for the last business year”.

Such astronomical penalties are likely to ensure that no internet company will run any risks and will therefore self-censor material “just in case”.

According to the European Commission press release, the rules will require that service providers “take proactive measures – such as the use of new tools – to better protect their platforms and their users from terrorist abuse”. The rules will also require increased cooperation between hosting service providers, and Europol and Member States, with the stipulation that Member states “designate points of contact reachable 24/7 to facilitate the follow up to removal orders and referrals”, as well as the establishment of:

“…effective complaint mechanisms that all service providers will have to put in place. Where content has been removed unjustifiably, the service provider will be required to reinstate it as soon as possible. Effective judicial remedies will also be provided by national authorities and platforms and content providers will have the right to challenge a removal order. For platforms making use of automated detection tools, human oversight and verification should be in place to prevent erroneous removals”.

It is hard to see why anyone would believe that there will be effective judicial remedies and that erroneously removed content will be reinstated. Even before such EU-wide legislation, similar ostensible “anti-terror legislation” in France, for example, is being used as a political tool against political opponents and to limit unwanted free speech. Marine Le Pen, leader of France’s Front National, was charged earlier this year for tweeting images in 2015 of ISIS atrocities, includingthe beheading of American journalist James Foley and a photo of a man being burned by ISIS in a cage. She faces charges of circulating “violent messages that incite terrorism or pornography or seriously harm human dignity”, and that can be viewed by a minor. The purported crime is punishable by up to three years in prison and a fine of €75,000 ($88,000). Le Pen posted the pictures a few weeks after the Paris terror attacks in November 2015, in which 130 people were killed, and the text she wrote to accompany the images was “Daesh is this!” In France, then, simply spreading information about ISIS atrocities is now considered “incitement to terrorism”. It is this kind of legislation, it seems, that the European Commission now wishes to impose on all of the EU.

The decision to enact legislation in this area was taken at the June 2018 European Council meeting – a gathering of all the EU’s heads of state – in which the Council welcomed “the intention of the Commission to present a legislative proposal to improve the detection and removal of content that incites hatred and to commit terrorist acts”. It sounds, however, as if the EU is planning to legislate about a lot more than just “terrorism”.

In May 2016, the European Commission and Facebook, Twitter, YouTube, and Microsoft, agreed on a “Code of Conduct on countering illegal online hate speech online” (Google+ and Instagram also joined the Code of Conduct in January 2018). The Code of Conduct commits the social media companies to review and remove, within 24 hours, content that is deemed to be “illegal hate speech”. According to the Code of Conduct, when companies receive a request to remove content, they must “assess the request against their rules and community guidelines and, where applicable, national laws on combating racism and xenophobia…” In other words, the social media giants act as voluntary censors on behalf of the European Union.

The European Council’s welcoming of a legislative proposal from the European Commission on “improving the detection and removal of content that incites hatred” certainly sounds as if the EU plans to put the Code of Conduct into legislation, as well.

At the EU Salzburg Informal Summit in September, EU member states agreed to, “step up the fight against all forms of cyber crime, manipulations and disinformation”. Heads of member states were furthermore invited, “to discuss what they expect from the Union when it comes to… preventing the dissemination of terrorist content online” and “striking the right balance between effectively combating disinformation and illegal cyber activities and safeguarding fundamental rights such as the freedom of expression”.

At the same time, however, the European Commission, under its Research and Innovation Program, has a call out for research proposals on how “to monitor, prevent and counter hate speech online,” with a submission deadline in October.

In the call for proposals, the Commission says that it is “committed to curb the trends of online hate speech in Europe” and underlines that “proposals building on the activities relating to the implementation of the Code of Conduct on countering hate speech online are of particular interest”.

The Commission states that it is specifically interested in funding projects that focus on the, “development of technology and innovative web tools preventing and countering illegal hate speech online and supporting data collection”; studies that analyze “the spread of racist and xenophobic hate speech in different Member States, including the source and structures of groups generating and spreading such content…”; and projects that develop and disseminate “online narratives promoting EU values, tolerance and respect to EU fundamental rights and fact checking activities enhancing critical thinking and awareness about accuracy of information” as well as activities “aimed at training stakeholders on EU and national legal framework criminalising hate speech online”. One just wonders which member states and what “hate speech” will be held accountable — and which not.

The EU seems fixated, at least for the internet, on killing free speech.

*  *  *

The European Commission writes in its call that it would like the funded projects to have the following results:

  • Curbing increasing trends of illegal hate speech on the Internet and contributing to better understanding how social media is used to recruit followers to the hate speech narrative and ideas;

  • Improving data recording and establishment of trends, including on the chilling effects of illegal hate speech online, including when addressed to key democracy players, such as journalists;

  • Strengthening cooperation between national authorities, civil society organisations and Internet companies, in the area of preventing and countering hate speech online;

  • Empowering civil society organisations and grass-root movements in their activities countering hate speech online and in the development of effective counter-narratives;

  • Increasing awareness and media literacy of the general public on racist and xenophobic online hate speech and boosting public perception of the issue.

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Iran Launches Ballistic Missiles Into Syria Against Terror Camps East Of Euphrates

It’s a huge development in an extremely volatile environment: overnight Sunday Iran launched multiple ballistic missiles toward Syria against targets east of the Euphrates river

Footage released through official state channels show missiles launched by Iran from its Kermanshah region in western Iran towards Syria, targeting ISIS positions east of the Euphrates in revenge for the September 22 attack on a military parade in Ahvaz, which killed 25 and injured scores more. 

However, the United States will no doubt interpret the action as highly provocative as the US Army maintains bases precisely in the broad region targeted east of the Euphrates in Syria

In the early morning hours of Monday (local time) Iran’s elite Islamic Revolutionary Guard Corps (IRGC) published an official statement saying that its Aerospace Division targeted the “headquarters of the terrorists” east of the Euphrates in Syria.

A photo set showing a series of near simultaneous surface-to-surface launches was published alongside the statement. 

Videos of the launch were uploaded and circulated widely in Middle East social media. Early unconfirmed reports and video suggest that a total of eight missiles were fired; however, at least two appear to have crashed shortly after launch. 

“The headquarters of those responsible for the terrorist crime in Ahvaz was attacked a few minutes ago east of the Euphrates by several ballistic missiles fired by the aerospace branch of the Guardians of the Revolution,” the IRGC said on their official Sepah website.

The launch comes soon after Iranian President Hassan Rouhani called the United States a “sponsor” of those that funded the terrorist attack on Avhaz in southwest Iran — one of the deadliest in Iran’s recent history. The IRGC also vowed “a crushing and devastating response” during last Friday prayers in Tehran. 

A second video of the launch has been released by the Democratic Party of Iranian Kurdistan (PDKI) official channels:

Washington has denied any involvement in the Avhaz attack, which was immediately claimed by both a local Avhaz separatist group and official ISIS media channels. 

But Iran’s Foreign Minister Mohammad Javad Zarif said in the aftermath that “US masters” and regional terrorist forces should be held accountable for the bloodshed

Iran’s top cleric and supreme leader Ayatollah Khamenei also pointed the finger at the West, condemning what he labelled “plots hatched by US stooges in the region.”

Hours after the highly provocative launch into Syria, it is unclear whether any among the missiles impacted inside Syria, and Syrian state sources have yet to issue a report or confirmation of the strike

Iran’s official English language PressTV claimed the following, however, citing the IRGC:

According to the statement, the strike took place in early Monday by the IRGC’s Aerospace Division, killing and injuring a large number of Takfiri terrorists and ringleaders of the September 22 attack.

While there’s yet to be any confirmation of these claims of casualties on the ground,  video quickly surfaced purporting to show two of the locations where missiles crashed early after the launch.


At least one Iranian state TV report suggested the missiles flew over central Iraq near the city of Tikrit and landed in the vicinity of Abu Kamal, in southeast Syria.

Iranian state news sources promoted images and graphics purporting to show the flight path throughout the morning in a clear signal to regional enemies Saudi Arabia and the UAE, as well as the United States and Israel. 

developing…

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China’s Bond Market Cracks: 2018 Will Be A Record Year For Onshore Bond Defaults

Back in June, we asked if it was time to “start worrying about China’s debt default avalanche” when we reported that according to research firm Rhodium Group LLC, there have already been least 14 corporate bond defaults in China in 2018, a shockingly high number for a country which until recently had never seen a single corporate bankruptcy, and a number which is set to increase as Chinese banks pull pull back from lending to other firms that use the funds to buy bonds, exacerbating the pressure on the market.

As we discussed last year, as part of Beijing’s crackdown on China’s $10 trillion shadow banking sector, strains had spread from high-yield trust products to corporate bonds as the lack of shadow funding has choked off refinancing for weaker borrowers. Separately, Banks’ lending to other financial firms, a common route for funds and securities brokers to add leverage for corporate bond investments, has continued to decline since reaching a peak at the start of 2018, and is now down to the lowest level since late 2016.

The deleveraging campaign is also depressing bond demand: “Unlike the U.S., where the majority of buyers of bonds are mutual funds, individuals and investment companies, in China, the key holders of bonds are bank on-and off-balance sheet positions,” said UBS analyst Jason Bedford, who noted that Chinese banks are buying far fewer bonds as a result.

There is another reason why the traditional bond buyers have been missing from the market: according to a new report from Goldman, the threats to the Chinese bond market continue to rise with 2018 shaping up as a record year for onshore bond defaults.

According to Goldman’s calculations, just in August and September of this year, there had been no less than 8 new defaults, a troubling trend “despite the introduction of a number of policy loosening measures in early July.” This compares to only 11 new defaults between January and July (per Goldman’s definition) this year, with all the recent defaults coming from privately owned enterprises:

  • Neoglory Holding Group – A conglomerate from the Zhejiang province. On Sept. 25, the company failed to fully repay the principal payment on a RMB 1bn commercial paper and the put payment on a RMB 2bn corporate bond. According to Wind, the company has RMB 12.8bn of domestic bonds outstanding. 

  • Jilin Liyuan Precision Manufacturing – The company is listed on the Shenzhen stock exchange and is a manufacturer of aluminum products, based in Jilin province. The company was unable to make the interest payment on its RMB 740mn corporate bond on Sept. 25. This is the company’s only bond outstanding. 

  • Gangtai Group – A conglomerate from Shanghai, the company was unable to meet the put payment on a RMB 500mn corporate bond. According to Wind, the company has RMB 2bn of domestic bonds outstanding. They also have a USD 100mn offshore bond that was issued in March this year and matures in Sept. 2019.

The recent cluster of defaults has brought the number of new defaults this year to 19, surpassing the previous full year record of 18 defaults recorded in 2016. In terms of the notional amount of bonds that defaulted, it has reached RMB 91.4bn, equivalent to 0.5% of corporate bonds outstanding at the start of 2018, and 69.6% higher than the RMB 53.9bn recorded for all of 2016. Therefore 2018 will be a record year for China onshore bond defaults, both in terms of the number of new defaults and the notional amount of bonds outstanding, as the following Goldman chart shows.

It could have been worse: according to Bloomberg, Qinghai Provincial Investment Group (“Qinghai Provincial”) was able to wire funds to meet the principal and interest payments on its $300MM bond due on Sept. 26. This is notable because the last minute repayment meant that a first bond default by a China Local Government Financing Vehicle was averted, as there had been uncertainties as to whether the company had sufficient funds to make the payments, as reported by Bloomberg. That said, the day of reckoning may have only been delayed for now: the company has $1.15BN of USD bonds still outstanding, of which $300MM are coming due on Dec. 11 this year. As such there is potential refinancing risks for the company going forward, and will need to be closely watched.

In any case, despite the good news on the LGFV front, sentiment is likely to stay mixed as credit differentiation gathers pace. To Goldman, Chinese credit investors remain cautious due to a number of reasons, the most important of which are the lingering concerns on defaults. Meanwhile, Chinese policymakers remain determined to push through financial sector reforms, including continuing efforts to rein in shadow banking activities, and the rise in defaults over the past two months is reflective of that. As such, sentiment is likely to stay mixed, and we expect defaults to continue and there to be further credit differentiation – a trend that has been occurring over recent months given the selloff in riskier credits and the outperformance of higher-rated names.

There is another potential risk: Chinese companies face 2.7 trillion yuan in bond maturities in the onshore and offshore market in the second half of this year, and together with another 3.3 trillion yuan of trust products set to mature in the second half, the funding problems will likely get worse, as already more than eight high-yield trust products have delayed payments so far this year.

To be sure, Beijing will do everything in its power to avoid a default waterfall, but another emerging – pardon the pun – risk is that as negative sentiment towards Chinese corporates grows, it could become the next headwind for EM debt, even as the crises in Argentina, Brazil and Turkey appear to have settled for the time being, resulting in another significant capital outflow from Emerging Markets, and even more pained complaints from EM central bankers begging the Fed to halt its tightening, or else.

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Is Erik Prince Pointing The Way Out Of Afghanistan?

Authored by James Durso via RealClearDefense.com,

The tab to date: over $840 billion for military operations, $126 billion for reconstruction, probably another $1 trillion for veterans’ health care, over 2,400 dead, and over 20,000 wounded.

In August, U.S. Defense Secretary James Mattis kiboshed Erik Prince’s plan to privatize the war in Afghanistan which Prince called “an expensive disaster for America.” But with Mattis’s  tenure in doubt, we may not have seen the last of the Prince plan, which is forthrightly titled “An Exit Strategy for Afghanistan.”

U.S. forces arrived in Afghanistan two weeks after the 9/11 attacks in New York and Washington, D.C. and are still there seventeen years later. The tab to date: over $840 billion for military operations, $126 billion for reconstruction, probably another $1 trillion for veterans’ health care, over 2,400 dead, and over 20,000 wounded. The annual cost is $50 billion, more than the defense budget of the U.K.

Despite the cost in dollars and lives, there hasn’t been much progress. The Afghan central government controls or influences under 60% of the country and “opium production in Afghanistan increased by 87 percent to a record level of 9,000 metric tons in 2017 compared with 2016 levels” according to the latest report by the UN Office on Drugs and Crime.

President Trump was channeling many Americans when he asked his national security advisor, “What the f**k are we doing there?” Though Trump didn’t promise to leave Afghanistan during the campaign, his advisors, some of them mired in the conflict for the past two decades, convinced him to authorize an additional 4000 troops for training and counter-terrorism missions.

In parallel with the troop increase, the administration slashed assistance to Pakistan, the state sponsor of the Taliban. This won’t change Pakistan’s behavior in Afghanistan, but at least America won’t be insulting itself by funding its enemy.

U.S. diplomats have started direct talks with the Taliban while reiterating that the end to the conflict will only come through an intra-Afghan settlement. At the same time, Uzbekistan’s diplomats hosted talks with Taliban representatives as part of Tashkent’s initiative to include Afghanistan in Central Asia, and to give the Taliban an interlocuter other than Pakistan.

Trump’s pro-intervention advisors probably want to block him from deciding to withdraw and upsetting the Afghan presidential election on 20 April 2019 (parliamentary elections are on 20 October 2018), and to give the new NATO commander time to make progress (known as “calendar creep”). But Afghan President Ashraf Ghani’s opponents in the Coalition for the Salvation of Afghanistan may hand Trump an opportunity to break out.

The Coalition, an assembly of the minority Tajiks, Uzbeks, and Hazara, with Pashtun leadership, will be a serious challenge to Ghani in the April 2019 election, but it may try to invalidate the October 2018 parliamentary election and call a traditional Loya Jirga to unseat Ghani. If the Coalition uses the extra-legal Loya Jirga to oust Ghani, Trump has the justification he needs to go to the American people with his decision to quit and cut America’s considerable losses, especially if he is bolstered by a pessimistic National Intelligence Estimate.

So now comes Erik Prince, the man everyone loves to hate, with a plan to privatize and streamline the tasks now being performed by about 14,000 American and 8,000 NATO troops and over 26,000 contractors. Prince earned his notoriety in Iraq when his security company, Blackwater Worldwide, was involved in a shooting incident at Baghdad’s Nisour Square that left seventeen innocent bystanders dead and caused Blackwater’s expulsion from the country. Prince, in his defense, claims he never lost a client which, if you were protected by his teams, is probably the most significant criterion.  

Prince proposes to replace the NATO forces and their support contractors with 6,000 contractors, all special operations veterans, and 2,000 U.S. special operations troops, who will provide QA for the contractors, and unilateral direct-action capability. The mentor-contractors will stay with their assigned Afghan National Army battalions for a minimum of three years. 2,000  contractors will operate aircraft for medical evacuation and close air support and will staff two western-style combat surgical hospitals that would also treat wounded Afghan soldiers. The contractors and U.S. forces would be subject to the Uniform Code of Military Justice and Afghan law, and contractor medical care would be provided by Defense Base Act insurance, which is current practice for contingency contracts.

The plan includes a governance support unit that will provide logistics to the force and, very importantly, prevent payment to Afghanistan’s “ghost soldiers” and the skimming of soldiers’ pay by their commanders, perennial corruption problems in Afghanistan’s military.

The most remarked upon feature of the plan was Prince’s suggestion that the effort be led by a “viceroy” who would answer directly to the President and command all military, diplomatic, and intelligence assets in Afghanistan. This is known as “unity of command,” and has never existed in America’s long project in Afghanistan. That person would need experience with the military and intelligence agencies, but no candidate may satisfy all the bureaucracies so the President (and Congress) will have to back it up by giving the viceroy hire-and-fire authority and control of the budgets.  

Another noted feature was contracting the effort under Title 50 of the United States Code which is the authority for the security services, such as the Central Intelligence Agency, but also for most military operations. This may expedite the contract award process, but particular attention will be required for “contract administration,” that is, ensuring the vendor completes the terms and conditions of the contract. As the military, the diplomats, and the reconstruction officials have been unable to define “success” in Afghanistan, the contracting officer and the vendor may be left to their own devices.   

And using contractors has one big benefit for a government: their deaths are pretty much off the radar, especially if they aren’t American (and a share of Prince’s force will be non-American). The media reports the death of every deployed military member, even if he dies in a vehicle accident on base, but dead contractors go unnoticed. 257 American contractors died in Iraq from 2003 to 2011 but received far less attention than the soldiers they supported.      

The opportunity to mine Afghanistan’s trove of rare earth elements was highlighted in Prince’s plan which immediately drew accusations of plunder. Yes, there is wealth to be had: Russian, British, and American geologists have found that Afghanistan has enormous untapped mineral resources, possibly valued at $3 trillion. The minerals are there, but there’s no way to mine them, so they’re effectively worthless. And there’s no way to get them out because the country is violent and corrupt which scares away investors. Outsourcing may be the last chance to recover Afghanistan’s mineral wealth for its people. It will also chip away at China’s control of a significant share of the world’s rare earths.

Moreover, Afghanistan’s government has some concerns the U.S. must address:

  1. Is the plan legal under international law?

  2. Will using foreign contractors encourage local warlords to circumvent the newly-formed democratic institutions in the country?

  3. Who will be accountable for the success or failure of outsourcing a military campaign? How will the government of Afghanistan provide oversight of military operations on its territory?

  4. Will outsourcing be seen as a for-profit corporation taking control of the conflict and selling war as a product, dooming prospects for peace and reconciliation in the country?

  5. The regional powers, China and Russia, and the active neighbors such as Pakistan and Uzbekistan, may stop their support to the peace process if they interpret outsourcing as indicative of the waning interest by the U.S.

Criticism of Prince’s plan runs up against the ticking clock that is close to chiming “20 years” so   Trump may soon run out of patience and present Kabul (and U.S. officials) with a “take it or leave it” proposal. There’s no voting constituency in the U.S. for continued loitering in Afghanistan and Trump won’t lose any votes in 2020 if he says he gave it his best shot but getting out now is best for America. Secretary Mattis is concerned that outsourcing may make NATO allies jump ship, but how many American lives and dollars should we pay for Latvia’s thirty-seven troops?

Detractors of a new approach may say the sacrifice of our GIs will be dishonored by resorting to “mercenaries,” but the sunk cost of the dollars, dead, and wounded shouldn’t stop us from examining alternatives after 17 years fighting a war we are “not winning according to  Secretary Mattis.  

Prince has suggested a “test drive” of his proposal which would see contractor deployments to Nangarhar and Helmand provinces. Nangarhar is an egress route to and from safe havens in Pakistani, and Helmand is the Taliban’s financial center of gravity where one-third of the arable land is used for poppy cultivation. That would give the U.S. some interesting lessons learned whatever the outcome but, given internal resistance in the U.S. government, it will require an impartial evaluator who will also consider Afghan concerns.

Another test drive option was suggested by Gary Anderson, a former reconstruction advisor in Iraq and Afghanistan: “the provision of construction security for the Ring Road in the remote northwestern region.” The Ring Road would like it possible to travel from the western city of Herat, which borders Iran and Turkmenistan, to Mazar e-Sharif in the north of the country and close to Uzbekistan. It would spur economic activity, increase access to education, and allow Kabul to extend its writ to the far north and west of the country, and thus be more consequential to “winning” than killing another bunch of Taliban. It would also mute “plunder” allegations and encourage Afghanistan’s Central Asia neighbors to continue their effort to integrate the country into the region.

Erik Prince’s plan gives the U.S. the opportunity to try a new strategy in Afghanistan instead of spending another year while yet another new NATO commander get acquainted with his job. It may prompt Washington to consider three options: Prince’s original plan, Anderson’s infrastructure-focused plan, or the “decent interval” option, providing mentoring and training to the Afghan army so, if worse comes to worst, the U.S. will be several years removed from a Taliban takeover.

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Chinese Manufacturing Growth Grinds To A Halt As Exports Tumble

Two weeks after the latest economic data dump from China showed a continued slowdown in the local economy, the latest PMI surveys confirmed that the weakness in China’s manufacturing sector was accelerating.

According to the official NBS manufacturing PMI which was released on Sunday, sentiment dropped further in September, despite what has been a mild upward seasonal bias in recent years. All sub-indexes showed weaker growth momentum. The Caixin manufacturing PMI also declined in September, reflecting the nation’s economic slowdown and fallout from the trade war with the U.S. The NBS non-manufacturing PMI was stronger, however, due entirely to a surge in the construction PMI.

China’s NBS manufacturing PMI fell to 50.8 in September, from 51.3 in August and below the Bloomberg consensus of 51.2. While this was the first September drop since the NBS manufacturing PMI series was released, it was also the 26th consecutive month of prints above the 50-point mark that separates growth from contraction.

Looking at the components, all the major sub-indexes showed weaker growth momentum in September. The production sub-index moderated 0.3pp to 53.0 and the new order sub-index was 0.2pp lower at 52.0. Trade indicators softened as well—the new export order sub-index fell to 48.0 from 49.4, and the imports sub-index declined 0.6pp to 48.5. Both indexes were at the weakest levels since February 2016. The employment sub-index fell 1.1pp to 48.3, and the suppliers’ delivery times sub-index rose 0.1pp to 49.7 (higher suppliers’ delivery times imply weaker demand conditions). The raw material inventories index was 0.3pp lower, and the finished goods inventory index was unchanged vs August. Inflationary pressures increased mainly at the input level – the input price index rose 1.1pp to 59.8, and the output prices index was unchanged at 54.3.

Separately, the Caixin manufacturing PMI – which better reflects sentiment among smaller, private firms – declined to 50 from 50.6, the lowest since May 2017 and ending 15 months of expansion, with export orders falling the fastest in over two years as U.S. tariffs are starting to take a toll on the economy.

The output sub-index fell 1.4pp to 51.1, and the new orders sub-index was 50.1, 0.5pp lower the August. Similar to the NBS manufacturing survey, new export order index in the Caixin manufacturing survey softened in September, with companies citing “the China-US trade war and subsequent tariffs” as contributing factors according to the Caixin survey.

“The further slowdown in China’s official manufacturing PMI in September reflects the intensifying impact of the U.S.-China trade war on China’s manufacturing export sector,” said IHS Markit APAC chief economist Rajiv Biswas. “The near-term outlook for the Chinese manufacturing export sector remains weak, albeit the Chinese government may apply some further stimulus measures to support growth.”

It was not all gloom, however: the official non-manufacturing PMI picked up to 54.9, signaling that domestic demand for services and construction remains strong enough to mitigate some of the external headwinds that the economy is facing, largely the result of the bubble housing sector. While the services PMI reading was the same as August at 53.4, the construction PMI spiked to 63.4, 4.4pp higher from August (which might reflect the unwinding of previous drag from adverse weather conditions). That construction uptick, if sustained, could be a sign that the measures aimed at boosting infrastructure investment are starting to kick in.

According to Goldman’s Maggie Wei, the decline in the manufacturing PMI surveys “indicates that growth faced increased downward pressures in the manufacturing sector, driven by weaker export growth, possibly due to a combination of slower global demand and increased trade tensions, has possibly weighed on activity growth in the manufacturing sector.”

Goldman’s assessment is that as a result, “more policy easing measures (such as targeted RRR cuts as discussed in the recent state council meeting) could be announced in the near future to help buffer growth downside.”

Others agreed: “the government’s support policy will start to have an impact in the fourth quarter, which could offset the damage of the trade war,” said Gao Yuwei, a researcher at Bank of China. “The efforts to shore up infrastructure investment has been driving up construction activity, and services industries normally perform better in the third and fourth quarter.”

As Bloomberg notes, officials have promised fiscal stimulus in the form of tax cuts and infrastructure spending to buffer the domestic economy somewhat from the effects of the trade dispute. Analysts also expect China’s central bank will continue topping up liquidity in the financial system to support economic growth.

And while there are pockets of strength, primarily within construction, whatever stimulus China has injected has yet to reach the broader economy.

While private companies fared worse than state-owned enterprises, discrepancies in that data suggest that the picture for Chinese manufacturers may be worse than officially-reported growth rates show, according to Bloomberg.

More ominously, the official PMI report also indicates rising unemployment in the manufacturing sector, with CIC Corp’s Wenqi Liu writing that she will “continue to closely watch infrastructure and property investment growth, as they might lead the cyclical stabilization.”

For now, however, the attention of China’s manufacturing sector remains squarely focused on the growing danger of escalating trade war with the US, and as long as there is little hope of a solution, sentiment will continue to deteriorate.

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Californians Will Finally Get Access to Records About Police Misconduct

Gov. Jerry BrownFor decades, California has kept police misconduct records exempt from public records requests, denying citizens (and even prosecutors and defense attorneys in court cases) easy access to information about law enforcement behavior.

Now that secrecy is coming to an end. This afternoon Gov. Jerry Brown signed into law S.B. 1421, sponsored by state Sen. Nancy Skinner (D–Berkeley). S.B. 1421 changes the rules to call for the release of police conduct (and misconduct) records in certain situations: if the officer discharged his or her gun in an incident; if the officer was involved in an incident that led to death or great bodily injury; if the officer had been found to have engaged in sexual assault with a member of the public (this includes any sexual act while on duty); and if the officer had been found to have engaged in dishonest practices, such as committing perjury, falsifying reports, or destroying or concealing evidence.

Today was the last day for Brown to sign or veto bills passed during the 2018 legislative season. He had been keeping mum about whether he’d sign on to this reform. He was responsible for signing the original bill back in 1978 that exempted police conduct reports from public view. What spooled out from that initial bill was an environment where citizens simply were not able to find out if an officer involved in a violent or otherwise controversial confrontation had a history of disciplinary problems. Even prosecutors and defense attorneys had to beg judges for information from the conduct records of officers put on the stand as witnesses.

This legislation represents a huge shift in the relationship between law enforcement agencies and the public in California. Police unions have fought for years to keep officers’ bad conduct out of the public eye. They’ve been succeeding for a long time. This change will bolster pushes for transparency in other states (such as New York) that similarly conceal bad cop behavior from the public.

But there’s more! Brown also signed A.B. 748, which will establish that police body camera footage is a public record under state law. As body cameras began to be implemented across the state, there wasn’t an official state policy determining to what extent the public would be allowed to see the footage. So law enforcement agencies were making their own rules, and as you might expect, they typically decided to conceal what they had.

A.B. 748 will allow police to withhold body camera footage for 45 days if there’s an ongoing investigation, and it puts a process into place to keep footage sealed longer if there is a good reason. It also puts guidelines into place to redact or edit footage that could violate the privacy of witnesses or victims. But the assumption now is going to be that all police body camera footage will eventually become public records.

Peter Bibring, director of police practices for the ACLU of California, shot out a celebratory statement this evening:

Together, SB 1421 and AB 748 will shine a much-needed light on police violence and abuse. Specifically, SB 1421 restores the public’s right to know how departments investigate and hold accountable those officers who abuse their power to frame, sexually assault, or kill members of the public. AB 748 will ensure law enforcement agencies throughout the state release police recordings of serious uses of force, including body camera footage, which are valuable tools for civilian oversight at a time of growing concern with police violence.

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