ATMs Open to Hacking

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Computer programs are obsolete before they even get put on the market and it’s been that way for years now. There’s also the added bonus of actually making sure that the buyers keep buying and always want the latest. Obsolescence has been part of our lives ever since we went digital, hasn’t it? Perhaps even before then. But, back then, things lasted longer than they do today. Or is that just the old folk that reminisce about the past and how good it actually was? Well maybe we will all be harking back to a better time in the next few weeks when Microsoft pulls the plug on the updates to banks’ ATMs around the world.

Most bank machines (95% of ATMs I the world) use Microsoft XP (OS) in their cash machines, wherever you are in the world. On April 8th 2014, Microsoft will no longer be providing those updates, leaving your and my ATM at the bank far more vulnerable than it was in the past. The software was originally installed in 2001.

But, that was when the banks had a lot of money to waste. Since the financial crisis, those updates have been thrown to the wayside. The banks are poor, so we are told. Although, it can’t be true when only in February it was announced that the USA’s six biggest banks ((JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) had all made more profit in 2013 than compared to prior to the financial crisis. Net income for the six rose by 21% and reached $74.1 billion. That was all thanks to the rise in the stock market, due to false hopes from the Federal Reserve and virtual booming of the economy. In 2006, when the housing bubble was raking in more money than ever before (right at the peak before it burst), those six earned $84.6 billion and that’s the last time those six earned more profits than for 2013. JPMorgan Chase, for example, is expected to make $23 billion in profit alone this year. Wells Fargo is expected to see an increase in profit for the fifth year in a row, hitting $21 billion in 2014.

But, ok, let’s surmise that the banks don’t have enough money to pay for the update in the software. Or they have had enough of being just another cash cow to Microsoft and they don’t want tugging on their udders and getting milked for a new software program.

There’s only one problem with that and that’s the fact that the software is like a firewall to your computer and will stop cyber-attacks (or at least, slow them down).

Apparently, the banks in the world have agreed to update to a different operating system at some undefined time in the future. Apparently, the banks may not be aware that in the meantime, while the old operating system is no longer being updated and when the brand spanking new (and thus very expensive) software program comes into operation, there will be an open door for cyber-attacks on ATMs.

Two thirds of banks in the world will not be upgrading to a newer operating system by the deadline of April 8th. Why would the two thirds worry? Simply because that means that customers’ bank details and accounts will be accessible.

You can bet your bottom dollar that you will be taking from that ATM down the block that it will be costing the account holder more and more. If banks upgrade or request support from Microsoft, it has been suggested that it will cost millions (passed on to the account holder).

20% of ATMs in the world are in the USA. There are some 2.2 million worldwide with most running on the Microsoft XP OS. Plus, as anyone knows, change the software and the hardware will stop running and that means banks will also be replacing them in coming months and years. More money that the banking sector will have to find in its apparent poverty-stricken state and that it will be more than likely to pass on to the account holder again.

ATM? Another Trick by Microsoft (…along with the banks).

Originally posted: ATMs Open to Hacking

 


    



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The Dominoes Begin To Fall In China

Submitted by Tim Staermose of Sovereign Man blog,

Forget tapering. Forget Ukraine. The largest single risk to the world economy and financial markets right now is China.

What’s going on in China reminds me a lot of what I witnessed firsthand when I lived in South Korea in the 1990s, before that economy’s crash in 1998.

Just as China now, South Korea was an immature, state-controlled financial system funneling cheap money to well-connected and politically favored large enterprises.

Fuelled by a steady diet of cheap money, these companies kept adding capacity with no regard to profitability or return on capital. They simply focused on producing more stuff and expanding their size. They employed more people, and everyone was happy.

But, all the while, they were borrowing more and more money, until eventually they collapsed under the debt load when liquidity dried up.

Before Korea, the exact same thing happened in Japan, and a giant, unsustainable debt binge brought the “miracle economy” to its knees.

But the Korean and Japanese debt bubbles are nothing compared to what we see in China today.

Consider this: in the last five years, the Chinese created $16 TRILLION in credit that is now circulating in the economy… financing ghost cities and useless infrastructure projects.

Floor space per capita in China is now 30 square meters (about 320 sq. ft.) per person. Japan was at that level in 1988. And the economy burst the following year.

More astounding, this $16 trillion in credit is DOUBLE the $8 trillion in credit that China created in the previous 5,000+ years of its existence.

The Chinese government recognizes it has a problem. It realizes it can no longer keep the dam from breaking. And in the past week, it bit the bullet.

In the last two weeks, Chaori Solar and Haixin Steel were allowed to default, i.e. they weren’t bailed out.

This is the first time in China’s modern history they’ve had a default, let alone two. They can no longer keep the game up, and the dominoes are beginning to topple.

I cannot stress this enough. What we’re witnessing is a major paradigm shift.

Of course, the Chinese government claims they can control the impact of these “relatively minor” corporate defaults.

But as we saw during the sub-prime crisis in the Unites States, the complex web of inter-linkages in the financial system means they are playing with fire.

I expect many more defaults in China in the coming weeks and months. I expect some important Chinese financial institutions to get into trouble.

And I expect the Chinese government will completely lose control over the situation.

My recommendations are 2-fold:

1. If you have any exposure to Chinese stocks, or the Chinese Yuan, I strongly suggest you reconsider.

2. If you have investments in iron ore or copper producers, get out.

But it’s not all doom and gloom. It’s going to take time for China to suffer through this crisis. But, if the Chinese government lets the dominoes fall where they may, the country will be better off in the long term.

The lessons from markets such as South Korea and Indonesia, in aftermath of the 1997-1999 Asian economic crisis, are clear.

If China frees up and liberalizes its financial markets in the face of a crisis, writes off bad loans, and closes down insolvent banks, it will emerge in a much stronger position once the crisis blows over.

And there will be lots of money to be made buying good-quality Chinese shares during the crisis. But, for now, it’s time to brace for the downturn.


    



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Citi On International Finance As War By Any Other Means

With The White House proclaiming Russian stocks a "sell" today (and in the meantime Russian stocks and the Ruble strengthening), it is clear, as Citi's Steven Englander notes, that the Russia/Ukraine crisis may be the first major political conflict that is played out in international financial markets. The difference, Englander points out, between this and standard imposition of sanctions is that both sides have some options that can inflict damage on the other side.

International finance as a continuation of war by other means (via Citi's Steven Englander)

Normally sanctions involve a big group of countries on one side and a vulnerable target on the other so the vulnerability is very asymmetric. Small countries can occasionally expropriate big country assets but in most cases that ostracizes the small country from the international financial community.

The US/EU are hoping that they can make the crisis sufficiently painful to Russia that it backs off from the Ukraine. The Russians may suspect that the willingness in the West to pay a financial/economic price is limited and that public opinion will swing quickly if volatility emerges.

So far we have:

1. Formal sanctions by the US and Europe on a small set of Russian/Crimean officials, plus the threat that the sanctions will be extended

 

2. Possible release of oil from the Strategic Petroleum Reserve (denied by the White House as an effort to push oil prices down)

 

3. Pressures on Russian asset markets

 

4. Probable move of Russian reserves out of Fed to non-US custodians

 

5. Russia destabilizing Ukrainian gas and debt markets

There are even reports that  there were efforts by Russia in 2008 to exacerbate the US financial crisis, although the reports do not have firsthand documentation. Other countries may be watching this as a template for how events would play out in case Asian political issues over conflicting territorial claims or other issues escalate.

These developments may give a different meaning to the term ‘currency wars’ that became so popular in recent years.

One advantage using finance as a weapon is that it can be scaled up or down as needed, and is much more reversible than military actions. It is also quicker than traditional trade sanctions to have an impact, and arguably is more likely to hit decision-makers and those who have access to them  than trade sanctions, which often hit the poor and almost always create profit-making opportunities for the well-connected in sanctions-running

How far can this go and what are the implications?

So far the steps taken are baby steps – sanctions applied to a handful of Russians and Crimeans by the US and EU, but no real screws being applied (Russian President Putin not named, for example).  Probably there are huge holes through which transactions can continue to occur and the sanctions can be evaded. However, if the crisis intensifies, the US/EU may be tempted to apply broader sanctions on Russian assets on the view that this is the quickest way to apply pressure and that Russians will be unable or unwilling to move their assets into friendly jurisdictions quickly enough.

For the Russians, the temptation may be to try and sell USD assets in order to disrupt US asset markets, but the leverage may be temporary.  Their reserves are almost USD470bn but they have been actively diversifying away from USD for years. Relative to the size of any market they might be tempted to disrupt, the USD holdings are small. Moreover the sense that the price was being driven down by politically-motivated selling would likely attract buyers on the view that the effects would be limited. Were they do convince other countries to join them, the impact would be more longer lasting and more disruptive, but it is a little bit like letting your own home run down because it will lower the property value of a neighbor you dislike. The damage you do to yourself is more than you can expect to do to your neighbor.

The Russian holdings of USD are probably enough to give the USD a big whack, were they to go into the market selling, especially as since there may be selling pressures already from other reserve managers, and given the trend-loving nature of currency investors. Once you get past hurt feelings, it is not clear that  USD weakness would be a US economic or financial market negative.  A strong dollar is hardly a US policy priority, to the extent that USD weakness would crowd in both exports and imported inflation, it would probably be viewed as going in the direction preferred by Fed policymakers. Were it not for the unfriendly motivation, it is unlikely that US policymakers would object. 

Long-term implications

If the use of financial market warfare intensifies, the risks are:

1) More home bias in investing,

 

2) Official investors gravitating to jurisdictions and custody arrangements that insulate their assets from seizure

 

3) Premium on gold, physical commodities and other unattachable assets

This would unwind many years of international capital market liberalization. Moreover, it would have the greatest impact in discouraging long-term, illiquid investments, as these would be most vulnerable to seizure. It is much easier to cut positions in short term liquid assets if there is trouble brewing.

External deficit EM economies would probably suffer the most since creditors would see an extra force majeure risk premium added. Apolitical safe havens would probably benefit the most.  Where there is an interaction with the traditional currency war discussion is that the damage to EM borrowers would probably be greater than to G10 borrowers.  When EM countries depreciate, they often get hit by higher bond yields as well.  G10 countries, even when they depreciate sharply, often do not face big pressures on their bond markets.  Moreover, higher food prices from depreciation are not nearly the same social issue in G10 that they are in EM.


    



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Killing of Ukrainian Serviceman Begins ‘Military Stage’ of Conflict

Russian President Vladimir
Putin and the parliament of Crimea signed a treaty today
declaring
the region a territory of the Russian Federation.
Despite the annexation nominally ending Crimea’s identity crisis,
the situation on the ground hit a new low: a Ukrainian serviceman
under fire from “armed
masked men
” and snipers was killed by a bullet to the neck.

The New York Times
reported
earlier that “within hours of that declaration, a
group of soldiers opened fire while storming a modest Ukrainian
military installation in Kubanskoye, near Simferopol… the base
appeared to be under control of the soldiers, who wore no
insignia.” The Associated Press
hints
at who might be responsible, though, since “a truck
bearing a Russian flag was used in the operation.”

When the gunfire ended, “one serviceman at the base had died of
his wounds. A second man, a captain, was injured,” according to
Reuters.

Christopher Miller of the Kyiv Post clarified
that the killed man was not even soldier, but a “a cartographer who
worked at photogrammetric information center.”

Ukraine’s interim prime minister
stated
that the killing, for which he blames Russian soldiers,
marks a “shifting from a political to a military stage” in the
Crimean crisis, and that the attack constitutes a “war crime.”

Russia
announced
yesterday that the Ukrainian military has until
Friday to vacate Crimea.

Although Putin
insists
he has no interest in seizing other regions of Ukraine,
Russian troops are building up along the border and conducting
military exercises. Adding to the alarm, The Interpreter
magazine
reports
that “Belarus, a long-time Russian ally, was supposed
to receive a shipment of 15 Russian Su-27SM3 aircraft.
Now, that number has risen to 24,” which “could be seen as a
direct response to this crisis” in Ukraine.

As Reason‘s Matthew Feeney highlighted, Vice President
Joe Biden today suggested that the U.S. may soon be conducting
military exercises of its own in the Baltic Sea.  

Read more Reason coverage of Ukraine and Russia
here

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China’s Shale Gas Development Potential

Submitted by Stratfor,

China's potential in shale gas production is nearly as staggering as its potential growth in demand for natural gas. The U.S. Energy Information Administration estimates that China possesses by far the world's largest reserves of technically recoverable shale gas. Although China's shale gas industry is not as advanced as the United States', it could be the most advanced outside of North America. China's target is to produce 60 billion to 100 billion cubic meters of shale gas by 2020, but there are severe limitations to hitting the target. China is more likely to produce somewhere around 25 billion cubic meters of shale gas by then. In total, China will realistically be able to access 275 billion cubic meters to perhaps 300 billion cubic meters of natural gas from land-based (both piped and domestic) sources by 2020. It remains unclear whether this will be able to satisfy most of China's demand. Should China's demand reach higher estimates, such as Barclay's 450 billion cubic meters by 2020 or the Chinese Ministry of Land and Resources' 380 billion cubic meters, China could be forced to import as much as 150 billion cubic meters of liquefied natural gas by 2020. 

 

That kind of demand could very easily overwhelm liquefied natural gas markets internationally, ensuring that liquefied natural gas supply diversification will not lead to lower prices. However, this is unlikely, because there will remain an intrinsic link between China's domestic supply and domestic demand. While China has been pushing for natural gas to offset coal and oil, Beijing still must balance two competing needs: the need for natural gas to replace those other sources and the strategic risks of overreliance on foreign sources of natural gas (as opposed to coal, which it can largely produce domestically). As a result, China's overall demand for imported natural gas — including liquefied natural gas — will be related to the success and pace of its shale gas development.

Additionally, the most likely scenario in which China's liquefied natural gas demand would increase dramatically is one in which liquefied natural gas prices do not skyrocket but are low enough that it would be worth importing large volumes of natural gas despite the strategic losses. Either way, China would still be importing small volumes of liquefied natural gas and has every interest in working with Japan, South Korea and other liquefied natural gas importers in order to manage prices. However, China's potential demand spikes leave those other liquefied natural gas importers worried — especially those, such as Japan, that have few options other than importing liquefied natural gas.

 


    



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NSA Recorded the CONTENT of ‘EVERY SINGLE’ CALL In One Foreign Country … and Also In AMERICA?

The Washington Post reports – based upon documents leaked by Edward Snowden – that the NSA is recording “every single” phone call in one foreign country (at the request of the NSA, the Post is withholding the name of the country. However, the Post notes that the NSA is also planning on expanding the program to other nations).

The Post also reports that the NSA has the ability to “reach into the past” and retroactively go back and listen to the calls later.

Sadly, this is also occurring in America.

Specifically, there is substantial evidence from top NSA and FBI whistleblowers that the government is recording the content of our calls … word-for-word.

NSA whistleblower Russel Tice – a key source in the 2005 New York Times report that blew the lid off the Bush administration’s use of warrantless wiretapping – says that the content and metadata of all digital communications are being tapped by the NSA.

Tice notes:

They’re collecting content … word-for-word.

 

***

 

You can’t trust these people. They lie, and they lie a lot.

Documents leaked by Edward Snowden to Glenn Greenwald show:

But what we’re really talking about here is a localized system that prevents any form of electronic communication from taking place without its being stored and monitored by the National Security Agency.

It doesn’t mean that they’re listening to every call, it means they’re storing every call and have the capability to listen to them at any time, and it does mean that they’re collecting millions upon millions upon millions of our phone and email records.

CNET reported last year:

Earlier reports have indicated that the NSA has the ability to record nearly all domestic and international phone calls — in case an analyst needed to access the recordings in the future. A Wired magazine article last year disclosed that the NSA has established “listening posts” that allow the agency to collect and sift through billions of phone calls through a massive new data center in Utah, “whether they originate within the country or overseas.” That includes not just metadata, but also the contents of the communications.

 

***

 

Sen. Dianne Feinstein (D-Calif.), the head of the Senate Intelligence committee, separately acknowledged this week that the agency’s analysts have the ability to access the “content of a call.”

NBC News reported last year:

NBC News has learned that under the post-9/11 Patriot Act, the government has been collecting records on every phone call made in the U.S.

Former FBI counter-terrorism agent Tim Clemente told CNN:

There’s a way to look at digital communications in the past.

In other words, if an analyst wants to spy on you, he can pull up your past communications (Remember, the private Internet Archive has been archiving web pages since the  1990s. So the NSA has undoubtedly been doing the same thing with digital communications).

Tice and top NSA whistleblower William Binney confirmed to PBS that the NSA is recording every word of every phone call made within the United States:

[PBS INTERVIEWER] JUDY WOODRUFF: Both Binney and Tice suspect that today, the NSA is doing more than just collecting metadata on calls made in the U.S. They both point to this CNN interview by former FBI counterterrorism agent Tim Clemente days after the Boston Marathon bombing. Clemente was asked if the government had a way to get the recordings of the calls between Tamerlan Tsarnaev and his wife.

 

TIM CLEMENTE, former FBI counterterrorism agent: On the national security side of the house, in the federal government, you know, we have assets. There are lots of assets at our disposal throughout the intelligence community and also not just domestically, but overseas. Those assets allow us to gain information, intelligence on things that we can’t use ordinarily in a criminal investigation.

 

All digital communications are — there’s a way to look at digital communications in the past. And I can’t go into detail of how that’s done or what’s done. But I can tell you that no digital communication is secure.

 

JUDY WOODRUFF: Tice says after he saw this interview on television, he called some former workmates at the NSA.

 

RUSSELL TICE: Well, two months ago, I contacted some colleagues at NSA. We had a little meeting, and the question came up, was NSA collecting everything now? Because we kind of figured that was the goal all along. And the answer came back. It was, yes, they are collecting everything, contents word for word, everything of every domestic communication in this country.

 

JUDY WOODRUFF: Both of you know what the government says is that we’re collecting this — we’re collecting the number of phone calls that are made, the e-mails, but we’re not listening to them.

 

WILLIAM BINNEY: Well, I don’t believe that for a minute. OK?

 

I mean, that’s why they had to build Bluffdale, that facility in Utah with that massive amount of storage that could store all these recordings and all the data being passed along the fiberoptic networks of the world. I mean, you could store 100 years of the world’s communications here. That’s for content storage. That’s not for metadata.

 

Metadata if you were doing it and putting it into the systems we built, you could do it in a 12-by-20-foot room for the world. That’s all the space you need. You don’t need 100,000 square feet of space that they have at Bluffdale to do that. You need that kind of storage for content.

 

JUDY WOODRUFF: So, what does that say, Russell Tice, about what the government — you’re saying — your understanding is of what the government does once these conversations take place, is it your understanding they’re recorded and kept?

 

RUSSELL TICE: Yes, digitized and recorded and archived in a facility that is now online. And they’re kind of fibbing about that as well, because Bluffdale is online right now.

 

And that’s where the information is going. Now, as far as being able to have an analyst look at all that, that’s impossible, of course. And I think, semantically, they’re trying to say that their definition of collection is having literally a physical analyst look or listen, which would be disingenuous.

 

Binney told Washington’s Blog:

The Washington Post reports – based upon documents leaked by Edward Snowden – that the NSA is recording “every single” phone call in one foreign country (at the request of the NSA, the Post is withholding the name of the country. However, the Post notes that the NSA is also planning on expanding the program to other nations).

The Post also reports that the NSA has the ability to “reach into the past” and retroactively go back and listen to the calls later.

Sadly, this is also occurring in America.

Specifically, there is substantial evidence from top NSA and FBI whistleblowers that the government is recording the content of our calls … word-for-word.

NSA whistleblower Russel Tice – a key source in the 2005 New York Times report that blew the lid off the Bush administration’s use of warrantless wiretapping – says that the content and metadata of all digital communications are being tapped by the NSA.

Tice notes:

They’re collecting content … word-for-word.

***

You can’t trust these people. They lie, and they lie a lot.

Documents leaked by Edward Snowden to Glenn Greenwald show:

But what we’re really talking about here is a localized system that prevents any form of electronic communication from taking place without its being stored and monitored by the National Security Agency.

It doesn’t mean that they’re listening to every call, it means they’re storing every call and have the capability to listen to them at any time, and it does mean that they’re collecting millions upon millions upon millions of our phone and email records.

CNET reported last year:

Earlier reports have indicated that the NSA has the ability to record nearly all domestic and international phone calls — in case an analyst needed to access the recordings in the future. A Wired magazine article last year disclosed that the NSA has established “listening posts” that allow the agency to collect and sift through billions of phone calls through a massive new data center in Utah, “whether they originate within the country or overseas.” That includes not just metadata, but also the contents of the communications.***

Sen. Dianne Feinstein (D-Calif.), the head of the Senate Intelligence committee, separately acknowledged this week that the agency’s analysts have the ability to access the “content of a call.”

NBC News reported last year:

NBC News has learned that under the post-9/11 Patriot Act, the government has been collecting records on every phone call made in the U.S.

Former FBI counter-terrorism agent Tim Clemente told CNN:

There’s a way to look at digital communications in the past.

In other words, if an analyst wants to spy on you, he can pull up your past communications (Remember, the private Internet Archive has been archiving web pages since the  1990s. So the NSA has undoubtedly been doing the same thing with digital communications).

Tice and top NSA whistleblower William Binney confirmed to PBS that the NSA is recording every word of every phone call made within the United States:

[PBS INTERVIEWER] JUDY WOODRUFF: Both Binney and Tice suspect that today, the NSA is doing more than just collecting metadata on calls made in the U.S. They both point to this CNN interview by former FBI counterterrorism agent Tim Clemente days after the Boston Marathon bombing. Clemente was asked if the government had a way to get the recordings of the calls between Tamerlan Tsarnaev and his wife.

TIM CLEMENTE, former FBI counterterrorism agent: On the national security side of the house, in the federal government, you know, we have assets. There are lots of assets at our disposal throughout the intelligence community and also not just domestically, but overseas. Those assets allow us to gain information, intelligence on things that we can’t use ordinarily in a criminal investigation.

All digital communications are — there’s a way to look at digital communications in the past. And I can’t go into detail of how that’s done or what’s done. But I can tell you that no digital communication is secure.

JUDY WOODRUFF: Tice says after he saw this interview on television, he called some former workmates at the NSA.

RUSSELL TICE: Well, two months ago, I contacted some colleagues at NSA. We had a little meeting, and the question came up, was NSA collecting everything now? Because we kind of figured that was the goal all along. And the answer came back. It was, yes, they are collecting everything, contents word for word, everything of every domestic communication in this country.

JUDY WOODRUFF: Both of you know what the government says is that we’re collecting this — we’re collecting the number of phone calls that are made, the e-mails, but we’re not listening to them.

WILLIAM BINNEY: Well, I don’t believe that for a minute. OK?

I mean, that’s why they had to build Bluffdale, that facility in Utah with that massive amount of storage that could store all these recordings and all the data being passed along the fiberoptic networks of the world. I mean, you could store 100 years of the world’s communications here. That’s for content storage. That’s not for metadata.

Metadata if you were doing it and putting it into the systems we built, you could do it in a 12-by-20-foot room for the world. That’s all the space you need. You don’t need 100,000 square feet of space that they have at Bluffdale to do that. You need that kind of storage for content.

JUDY WOODRUFF: So, what does that say, Russell Tice, about what the government — you’re saying — your understanding is of what the government does once these conversations take place, is it your understanding they’re recorded and kept?

RUSSELL TICE: Yes, digitized and recorded and archived in a facility that is now online. And they’re kind of fibbing about that as well, because Bluffdale is online right now.

And that’s where the information is going. Now, as far as being able to have an analyst look at all that, that’s impossible, of course. And I think, semantically, they’re trying to say that their definition of collection is having literally a physical analyst look or listen, which would be disingenuous.

 

Binney tells Washington’s Blog:

It would have to come from the upstream collection/recording “Fairview etc” [background here and here] with – probably – telcom cooperation. That’s how the former FBI agent Tim Clemente could say on CNN that they had ways of getting back to the content of the phone call from one of the bombers to his wife prior to the bombing. Now we are starting to see some of the monitoring of US citizens on the Public Switched Telephone Network (PSTN) [back

Bonus:

Snowden: “Is It Really Terrorism That We’re Stopping? I Say No. The Bottom Line Is That Terrorism … Has Always Been a Cover For Actions”


    



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NYPD Claims Secrecy For Its Freedom of Information Request Criteria

The New York Police Department has earned a
notoriously
poor
reputation for transparency. According to a report unveiled
last year by former New York City Public Advocate and current
mayor, Bill de Blasio, about a third of information requests are
ignored. When agency representatives do respond, they habitually
deny access to material, often citing questionable
problems with the requests. To make matters worse, all requests
must be made by postal mail. Hoping to dig to the root of this,
Shawn Musgrave submitted an information request for the
accept-or-reject criteria for an information request. The request
was
rejected
on the grounds that the information is a “privileged
attorney-client work-product.”

Citizens can submit Freedom of Information Law (FOIL) requests
to any New York state agency to promote government transparency and
accountability. Agencies are required to respond to requests, but
there are several exemptions
intended to protect safety, privacy, national security, and other
concerns. But Boing Boing
argues
that the NYPD has “invented its own, extra-legal system
of ‘classified’ documents that it has unilaterally decided it
doesn’t have to provide to the public.”

In officer Jonathan David’s reply to Musgrave, David argues that
the requested records “reflect confidential communications between
members of the FOIL unit and their attorneys” and “preparation of
these records called upon attorneys to apply the skills and talents
of an attorney, making these records attorney work product.”

Musgrave, editor of MuckRock, a website that facilitates FOIL
request submissions,
explains
in a blog post, “That a lawyer reviewed or even
drafted these documents does not make them exempt from disclosure.”
Musgrave continues:

Handbooks and training materials hardly qualify as
‘confidential communications,’ particularly when the subject matter
is transparency itself.

Brand new reports paint an unsettling portrait of transparency
requests at the federal level. The Associated Press

determined
, based on U.S. federal FOIA data, that last year,
the “most transparent administration ever” censored or denied
access to more information than ever before. In another
report
compiled by the Center for Effective Government (CEG),
15 agencies were ranked on an A-F grading scale based on their
performance in handling FOIA requests—eight passed. Of the eight,
four received D’s. Perhaps the NYPD is simply a particularly
egregious cluster caught in a web of wider unaccountability.

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Rhode Island Wants Moms To Urge Their Kids To Get Health Coverage Via Dating, Hookup Apps

Are you a mother in Rhode
Island and want your grown children to get health insurance?
Luckily for you, the Rhode Island state government launched a
Facebook ad campaign today warning 23-33 year-olds that if they
don’t get health coverage through the Rhode Island exchange
(HealthSourceRI) their moms could find them on OkCupid,
Tinder, or Snapchat and urge them to get covered.

Really.

According to
BuzzFeed
the Rhode Island state government recently soft
launched Nag Toolkit, a
site that teaches mothers how to track down and stalk their kids on
dating and hookup apps as well as social media apps to remind them
to get health insurance.

From
BuzzFeed:

In a new campaign set to officially launch Tuesday, the Rhode
Island state government is taking the longstanding national effort
to use the opinion of mothers as the pathway to youth insurance
enrollment to new levels. In Facebook ads aimed at state residents
aged 23–33, the state will warn people that if they don’t sign up
for health care through the Rhode Island exchange — known as
HealthSourceRI — then Rhode Island will help their moms find them
on Snapchat, Vine, Tinder, Twitter, and OkCupid.

It’s not an idle threat. Last week, the state soft-launched the
Nag Toolkit, a website for moms containing simple instructions for
how to join, entice, and stalk their children on dating websites
with reminders to buy health coverage before the enrollment
deadline passes at the end of March. A separate campaign aimed at
moms will drive them to the Toolkit site, which also collects email
addresses of young people submitted by their moms. The ads for moms
are aimed at women in Rhode Island aged 45 and up.

Nag Toolkit urges mothers who want to find their children on
OkCupid to come up with a “provocative username.”

I have it on good authority from a Reason colleague
that on Tinder both parties have to consent to communicating before
*ahem* contact can begin, which may result in some interesting
interactions. 

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Inflation Does Not Produce Economic Growth

Submitted by Frank Shostak via the Ludwig von Mises Institute,

After settling at 3.9 percent in July 2011 the yearly rate of growth of the consumer price index (CPI) fell to 1.6 percent by January this year. Also, the yearly rate of growth of the consumer price index less food and energy displays a visible downtrend falling from 2.3 percent in April 2012 to 1.6 percent in January.

On account of a visible decline in the growth momentum of the consumer price index (CPI) many economists have concluded that this provides scope for the US central bank to maintain its aggressive monetary stance.

Some other economists, such as the president of the Chicago Federal Reserve Bank’s Charles Evans are even arguing that the declining trend in the growth momentum of the CPI makes it possible for the Fed to further strengthen monetary pumping. This, Evans holds, will reverse the declining trend in price inflation and will bring the economy onto a path of healthy economic growth. Evans also asserts that the Fed should be willing to let inflation temporarily run above its target level of 2 percent. He also said that an unemployment rate of about 5.5 percent and an inflation rate of about 2 percent are indicative of a healthy economy.

But how is it possible that higher price inflation will make the economy stronger? If price inflation slightly above 2 percent is good for the economy, why not aim at a much higher rate of inflation, which will make the economy much healthier?

Contrary to Evans a strengthening in monetary pumping to lift the rate of price inflation will only deepen economic impoverishment by allowing the emergence of new bubble activities and by the strengthening of existing bubble activities.

It will increase the pace of the wealth diversion from wealth generators to various non-productive activities, thereby weakening the process of wealth generation.

Evans and other economists are of the view that a strengthening in monetary pumping will strengthen the flow of monetary spending, which in turn will keep the economy stronger.

In this way of thinking, an increase in the monetary spending of one individual lifts the income of another individual whose increase in spending boosts the incomes of more individuals, which in turn boosts their spending and lifts the incomes of more individuals, etc.

If, for whatever reasons, people curtail their spending this disrupts the monetary flow and undermines the economy. To revive the monetary flow it is recommended that the central bank should lift monetary pumping. Once the monetary flow is re-established this sets in motion self-sustaining economic growth. So it is held.

Again we suggest that monetary pumping cannot set in motion self-sustaining economic growth. It can only set in motion an exchange of something for nothing (i.e., economic impoverishment).

As long as the pool of real wealth is still growing, monetary pumping can create the illusion that it can grow the economy. Once however, the pool is declining the illusion that the Fed’s loose policies can set in motion economic growth is shattered.

If, on account of the deterioration of the infrastructure, a baker’s production of bread per unit of time is now 8 loaves instead of 10 loaves, and the shoemaker’s production per unit of time is now 4 pairs of shoes instead of 8 pairs of shoes, then no amount of money printing can lift the production of real wealth per unit of time (i.e., of bread and shoes). Monetary pumping cannot replace non-existent tools and machinery.

On the contrary, the holders of newly-printed money who don’t produce any real wealth will weaken the ability of wealth generators to produce wealth by diverting to themselves bread and shoes, thereby leaving less real wealth to fund the maintenance and the expansion of the infrastructure.

Now, Fed officials give the impression that once they put the economy onto the so-called self-sustained growth path the removal of the monetary stimulus will not generate major side effects. But in reality a loose monetary policy sets in motion bubble activities. The existence of these activities is supported by monetary pumping, which diverts to bubble activities real wealth from wealth generating activities.

Once monetary pumping is aborted, bubble activities are forced to go under since they cannot fund themselves without the support of loose monetary policy. An economic bust ensues. The illusion that the Fed can bring the economy onto a self-sustaining growth path is shattered.

 

Conclusion

On account of a visible decline in the growth momentum of the US price index, many economists have concluded that this provides scope for the Fed to maintain its aggressive monetary stance. Some economists such as the president of the Chicago Federal Reserve Bank, Charles Evans, even argue that the declining trend in the growth momentum of the CPI makes it possible for the Fed to further strengthen monetary pumping. This, it is held, will reverse the declining trend in price inflation and will bring the US economy onto a path of healthy economic growth. We suggest that contrary to Evans, a strengthening in monetary pumping will only deepen economic impoverishment by allowing the emergence of new bubble activities and by the strengthening of existing bubble activities.


    



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