Martin Armstrong Slams ‘Universal Basic Income’ Supporters

Authored by Martin Armstrong via ArmstrongEconomics.com,

The idea of free money being touted by Elon Musk and Mark Zuckerberg only demonstrates that they know nothing about humanity or economics. 

 

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They see universal free money as a cushion for workers whose jobs might be replaced by automation or robots.

They argue that free money could provide workers with the flexibility to retrain for a new career, pursue creative interests, or start their own business.

If we are talking about a temporary benefit during a retraining period, then that is an entirely different idea from a universal basic income guarantee. You can drive down the streets in New Jersey and you see hand-made signs posted that they pay cash for diabetes medical material handed out free by the government. They also sell food stamps. You cannot change humanity. Some people will obey the rules and others will circumvent them.

The last thing you want to do in society is provide to the population some sort of guaranteed income where people can stay home and do nothing.

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This will foster the same hatred of anyone who works and has more than they do and it will promote hatred and class warfare.

When the automobile was invented, that displaced people who were carpenters making wagons. When the Dust Bow hit during the Great Depression, it added to the displacement of farmers. The tractors replaced people tilling the soil just as the cotton gin replaced slave labor in the South. Technology will always replace workers and the greater the tax burden, the greater the incentive to replace workers.

Neither Elon Musk nor Mark Zuckerberg has any clue about economic history for if they did, they would understand that technology always advances and displaces segments of the workforce. This is also one reason governments like war to thin the herd when unemployment rises.

Providing free money is actually an experiment in Finland. It began one year ago taking 2,000 unemployed Finns who were randomly selected from across the country for a trial testing universal basic income. Each month for two years they would receive €560 euros from the government, tax-free. They can spend the money however they decide. The plus of this program is the reduction in bureaucracy. As I said, the US government hands out food stamps but people sell them. From an economic standpoint, this system is less costly than the current one in play with bureaucrats determining what they will allow people to have or not. The full report on the Finland experiment will not be issued until the 2-year program is complete after January 1st, 2019.

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Palladium Panic-Bid To Record Highs As Shortage Fears Mount

Palladium was up 55% in 2017 – the best performing commodity in the world – and if the first two days of this year are anything to go by, 2018 will see a repeat.

Palladium inventories in warehouses tracked by Nymex shrank 25 percent in December, capping a fourth straight annual decline, the longest streak since 2000.

 

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Amid shrinking inventories and still strong (credit-fueled) auto production (and sales), Bloomberg reports the metal used to curb pollution from gasoline-fueled engines climbed to a record on the New York Mercantile Exchange as the dollar weakened for a fifth straight day.

 

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Palladium production will continue to lag behind consumption until at least 2022, Morgan Stanley analysts forecast in a report Dec. 11.

“People are worried about shortages,” Peter Thomas, a senior vice president at Zaner Group LLC in Chicago, said by telephone.

“The market took off on short supply, good demand and a weak dollar, and ran into some monstrous amounts of stops and popped and rallied.”

Good thing there is no inflation.

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One Trader Warns “Beware Of Januaries Having A Mind Of Their Own”

After yesterday’s panic bid in growth stocks – sending Nasdaq to record highs – it is clear, as former fund manager Richard Breslow points out, “I could feel the fear of ‘missing it’…” However, as Breslow points out, what we think we knew about the new year was already priced in…and may or may not have lasting value in guiding us going forward.”

 

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Via Bloomberg,

Traders quite reasonably think that the end of a year is the time for introspection and game-planning for what lies ahead. And while it’s a natural inclination, it is also misguided. Far better to spend the time reflecting on the reasons for past victories and failures. What we think we knew about the new year was already priced in. And may or may not have lasting value in guiding us going forward.

We all know the saying about past results. It’s also true about previous market conditions. This is now the now, and you have to get a handle on what current market dynamics should inform your trading. More of the same or a whole new ballgame? But January, or more typically late Januaries, tend to want to show their own personalities, irrespective of what went before. And can be very unforgiving to how they treat trades that have been accumulated based on what came before.

Going through this exercise is especially important because identifying potential turns in market conditions and direction may be the last situation where human risk takers can get a jump on models and algorithms. Don’t squander the opportunity.

When trading kicked off on Tuesday, you heard a lot of talk about the big moves that were sure to come. Yields jumped. The dollar slid. Emerging markets leapt higher. You would have assumed, given the price action, that last weekend marked a magical transition from manipulated and distorted markets back to sensible, good old fashioned normal ones where trading for break-outs would be the ticket.

Look at a chart of EUR/USD or 10-year Treasuries before concluding you know everything about how this year will play out. Then decide if you want to add to positions at recent extremes.

 

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It’s an important decision. Especially as early trading seems heavily influenced by analysts telling us that it all looks like nothing but clear skies ahead.

I could feel the fear of “missing it.” And this, not only on the very first trading day of what will be a long year, but with Japan still on holiday and MiFID II not yet rolled out. Which is why it’s a very valuable object lesson to consider where you could transact business this morning. The dollar is higher, yields lower and EM resting. And this despite some additional decent numbers and ECB Board members talking tough.

Crucially, however, Breslow concludes with a key insight that few seem to consider – the counter-cyclical tendencies of The Fed now as valuations become more and more stretched and financial conditions more and more easy

 

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One last thought as we await the FOMC minutes. Given the changes on tap to the Committee it is very much stale news. But one thing that hasn’t changed is that if the market takes whatever is said as dovish, the price action will only increase the odds of more hikes to come.

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“It Felt Like Being In The Matrix” – James Risen’s Stunning Inside Story

During his extended tenure working for the NYT, James Risen became a legend in the world of investigative and national security journalism: Risen broke some of the most important stories of the post 9/11 era, from the warrantless surveillance against Americans conducted under the Bush-Cheney administration, to black prison sites run by the CIA, to failed covert actions in Iran, stories for which Risen won the Pulitzer among other awards.

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But what Risen is perhaps most famous for, is fighting a battle under both the Bush and Obama administrations as they demanded — under threat of imprisonment —the name of one of Risen’s alleged confidential sources. In the end, Risen prevailed and refused to testify and he was not locked up. But during the course of his case, there were rulings that could have far reaching implications for journalists.

But it isn’t just the government that Risen had to fight. He also battled his own editors and other powerful figures at the New York Times. Some of those people pushed the narrative that Iraq had WMDs and they regularly colluded with senior officials at the CIA, NSA, and White House in an effort to kill — or delay publication of — Risen’s stories. This morning, James Risen has written an extensive account of his years at the New York Times and he names names.

Risen is now a senior national security correspondent at The Intercept where his incredible inside story has now been published. Below we present some excerpts from “My Life as a New York Times Reporter in the Shadow of the War on Terror

* * *

1. THE BIGGEST SECRET

My Life as a New York Times Reporter in the Shadow of the War on Terror

I was sitting in the nearly empty restaurant of the Westin Hotel in Alexandria, Virginia, getting ready for a showdown with the federal government that I had been trying to avoid for more than seven years. The Obama administration was demanding that I reveal the confidential sources I had relied on for a chapter about a botched CIA operation in my 2006 book, “State of War.” I had also written about the CIA operation for the New York Times, but the paper’s editors had suppressed the story at the government’s request. It wasn’t the only time they had done so.

Bundled against the freezing wind, my lawyers and I were about to reach the courthouse door when two news photographers launched into a perp-walk shoot. As a reporter, I had witnessed this classic scene dozens of times, watching in bemusement from the sidelines while frenetic photographers and TV crews did their business. I never thought I would be the perp, facing those whirring cameras.

As I walked past the photographers into the courthouse that morning in January 2015, I saw a group of reporters, some of whom I knew personally. They were here to cover my case, and now they were waiting and watching me. I felt isolated and alone.

My lawyers and I took over a cramped conference room just outside the courtroom of U.S. District Judge Leonie Brinkema, where we waited for her to begin the pretrial hearing that would determine my fate. My lawyers had been working with me on this case for so many years that they now felt more like friends. We often engaged in gallows humor about what it was going to be like for me once I went to jail. But they had used all their skills to make sure that didn’t happen and had even managed to keep me out of a courtroom and away from any questioning by federal prosecutors.

Until now.

My case was part of a broader crackdown on reporters and whistleblowers that had begun during the presidency of George W. Bush and continued far more aggressively under the Obama administration, which had already prosecuted more leak cases than all previous administrations combined. Obama officials seemed determined to use criminal leak investigations to limit reporting on national security. But the crackdown on leaks only applied to low-level dissenters; top officials caught up in leak investigations, like former CIA Director David Petraeus, were still treated with kid gloves.

Initially, I had succeeded in the courts, surprising many legal experts. In the U.S. District Court for the Eastern District of Virginia, Brinkema had sided with me when the government repeatedly subpoenaed me to testify before a grand jury. She had ruled in my favor again by quashing a trial subpoena in the case of Jeffrey Sterling, a former CIA officer who the government accused of being a source for the story about the ill-fated CIA operation. In her rulings, Brinkema determined that there was a “reporter’s privilege” — at least a limited one — under the First Amendment that gave journalists the right to protect their sources, much as clients and patients can shield their private communications with lawyers and doctors.

But the Obama administration appealed her 2011 ruling quashing the trial subpoena, and in 2013, the 4th Circuit Court of Appeals, in a split decision, sided with the administration, ruling that there was no such thing as a reporter’s privilege. In 2014, the Supreme Court refused to hear my appeal, allowing the 4th Circuit ruling to stand. Now there was nothing legally stopping the Justice Department from forcing me to either reveal my sources or be jailed for contempt of court.

But even as I was losing in the courts, I was gaining ground in the court of public opinion. My decision to go to the Supreme Court had captured the attention of the nation’s political and media classes. Instead of ignoring the case, as they had for years, the national media now framed it as a major constitutional battle over press freedom.

That morning in Alexandria, my lawyers and I learned that the prosecutors were frustrated by my writing style. In “State of War: The Secret History of the CIA and the Bush Administration,” I didn’t include attribution for many passages. I didn’t explicitly say where I was getting my information, and I didn’t identify what information was classified and what wasn’t. That had been a conscious decision; I didn’t want to interrupt the narrative flow of the book with phrases explaining how I knew each fact, and I didn’t want to explicitly say how I had obtained so much sensitive information. If prosecutors couldn’t point to specific passages to prove I had relied on confidential sources who gave me classified information, their criminal case against Sterling might fall apart.

When I walked into the courtroom that morning, I thought the prosecutors might demand that I publicly identify specific passages in my book where I had relied on classified information and confidential sources. If I didn’t comply, they could ask the judge to hold me in contempt and send me to jail.

I was worried, but I felt certain that the hearing would somehow complete the long, strange arc I had been living as a national security investigative reporter for the past 20 years. As I took the stand, I thought about how I had ended up here, how much press freedom had been lost, and how drastically the job of national security reporting had changed in the post-9/11 era.

* * *

There’s no press room at CIA headquarters, like there is at the White House. The agency doesn’t hand out press passes that let reporters walk the halls, the way they do at the Pentagon. It doesn’t hold regular press briefings, as the State Department has under most administrations. The one advantage that reporters covering the CIA have is time. Compared to other major beats in Washington, the CIA generates relatively few daily stories. You have more time to dig, more time to meet people and develop sources.

I started covering the CIA in 1995. The Cold War was over, the CIA was downsizing, and CIA officer Aldrich Ames had just been unmasked as a Russian spy. A whole generation of senior CIA officials was leaving Langley. Many wanted to talk.

I was the first reporter many of them had ever met. As they emerged from their insular lives at the CIA, they had little concept of what information would be considered newsworthy. So I decided to show more patience with sources than I ever had before. I had to learn to listen and let them talk about whatever interested them. They had fascinating stories to tell.

In addition to their experiences in spy operations, many had been involved in providing intelligence support at presidential summit meetings, treaty negotiations, and other official international conferences. I realized that these former CIA officers had been backstage at some of the most historic events over the last few decades and thus had a unique and hidden perspective on what had happened behind the scenes in American foreign policy. I began to think of these CIA officers like the title characters in Tom Stoppard’s play “Rosencrantz and Guildenstern Are Dead,” in which Stoppard reimagines “Hamlet” from the viewpoint of two minor characters who fatalistically watch Shakespeare’s play from the wings.

While covering the CIA for the Los Angeles Times and later the New York Times, I found that patiently listening to my sources paid off in unexpected ways. During one interview, a source was droning on about a minor bureaucratic battle inside the CIA when he briefly referred to how then-President Bill Clinton had secretly given the green light to Iran to covertly ship arms to Bosnian Muslims during the Balkan wars. The man had already resumed talking about his bureaucratic turf war when I realized what he had just said and interrupted him, demanding that he go back to Iran. That led me to write a series of stories that prompted the House of Representatives to create a special select committee to investigate the covert Iran-Bosnia arms pipeline. Another source surprised me by volunteering a copy of the CIA’s secret history of the agency’s involvement in the 1953 coup in Iran. Up until then, the CIA had insisted that many of the agency’s internal documents from the coup had long since been lost or destroyed.

But one incident left me questioning whether I should continue as a national security reporter. In 2000, John Millis, a former CIA officer who had become staff director of the House Intelligence Committee, summoned me to his small office on Capitol Hill. After he closed the door, he took out a classified report by the CIA’s inspector general and read it aloud, slowly, as I sat next to him. He repeated passages when I asked, allowing me to transcribe the report verbatim. The report concluded that top CIA officials had impeded an internal investigation into evidence that former CIA Director John Deutch had mishandled large volumes of classified material, placing it on personal computers in his home.

The story was explosive, and it angered top CIA officials.

Several months later, Millis killed himself. His death shook me badly. I didn’t believe that my story had played a role, but as I watched a crowd of current and former CIA officials stream into the church in suburban Virginia where his funeral was held, I wondered whether I was caught up in a game that was turning deadly. (I have never before disclosed that Millis was the source for the Deutch story, but his death more than 17 years ago makes me believe there is no longer any purpose to keeping his identity a secret. In an interview for this story, Millis’s widow, Linda Millis, agreed that there was no reason to continue hiding his role as my source, adding: “I don’t believe there is any evidence that [leaking the Deutch report] had anything to do with John’s death.”)

Another painful but important lesson came from my coverage of the case of Wen Ho Lee, a Chinese-American scientist at Los Alamos National Laboratory, who in 1999 was suspected by the government of spying for China. After the government’s espionage case against him collapsed, I was heavily criticized — including in an editor’s note in the New York Times — for having written stories that lacked sufficient caveats about flaws and holes in the government’s case. The editor’s note said that we should “have pushed harder to uncover weaknesses in the FBI case against Dr. Lee,” and that “in place of a tone of journalistic detachment from our sources, we occasionally used language that adopted the sense of alarm that was contained in official reports and was being voiced to us by investigators, members of Congress and administration officials with knowledge of the case.”

In hindsight, I believe the criticism was valid.

That bitter experience almost led me to leave the Times. Instead, I decided to stay. In the end, it made me much more skeptical of the government.

* * *

2. YOU FURNISH THE PICTURES, I’LL FURNISH THE WAR

After the 9/11 attacks, the Bush administration began asking the press to kill stories more frequently. They did it so often that I became convinced the administration was invoking national security to quash stories that were merely politically embarrassing. In late 2002, for instance, I called the CIA for comment on a story about the existence of a secret CIA prison in Thailand that had just been created to house Al Qaeda detainees, including Abu Zubaydah. In response, Bush administration officials called the Times and got the paper to kill the story. I disagreed with the paper’s decision because I believed that the White House was just trying to cover up the fact that the CIA had begun to set up secret prisons. I finally reported the information a year later. (In 2014, the Senate Intelligence Committee’s report on the CIA’s torture program provided new insight into the consequences of the killed Thailand story. “In November 2002, after the CIA learned that a major U.S. newspaper knew that Abu Zubaydah was in Country [redacted], senior CIA officials, as well as Vice President Cheney, urged the newspaper not to publish the information,” the 2014 report states. “While the U.S. newspaper did not reveal Country [redacted] as the location of Abu Zubaydah, the fact that it had the information, combined with previous media interest, resulted in the decision to close Detention Site Green.”)

By 2002, I was also starting to clash with the editors over our coverage of the Bush administration’s claims about pre-war intelligence on Iraq. My stories raising questions about the intelligence, particularly the administration’s claims of a link between Iraq and Al Qaeda, were being cut, buried, or held out of the paper altogether.

One of the few stories I managed to get on the front page cast doubt on reports that an Iraqi intelligence officer had met with 9/11 plotter Mohamed Atta in Prague before the attacks on New York and Washington. But Doug Frantz, then the investigations editor in New York, felt that he had to sneak it onto Page 1. “Given the atmosphere among the senior editors at The Times, I was concerned that the story would not make it to page 1 on a day when everyone was convened around the table,” Frantz emailed me recently. “So I decided that it was too important to appear inside the paper and went ahead and offered it on a Sunday, a day when the senior editors weren’t often involved in the discussion.”

Then-Executive Editor Howell Raines was believed by many at the paper to prefer stories that supported the case for war. But Raines now says he was not pro-war, and that he did not object to putting my Prague story on the front page. “I never told anyone at any level on the Times that I wanted stories that supported the war,” he told me in an email.

Meanwhile, Judy Miller, an intense reporter who was based in New York but had sources at the highest levels of the Bush administration, was writing story after story that seemed to document the existence of Iraq’s weapons of mass destruction. Her stories were helping to set the political agenda in Washington.

Miller and I were friends — in fact, I was probably one of her closest friends in the Washington bureau at the time. In the year before 9/11, Miller worked on a remarkable series of stories about Al Qaeda that offered clear warnings about its new power and intent. In the months after 9/11, she and I both scrambled to document Al Qaeda’s role in the attacks and the counterterrorism response by the United States. We were both part of a team that won the 2002 Pulitzer Prize for Explanatory Reporting for our coverage of terrorism and 9/11.

But in the months leading up to the March 2003 invasion of Iraq, while Miller and other Times reporters were landing a string of big stories that dazzled the editors, I was getting frustrated that so few of my sources in the intelligence community were willing to talk to me about what they thought of the Bush administration’s case for war. I kept hearing quiet complaints that the White House was pressuring CIA analysts to cook the books and deliver intelligence reports that followed the party line on Iraq. But when I pressed, few were willing to provide specifics. Intermediaries would sometimes tell me that they were receiving anguished calls from CIA analysts, but when I asked to talk to them, they refused.

After weeks of reporting in late 2002 and early 2003, I was able to get enough material to start writing stories that revealed that intelligence analysts were skeptical of the Bush administration’s evidence for going to war, particularly the administration’s assertions that there were links between Saddam’s regime and Al Qaeda.

But after I filed the first story, it sat in the Times computer system for days, then weeks, untouched by editors. I asked several editors about the story’s status, but no one knew.

Finally, the story ran, but it was badly cut and buried deep inside the paper. I wrote another one, and the same thing happened. I tried to write more, but I started to get the message. It seemed to me that the Times didn’t want these stories.

What angered me most was that while they were burying my skeptical stories, the editors were not only giving banner headlines to stories asserting that Iraq had weapons of mass destruction, they were also demanding that I help match stories from other publications about Iraq’s purported WMD programs. I grew so sick of this that when the Washington Post reported that Iraq had turned over nerve gas to terrorists, I refused to try to match the story. One mid-level editor in the Washington bureau yelled at me for my refusal. He came to my desk carrying a golf club while berating me after I told him that the story was bullshit and I wasn’t going to make any calls on it.

As a small protest, I put a sign on my desk that said, “You furnish the pictures, I’ll furnish the war.” It was New York Journal publisher William Randolph Hearst’s supposed line to artist Frederic Remington, whom he had sent to Cuba to illustrate the “crisis” there before the Spanish-American War. I don’t think my editors even noticed the sign.

* * *

Just as the invasion of Iraq was about to get underway, I started working on an intriguing story that helped take my mind off my battles with the Times over pre-war intelligence.

I have to admit, it was strange doing an interview naked, but that’s what a key source demanded.

In March 2003, I flew to Dubai to interview a very nervous man. It had taken weeks of negotiations, through a series of intermediaries, to arrange our meeting. We agreed on a luxury hotel in Dubai, the modern capital of Middle Eastern intrigue.

Just before we were scheduled to meet, however, the source imposed new demands. We would have to talk in the hotel’s steam room, naked. He wanted to make sure he wasn’t being recorded. That also made it impossible for me to take notes until after our meeting.

But it was worth it. He told me the story of how Qatar had given sanctuary to Khalid Shaikh Mohammed in the 1990s, when he was wanted in connection with a plot to blow up American airliners. Qatari officials had given KSM a government job and then had apparently warned him when the FBI and CIA were closing in, allowing him to escape to Afghanistan, where he joined forces with bin Laden and became the mastermind behind the 9/11 plot.

I was later able to confirm the story, which was especially significant because Qatar was home to the forward headquarters of U.S. Central Command, the military command in charge of the invasion of Iraq.

After the story ran, I felt revitalized.

That spring, just as the U.S.-led invasion of Iraq began, I called the CIA for comment on a story about a harebrained CIA operation to turn over nuclear blueprints to Iran. The idea was that the CIA would give the Iranians flawed blueprints, and Tehran would use them to build a bomb that would turn out to be a dud.

The problem was with the execution of the secret plan. The CIA had taken Russian nuclear blueprints it had obtained from a defector and then had American scientists riddle them with flaws. The CIA then asked another Russian to approach the Iranians. He was supposed to pretend to be trying to sell the documents to the highest bidder.

But the design flaws in the blueprints were obvious. The Russian who was supposed to hand them over feared that the Iranians would quickly recognize the errors, and that he would be in trouble. To protect himself when he dropped off the documents at an Iranian mission in Vienna, he included a letter warning that the designs had problems. So the Iranians received the nuclear blueprints and were also warned to look for the embedded flaws.

Several CIA officials believed that the operation had either been mismanaged or at least failed to achieve its goals. By May 2003, I confirmed the story through a number of sources, wrote up a draft, and called the CIA public affairs office for comment.

Instead of responding to me, the White House immediately called Washington Bureau Chief Jill Abramson and demanded a meeting.

The next day, Abramson and I went to the West Wing of the White House to meet with National Security Adviser Condoleezza Rice. In her office, just down the hall from the Oval Office, we sat across from Rice and George Tenet, the CIA director, along with two of their aides.

Rice stared straight at me. I had received information so sensitive that I had an obligation to forget about the story, destroy my notes, and never make another phone call to discuss the matter with anyone, she said. She told Abramson and me that the New York Times should never publish the story.

I tried to turn the tables. I asked Tenet a few questions about the Iranian program and got him to confirm the story, and also provide some details I hadn’t heard before. The only point he disputed was that the operation had been mismanaged.

Rice argued that the operation was an alternative to a full-scale invasion of Iran, like the war that President George W. Bush had just launched in Iraq. “You criticize us for going to war for weapons of mass destruction,” I recall her saying. “Well, this is what we can do instead.” (Years later, when Rice testified in the Sterling trial, a copy of the “talking points” she had prepared for our meeting was entered into evidence, though I don’t remember her actually saying many of these things.)

Abramson told Rice and Tenet that the decision on whether to run the story was up to Times Executive Editor Howell Raines. After the meeting, Abramson and I stopped for lunch. We were both stunned by the full-court press we had just endured. But I also recognized that I had just gotten high-level confirmation for the story — better confirmation than I could ever have imagined.

Just after Abramson and I met with Tenet and Rice, the Jayson Blair scandal erupted, forcing Raines into an intense battle to save his job. Blair may have been the immediate cause of the crisis, but among the staff at the Times, Blair was merely the trigger that allowed resentment that had built up against Raines over his management style to come out into the open.

Abramson recalls that after our meeting with Rice, she took the Iran story to both Raines and then-Managing Editor Gerald Boyd. “They gave me a swift no” about publishing the story, Abramson told me recently. She said that she told Raines and Boyd that Rice was willing to discuss the story with them on a secure phone line that they could use from a facility on Manhattan’s East Side, but she says they never asked to take that step, and she didn’t push them to do so. Raines disputes this. “I was not informed of this meeting [with Rice and Tenet], nor do I recall being involved with your story in any way,” he said in an email. (Boyd died in 2006.)

Raines left the paper in early June 2003. Joe Lelyveld, the retired executive editor, briefly came back to run the Times on an interim basis. I talked to him by phone about the Iran story, but he didn’t really have time to deal with it.

When Bill Keller was named executive editor in the summer of 2003, he agreed to discuss the story with Abramson and me. Abramson, meanwhile, had been promoted to managing editor, Keller’s No. 2. After I went over the story with him, Keller decided not to publish it. I tried over the next year to get him to change his mind, but I couldn’t.

The spiking of the Iran story, coming so soon after the internal fights over WMD coverage, left me depressed. I began to think about whether to write a book that would include the Iran story and document the war on terror more broadly in a way I didn’t believe I had been able to do in the Times.

The Bush administration was successfully convincing the press to hold or kill national security stories, but the government had not yet launched an aggressive campaign to hunt down whistleblowers and target reporters. That all changed with the Valerie Plame case.

In December 2003, the Justice Department appointed Patrick Fitzgerald, then the U.S. attorney in Chicago, to be a special counsel to investigate allegations that top Bush White House officials had illegally leaked Plame’s covert identity as a CIA officer. Critics claimed that the Bush White House had sold her out to the press as retribution against her Iraq war critic husband, former U.S. diplomat Joseph Wilson.

Without thinking about the long-term consequences, many in the media cheered Fitzgerald on, urging him to aggressively go after top Bush administration officials to find out who was the source of the leak. Anti-Bush liberals saw the Plame case and the Fitzgerald leak investigation as a proxy fight over the war in Iraq, rather than as a potential threat to press freedom.

Fitzgerald, an Inspector Javert-like prosecutor whose special counsel status meant that no one at the Justice Department could rein him in, started subpoenaing reporters all over Washington and demanding they testify before a grand jury.

There was hardly a murmur of dissent from liberals as Fitzgerald pressed one prominent reporter after another for information. Only Judy Miller went to jail rather than cooperate. (She eventually testified after she received a waiver from her source, I. Lewis “Scooter” Libby, a top aide to Vice President Dick Cheney.)

Fitzgerald became famous as a tough, no-nonsense prosecutor, and the fact that he had run roughshod over the Washington press corps didn’t hurt his reputation. He went on to become a partner in one of America’s premier law firms.

The Plame case eventually faded away, but it had set a dangerous precedent. Fitzgerald had successfully subpoenaed reporters and forced them to testify and in the process, had become the Justice Department’s biggest star. He had demolished the political, social, and legal constraints that previously made government officials reluctant to go after journalists and their sources. He became a role model for career prosecutors, who saw that you could rise to the top of the Justice Department by going after reporters and their sources.

White House officials, meanwhile, saw that there wasn’t as much political blowback from targeting reporters and conducting aggressive leak investigations as they had expected. The decadesold informal understanding between the government and the press — that the government would only go through the motions on leak investigations — was dead.

3. STELLAR WIND

In the summer of 2003, the New York Times named a new Washington bureau chief: Philip Taubman, an old friend of Bill Keller’s. Taubman had been the Times’s Moscow bureau chief when Keller won a Pulitzer Prize as a correspondent there. Now Taubman was Keller’s man in Washington.

Taubman and I developed a friendly relationship. He had covered national security and intelligence matters earlier in his career, and he seemed eager for scoops. But by 2004, I began to disagree with some of his decisions. That spring, I learned that the Bush administration had discovered that Ahmad Chalabi, the neoconservatives’ golden boy in Iraq, had told an Iranian intelligence official that the National Security Agency had broken Iranian codes.

That was a huge betrayal by the man some senior Bush administration officials had once considered installing as the leader of Iraq. But after I called the CIA and NSA for comment, NSA Director Michael Hayden called Taubman and asked him not to run the story. Hayden argued that even though Chalabi had told the Iranians that the U.S. had broken their codes, it wasn’t clear the Iranians believed him, and they were still using the same communications systems.

Taubman agreed, and we sat on the story until the CIA public affairs office called and told him that someone else was reporting it, and that we should no longer feel bound not to publish. I was upset that I had lost an exclusive, and I believed that Hayden’s arguments against publication had been designed simply to save the White House from embarrassment over Chalabi.

In the spring of 2004, just as the Plame case was heating up and starting to change the dynamics between the government and the press, I met with a source who told me cryptically that there was something really big and really secret going on inside the government. It was the biggest secret the source had ever heard. But it was something the source was too nervous to discuss with me. A new fear of aggressive leak investigations was filtering down. I decided to stay in touch with the source and raise the issue again.

Over the next few months, I met with the source repeatedly, but the person never seemed willing to divulge what the two of us had begun to refer to as “the biggest secret.” Finally, in the late summer of 2004, as I was leaving a meeting with the source, I said I had to know what the secret was. Suddenly, as we were standing at the source’s front door, everything spilled out. Over the course of about 10 minutes, the source provided a detailed outline of the NSA’s massive post-9/11 domestic spying program, which I later learned was code-named Stellar Wind.

The source told me that the NSA had been wiretapping Americans without search warrants, without court approval. The NSA was also collecting the phone and email records of millions of Americans. The operation had been authorized by the president. The Bush administration was engaged in a massive domestic spying program that was probably illegal and unconstitutional, and only a handful of carefully selected people in the government knew about it.

I left that meeting shocked, but as a reporter, I was also elated. I knew that this was the story of a lifetime.

The NSA had lived by strict rules against domestic spying for 30 years, ever since the Church Committee investigations of intelligence abuses in the 1970s had led to a series of reforms. One reform measure, the Foreign Intelligence Surveillance Act of 1978, made it illegal for the NSA to eavesdrop on Americans without the approval of a secret FISA court. My source had just revealed to me that the Bush administration was secretly ignoring the law requiring search warrants from the FISA court.

I quickly began to think about how I could confirm the story and fortunately found the right person, a source who didn’t usually like to volunteer much information but was sometimes willing to confirm things I had heard elsewhere. As we sat alone in a quiet bar, I told the source what I had heard about the NSA program, and it was immediately clear that the source knew the same secret and was troubled by it.

The source explained many of the technical details of the Bush administration’s secret NSA domestic spying program to me, describing how the NSA had latched onto giant gateway switches along the borders between the domestic and international telecommunications networks, so it could vacuum up all international phone traffic and email messages sent or received by Americans.

As I worked to find more people to talk to about the story, I realized that the reporter sitting next to me in the Washington bureau, Eric Lichtblau, was hearing similar things. Lichtblau covered the Justice Department. When he first came to the paper in 2002, I had been jealous of his abilities as a reporter, especially his success at developing sources. I sometimes let my resentment get the better of me; I recall one meeting with Abramson in which I was openly dismissive of an exclusive story Lichtblau was working on. But he never held it against me, and we struck up a friendship and started working on stories together.

Lichtblau had heard from a source that something potentially illegal was going on at DOJ, that officials seemed to be ignoring the law requiring warrants for national security wiretaps, and that Attorney General John Ashcroft might be involved.

Lichtblau and I compared notes, and we realized we were probably hearing about the same story. We decided to work together.

We both kept digging, talking to more people. We started doing some interviews together and discovered that we had very different reporting styles. While I liked to let a source talk about whatever was on their mind, Lichtblau liked to get right to the point, and sometimes badgered sources to cough up information. Our approaches were complementary, and we inadvertently developed a good cop-bad cop routine. Lichtblau would often give our sources colorful nicknames, which made it easier for us to talk without revealing their identities. He called one early source on the NSA story “Vomit Guy” because when he told the source what he wanted to talk about, the source told Lichtblau he was so upset about the topic that he wanted to throw up.

By the fall of 2004, we had a draft of a story. I felt it was time to go through the front door, so I decided on impulse to try to bluff my way to the top of the NSA. I called the NSA’s press spokesperson, Judy Emmel, and told her I had to talk to Hayden immediately. I said it was urgent, and I couldn’t tell her what it was about.

She got Hayden on the phone right away. I was shocked that my bluff had worked, but now that I had Hayden, I had to think fast about what I wanted to ask him. I decided to read him the first few paragraphs of the draft Lichtblau and I were writing. Lichtblau was sitting next to me, staring intently as I read Hayden the top of the story on the phone. I was sitting in front of my computer, ready to transcribe whatever Hayden would say.

After I read the first few paragraphs, Hayden let out an audible gasp and then stammered for a moment. Finally, he said that whatever the NSA was doing was legal and operationally effective. I pressed him further, but he refused to say more and hung up.

Hayden had all but confirmed the story. It seemed obvious from his response that he knew exactly what I was talking about and had begun to defend his actions before deciding to end the conversation. After explaining to Lichtblau what Hayden had just said, I walked over to Taubman’s office to tell him the news. “I thought it was a terrific scoop, but knew we would be faced with some tough questions about whether publication might undermine U.S. efforts to prevent another 9/11 style attack,” Taubman emailed me recently.

Within days, Hayden called Taubman and asked him not to run the NSA story. Taubman listened, but was noncommittal. That was the beginning of what turned out to be more than a year of negotiations between the Times and the Bush administration, as officials repeatedly sought to kill the NSA story.

A few days later, Taubman and I went to the Old Executive Office Building, next to the White House, to meet with acting CIA Director John McLaughlin, who had recently replaced Tenet, and McLaughlin’s chief of staff, John Moseman. We met them in the office the CIA director maintains in the OEB to be close to the White House. The meeting, the first of many between the Times and the government over the NSA story, was odd. In contrast to my meeting with Tenet and Rice on the Iran story, when they had confirmed the story while asking the paper to kill it, McLaughlin and Moseman refused to acknowledge that the NSA story was true, even as they asked us not to print it. They kept speaking in hypothetical terms, saying that if such a program existed, it would be important to the United States that it remain secret, and American newspapers shouldn’t report on such things.

I had now been through this routine with the Bush administration several times, and their dire warnings about national security no longer impressed me. They had cried wolf too many times to be credible.

Taubman didn’t give them an answer about whether the Times would publish the story, telling them it would be up to Keller. He also demanded that they warn us if they found out any other news organization was onto the same story.

In his 2016 memoir, “Playing to the Edge: American Intelligence in the Age of Terror,” Hayden recalls that what he had heard from McLaughlin and Moseman convinced him that he could negotiate with Taubman, but not with me. “Taubman seemed to be thoughtful and reflective throughout. Risen was described as obnoxious, argumentative, and combative, commenting only to rebut with a constant theme of the public’s right to know,” Hayden writes. “Contemporaneous notes indicated that Taubman understood the seriousness of the question, while Risen doesn’t give a shit, frankly.” Hayden writes that as a result of that assessment, “we became pretty forthcoming — with Taubman.”

As Lichtblau and I continued to report, we realized that we had to get a better understanding of how American and international telecommunications networks worked. I spent a day in the library at Georgetown University, poring over technical journals and academic works on the telecommunications industry. I called AT&T’s headquarters and told the company’s spokesperson I was interested in learning more about the infrastructure of the telephone system, particularly the big switches that brought telephone and internet traffic into the United States. I did not tell the spokesperson why I was taking an interest in such an arcane issue, other than that it was for a story in the New York Times.

At first, the spokesperson was very friendly and cooperative, and said he would be happy to have me talk with some of AT&T’s technical experts, adding that he might be able to arrange a tour of their facilities. But I never heard from him again. I called back several times, but he didn’t return my calls. I finally figured that someone from the Bush administration had admonished AT&T not to talk to me.

During October 2004, Lichtblau and I kept reporting and writing. We sometimes wrote at my house outside Washington, taking breaks to watch the epic baseball playoffs between the Boston Red Sox and New York Yankees. Rebecca Corbett, our editor in the Washington bureau, had been working with us on the story.

We were operating against the backdrop of the 2004 presidential race between George W. Bush and John Kerry. With a week or two to go before the election, Lichtblau and I, along with Corbett and Taubman, went to New York for a meeting with Keller and Abramson to decide whether the story would be published.

We sat in the back alcove of Keller’s office in the old Times building on 43rd Street. It was a comfortable, book-lined nook that I had visited once before, when I had tried to get Keller to change his mind and publish the long-spiked CIA-Iran story. Lichtblau, Corbett, and I argued strongly that the NSA story should be published.

In that small room, we launched into an intense debate over whether to publish the story, dominated by the inherent tension between national security and the public’s right to know. A key issue was the legality of the NSA program. Keller seemed skeptical of our sources’ arguments that the program was illegal and possibly unconstitutional. There were some tense exchanges.

I told Keller I thought this was the kind of story that had helped make the New York Times great in the 1970s, when Seymour Hersh had uncovered a series of intelligence abuses. Keller seemed unimpressed; as I recall, he called the comparison between the NSA story and Hersh’s earlier work “facile.” (I don’t think my comment was facile, but it was probably arrogant.)

As the meeting wore on and Keller was unconvinced by each reason we gave for running the story, I grew more desperate to find some argument that might change his mind. Finally, I said that if we didn’t run the story before the election, a key source might go elsewhere and another news outlet might publish it.

That was exactly the wrong thing to say to Keller. He got his back up, wondering aloud whether the source had a political agenda. He said he wouldn’t be pressured into running the story before the election because he didn’t want to let the potential political impact affect his journalistic decision. I pointed out that if he decided not to run the story before the election, that would also have an impact, but he seemed to ignore my comment.

By the end of the meeting, he said he had decided not to run the story. In a recent interview, Keller acknowledged that my telling him that a source might go elsewhere with the story influenced his decision. “That set off alarm bells in my head,” Keller recalled, adding that he thought “we have a critical source with an animus.”

Keller now also says that the overall climate in the country in 2004 provides important context for his decision not to run the story. In a 2013 interview with then-Times Public Editor Margaret Sullivan, he expanded on that, saying that “three years after 9/11, we, as a country, were still under the influence of that trauma, and we, as a newspaper, were not immune. It was not a kind of patriotic rapture. It was an acute sense that the world was a dangerous place.”

Keller’s rejection was a setback. But after the election, Lichtblau and I convinced the editors to let us start working on the story again. As we looked for more sources, we began to feel the chilling effect of the government’s new approach to leak investigations. Within the small group of people in the government who knew about the NSA program, many also knew by now that we were investigating it and were afraid to talk to us. On a snowy night in December 2004, we drove to the home of one official who Lichtblau believed knew about the NSA program. When the official opened the door, he recognized Lichtblau and quickly realized why we were there. He started berating us for showing up unannounced, told us to leave immediately, and shut the door. He seemed worried that someone might have seen us outside his house.

The paper once again began meetings with top administration officials who wanted to stop us from running the story. In the weeks after the election, Lichtblau, Taubman, and I went to the Justice Department to meet with Deputy Attorney General James Comey and White House Counsel Alberto Gonzales. Ashcroft had just resigned, and while it had not yet been announced, it was clear that Gonzales was about to replace him as attorney general. Now it was up to Gonzales to convince us to kill the story.

But once the meeting started, Gonzales barely said anything; it seemed that the administration was temporarily happy to have gotten through the election without our story being published, and the tone in the room was more relaxed than usual. Comey did most of the talking. While he admitted that he had some qualms about the program, he kept insisting that it was too important to publicly disclose and that we shouldn’t run our story. (Comey did not reveal that he and several other top Justice Department officials, along with then-FBI Director Robert Mueller, had nearly resigned over certain aspects of the program earlier in 2004.)

Meanwhile, Hayden, who clearly had decided to make Taubman the focus of his lobbying campaign to stop the Times from publishing the story, invited him, but not Lichtblau or me, to NSA headquarters and allowed Taubman to talk with NSA officials directly involved in the domestic spying program. Afterward, Taubman told Lichtblau and me that he couldn’t tell us what he had learned. Today, Taubman says Hayden’s purpose “was to read me into the program on an off-the-record basis so I would have a better understanding of how it worked and why disclosure of it would be damaging to U.S. national security.”

“When I returned to the bureau, I recall that Eric and you, not surprisingly, were eager to hear about the meeting,” Taubman told me in an email. “I described my visit in general, but said I had agreed not to tell anyone about the technical details I had learned, but would employ my knowledge by telling you if I saw anything in your draft story that I thought was incorrect.”

Keller now says that Taubman’s relationship with Hayden played an important role in the decision to not run the story. “Certainly one factor was that Taubman knew Hayden pretty well, and he trusted him,” Keller told me. “Hayden invited Taubman out to where the guys were actually doing the NSA program. When somebody gives you that kind of access and says lives will be at risk, you take them seriously.”

Meanwhile, the White House decided to enlist members of the “Gang of Eight,” the handful of congressional leaders who had been secretly briefed on the program while the rest of Congress was kept in the dark. Then-Rep. Jane Harman, the ranking Democrat on the House Intelligence Committee, called Taubman and made the case that the New York Times should not run the story.

When I asked Taubman about this recently, he suggested that Harman’s call came as a result of his discussions with the government. Taubman recalls telling either Hayden or Rice that the Times needed to hear from the leaders of the congressional intelligence committees who knew about the program. “Jane Harman agreed to talk to me, on the condition that the call be off-the-record. She told me that she and her colleagues, Democrat and Republican, strongly supported the NSA effort and requested that the [Times] not disclose it.”

By mid-December 2004, the story had been re-reported, so Lichtblau, Corbett, and I began pushing again to get it into the paper.

Instead of traveling to New York this time, we held a series of closed-door meetings with Taubman in his office in Washington. The additional reporting and rewriting did not sway him. He accepted the Bush administration’s arguments that the piece would harm national security. He killed the story. This time, Keller was not directly involved in our meetings. The NSA story now seemed permanently dead.

I was about to start a long-scheduled leave to write a book about the CIA and the Bush administration. I was furious that the Times had killed both the Iran and the NSA stories, and angry that the White House was successfully suppressing the truth. I told myself that if I kept going along with decisions to cut, bury, or outright kill so many stories, as I had the last few years, I wouldn’t be able to respect myself.

I decided to put the Iran and the NSA stories in my book. I was pretty sure that meant I would be fired from the Times. It was nerve-wracking, but my wife, Penny, stood firm. “I won’t respect you if you don’t do it,” she told me. That sealed my decision.

Throughout early 2005, I worked at home on “State of War,” which was scheduled to be published by Free Press, an imprint of Simon and Schuster, in early 2006. After I wrote the chapter about the NSA domestic spying program, I called Lichtblau and asked him to come to my house. When he arrived, I told him to sit down, read the chapter, and let me know whether it was OK to put the story in my book. After he finished reading, he joked that I had buried the lede, but I sharply reminded him that writing a book was different from writing a news story. He gave his approval to include it in the book, since he knew the story was dead at the Times. He only asked that I mention him by name in the chapter — and spell his name correctly.

While I was on book leave, Lichtblau was in an agonizing position. Barred by his editors from working on the NSA story, he was instead assigned to cover the debate in Congress over the reauthorization of the Patriot Act. But Lichtblau knew that the debate over how to strike the proper balance between national security and civil liberties was a charade so long as the existence of the NSA’s domestic spying program was hidden from public view. The White House allowed Congress to publicly debate the balance, even while George W. Bush had already secretly decided what that balance would be. “Knowing about the NSA program, I found it increasingly awkward to write about all the back-and-forth haranguing with a straight face,” Lichtblau later wrote in his 2008 book, “Bush’s Law: The Remaking of American Justice.” “After getting back to the office from one congressional hearing that I covered on the Patriot Act that spring of 2005, I walked straight over to Rebecca Corbett’s desk in frustration to suggest that maybe someone else should cover the whole debate in Congress; in light of what we knew, I told her, I no longer felt comfortable covering what seemed a bit like a Washington game of three-card monte. … I was stuck on the story.”

While covering one congressional hearing, Lichtblau listened as Harman called for tighter restrictions on the Patriot Act to prevent abuses of civil liberties. Lichtblau knew that Harman had been briefed on the NSA program and had called the Times to kill our story, so he followed her out into the hall to talk about it. But when he asked her how she could square her demands for limits on the Patriot Act with what she knew about the NSA program, Harman chided him for raising the matter. “Shooing away her aides, she grabbed me by the arm and drew me a few feet away to a more remote section of the Capitol corridor,” he wrote in his book. “‘You should not be talking about that here,’ she scolded me in a whisper. ‘They don’t even know about that,’ she said, gesturing to her aides, who were now looking on at the conversation with obvious befuddlement. ‘The Times did the right thing by not publishing that story.’”

I returned from book leave in May 2005 and finished my manuscript later that summer. In the late summer or early fall, after I turned in the last chapters to my publisher and the editing process at Free Press was virtually complete, I decided to let the Times know what I was doing.

I emailed Jill Abramson, who by then was in New York, and told her that I was putting the NSA and the Iran stories in my book.

The reaction was swift. Within minutes, Taubman was standing near my desk, grimly demanding to talk. We went into his office. He said firmly that I was being insubordinate and rebelling against the editorial decisions of the Times.

“My view was that you and The Times had joint ownership of the story, that the top news executives, after careful consideration, had decided to hold the story, and that you did not have a unilateral right to publish it in your book,” Taubman recalled recently. “At the time, I was concerned that you were moving ahead with a volatile decision you had made absent consultation with me or Bill.”

Taubman also recalls that he was angry because he believed I had misled him before I went on book leave into thinking I was going to write a biography of George Tenet. He’s probably right.

He wanted me to take the NSA story out of my book. I responded that I wanted the NSA story to be published both in the Times and in my book.

We began to talk almost every day about how to resolve our impasse. Initially, I suggested the paper run the NSA story when my book came out, under the kind of arrangement that the Washington Post seemed to have with Bob Woodward. The Post regularly excerpted Woodward’s books on its front page, giving the paper Woodward’s scoops and his books enormous publicity.

That proposal went nowhere. Eventually, Taubman countered that the paper would only consider running the NSA story if I first agreed to remove it from my book and thus, give the paper the chance to reconsider its publication without any undue pressure. But I knew the only reason the Times would even consider running the NSA story was if I kept it in my book.

We were at loggerheads, and the clock was ticking toward the January 2006 publication of “State of War.” When I told Lichtblau what was going on, he joked, “You don’t just have a gun to their heads. You’ve got an Uzi.”

While researching this personal account, I was surprised to learn that Abramson recalls that my email to her was not what started a debate among the Times senior editors about what to do about the NSA story and my book. Abramson says that by the time I emailed her, she already knew that I was putting the NSA story in my book. She says that another reporter in the Washington bureau had told her earlier that I was going to do it, and she had already told Bill Keller about my plans. She said she told Keller that “they would look like idiots” if they still were holding the story when it appeared in my book. “The classified program will be known publicly when Jim’s book is published anyway. So what could possibly be the point of continuing to hold it?” Abramson recalls telling him. “I had previously revisited publishing with Keller once or twice — maybe more,” Abramson told me recently. “I wanted the story published.”

Besides Eric Lichtblau, the Times’s top editors, and me, only a few people at the paper knew about the NSA story or the intense debate underway over whether to publish it. Lichtblau and I would sometimes walk around nearby Farragut Square when we wanted to speak in confidence. In front of most other reporters and editors in the office, I tried to act as if nothing unusual was going on, but I’m sure a few suspected something was up.

 

That fall, I became so concerned that the Times would not run the NSA story and that I would be fired that I secretly met with another national news organization about a job. I told a senior editor there that I had a major story that the Times had refused to run under pressure from the White House. I didn’t tell him anything about the story, but I said if they hired me, I would give the story to them. The senior editor replied that their publication would never run a piece if the White House raised objections on national security grounds. I left that meeting more depressed than ever.

After a long series of contentious conversations stretching over several weeks in the fall of 2005, I finally reached an uneasy compromise with the editors. They would let Lichtblau and me start working on the NSA story again, and the paper would resume talks with the Bush administration over whether to publish it. But if the paper once again decided not to run the story, I had to take it out of my book. I agreed to those conditions, but I secretly knew that it was already too late to take the chapter out of my book, and I had no intention of doing so. I was gambling that the Times would run the story before the book was published. But I also knew that if the editors didn’t run it, I would probably be out of a job.

Curiously, the Times editors seemed to shrug off the Iran story, even though they knew it was going to be in the book too. Maybe the NSA story was fresher in their minds. We didn’t have any significant discussions about whether to publish the Iran story in the paper, and the editors never complained to me about my decision to publish it in my book. (In 2014, Jill Abramson said in an interview with “60 Minutes” that she regretted that she didn’t push harder to get the Times to publish the CIA-Iran story.)

The editors began a new round of meetings with Bush administration officials, who were apparently surprised that the Times was resurrecting the NSA story. I was excluded from these conversations. In each of the meetings in which they sought to convince the editors not to run the story, Bush administration officials repeatedly said the NSA program was the crown jewel of the nation’s counterterrorism programs, and that it saved American lives by stopping terrorist attacks.

The meetings dragged on through the fall of 2005. Michael Hayden, now the principal deputy director of the Office of National Intelligence, often took the lead, and continued to meet with Philip Taubman. In one meeting, Taubman and Bill Keller received a secret briefing in which officials described the counterterrorism successes of the program. But when the two editors returned to the Washington bureau, they told Lichtblau and me that their briefing was off the record and so secret that they couldn’t share what they’d heard.

Lichtblau and I eventually realized that Bush administration officials had been misleading Keller and Taubman. The officials had told them that under the NSA’s secret domestic spying program, the agency didn’t actually listen to any phone calls or read any emails without court-approved search warrants.

They had insisted that the agency was only vacuuming up metadata, obtaining phone calling logs and email addresses. The content of the phone calls and email messages was not being monitored, the officials had told the editors. That was not true, but the government had been trying to convince Keller and Taubman that Lichtblau and I had been exaggerating the scope of the story.

It took time, but Lichtblau and I were finally able to persuade Keller and Taubman that they had been misled. In our recent interview, Keller said that once he realized the administration had been disingenuous with him, he started to change his mind about publishing the story.

It was also critically important that Lichtblau had developed a new source who said that some Bush administration officials had expressed fears that they might face prosecution for their involvement in the secret NSA spying operation. There had also been an intense debate at the highest levels of the Bush administration about the legality of some aspects of the program. That raised fundamental questions about the reassurances the Times editors had received from administration officials about the program’s standing.

In the late fall of 2005, I also got an important lead from a new source, but the tip was so cryptic I didn’t know what to make of it at the time. It came when a senior official agreed to see me, but only on the condition that our interview be conducted with other officials present. During that meeting, the official repeatedly and loudly expressed total ignorance of any secret NSA domestic spying program.

But as I was leaving and stood up to shake hands, the official pulled me close and whispered, so quietly that none of the others in the room could hear, “Check out when Ashcroft was sick.”

Lichtblau and I struggled for weeks to figure out what that tip meant.

By late November 2005, Keller seemed to be leaning toward publishing the NSA story, but the editors were moving so slowly that I was getting nervous that they wouldn’t make up their minds before my book came out in January. I was more anxious than I had ever been in my life. I couldn’t sleep and began to develop high blood pressure. I tried to distract myself by going to the movies, but I was so stressed that I would usually walk out after five or 10 minutes. I also had to keep meeting with key sources on the NSA story to persuade them to stick with me and not take the story elsewhere. I urged them to be patient, though I was running out of patience myself. During meetings on the NSA story with Lichtblau and Rebecca Corbett, I was so fatigued and stressed that I would often lie down and shut my eyes on the couch in Corbett’s office.

With the clock ticking and the publication of my book looming, Taubman asked me to arrange a new round of meetings with the very few Democratic congressional leaders who knew about the NSA program. He wanted them to tell him that it was OK to run the story. Both Lichtblau and I found this request troubling.

I met with one Democrat who agreed to call Taubman, but the congressperson only told him the story was accurate, not whether the Times should run it. Taubman wanted more, so I went to see Nancy Pelosi, then the House minority leader, who had previously been the ranking Democrat on the House Intelligence Committee. After she read the story, I asked her if she would call Taubman. Without confirming the story, she said simply, “The New York Times is a big institution. It can make its own decisions.”

Then, after one final round of meetings with the White House in early December, Keller said he had decided to run the story. He called the White House and told them his decision. President Bush then called Arthur Sulzberger, the Times’s publisher, and asked for a personal meeting and a chance to convince Sulzberger to overrule Keller.

It was intimidating stuff, but I was confident that Sulzberger would view this as a chance to live up to the legacy of his father, who had published the Pentagon Papers in the face of threats from the Nixon White House.

Sulzberger, Keller, and Taubman went to the Oval Office to meet Bush. Lichtblau and I were not invited to the meeting and were not even allowed to meet with Sulzberger to brief him on the story beforehand.

Keller later said that Bush told Sulzberger he would have “blood on your hands” if he published the NSA story. Keller also said the meeting didn’t change his or Sulzberger’s minds about publishing the story.

Keller and the other editors began to express confidence that the story would run, yet there was still no date for publication. In fact, the White House was trying to schedule more meetings with the editors to try one last time to change their minds. I was frantic; it was December, my book was coming out in early January, and the story still hadn’t run in the Times.

Finally, Lichtblau came in with new information that prompted the Times to publish the story. Just days after the Bush-Sulzberger Oval Office meeting, a source told Lichtblau that the White House had considered getting a court-ordered injunction to prevent the Times from publishing the story. This was electric news, because the last time that had happened at the Times was during the Pentagon Papers case in the 1970s, one of the most important events in the history of the newspaper. The debate about whether to run the story was over. By that afternoon, the piece was ready to go.

But there was one last thing: Keller included a line in the story saying that the article had been held for a year at the request of the Bush administration, which had argued it would harm national security. The final version of the story stated: “The White House asked The New York Times not to publish this article, arguing that it could jeopardize continuing investigations and alert would-be terrorists that they might be under scrutiny. After meeting with senior administration officials to hear their concerns, the newspaper delayed publication for a year to conduct additional reporting.”

We had one advantage over the Times of the early 1970s during the Pentagon Papers crisis, and that was the internet. It would be much more difficult for the White House to go to court to stop publication because we could quickly put the story online. So soon after Keller called the White House to tell them the story was running, the NSA story was posted on the New York Times website. It ran on the front page on December 16, 2005.

Lichtblau, Corbett, Taubman, and I sat in Taubman’s office, listening over a speaker phone as Keller made the final decision to post the story. As the call with Keller ended, I let out a long sigh. Taubman looked at me. “What’s wrong?” he asked.

“Nothing. I’m just relieved.”

In the years since, Taubman has reconsidered his decision-making on the NSA story, notably because of the leaks of NSA documents by former NSA contractor Edward Snowden, which revealed in greater detail the massive scale of the domestic surveillance operation. In the wake of Snowden’s revelations, Taubman told Sullivan, the public editor, that his views had changed: “I would have made a different decision had I known that Jim and Eric were tugging on a thread that led to a whole tapestry.” (Ironically, the fact that the Times held the NSA story for more than a year convinced Edward Snowden not to come to the paper with his trove of documents when he became a whistleblower.)

Today, Keller defends his handling of the NSA story — both in 2004 and in 2005 — and reflects that one factor was the changing climate in the country, which had soured on Bush, the war in Iraq, and the war on terror. “I’m pretty comfortable both with the decision not to publish and the decision to publish,” he told me recently.

Keller decided to give the story only a one-column headline. As Lichtblau wrote in his book, “Keller had decided he didn’t want it to look like we were poking the White House in the eye with a big, screaming headline about NSA spying; we wanted to be discreet, he said, and the story would speak for itself.”

I didn’t care about the lack of a banner headline. My game of chicken with the Times was over, and I felt like I had won.

* * *

Continue reading at the Intercept

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Bannon Goes Nuclear: Calls Don Jr. Meeting In Trump Tower “Treasonous”

The ongoing feud between Steve Bannon and various members of Trump’s inner circle, including family members Jared Kushner and Donald Trump Jr., is hardly a secret (we wrote about it here: Steve Bannon In “Self-Imposed Exile” After Disputes With Trump’s Inner Circle).  But, if The Guardian‘s reporting on excerpts from an explosive new book penned by Michael Wolff are even directionally accurate, then Bannon has just taken his White House feud to a whole new level.

According to The Guardian, which apparently got its hands on a copy of “Fire and Fury” ahead of its expected release next week, Bannon unloads on Don Jr. and Kushner saying that their meeting with Russian lawyer Natalia Veselnitskaya at Trump Tower in New York was “treasonous” and/or “unpatriotic” and the FBI should have been called immediately.

Donald Trump’s former chief strategist Steve Bannon has described the Trump Tower meeting between the president’s son and a group of Russians during the 2016 election campaign as “treasonous” and “unpatriotic”, according to an explosive new book seen by the Guardian.

The meeting was revealed by the New York Times in July last year, prompting Trump Jr to say no consequential material was produced. Soon after, Wolff writes, Bannon remarked mockingly: “The three senior guys in the campaign thought it was a good idea to meet with a foreign government inside Trump Tower in the conference room on the 25th floor – with no lawyers. They didn’t have any lawyers.

“Even if you thought that this was not treasonous, or unpatriotic, or bad shit, and I happen to think it’s all of that, you should have called the FBI immediately.”

Bannon went on, Wolff writes, to say that if any such meeting had to take place, it should have been set up “in a Holiday Inn in Manchester, New Hampshire, with your lawyers who meet with these people”. Any information, he said, could then be “dump[ed] … down to Breitbart or something like that, or maybe some other more legitimate publication”.

Steve Bannon

Bannon goes on to say that Trump’s repeated messaging that the Mueller probe will come to a quick end are nothing more than wishful thinking and that money laundering investigations will ultimately ensnare not only Paul Manafort but Don Jr. and Jared Kushner as well. 

Bannon has criticised Trump’s decision to fire Comey. In Wolff’s book, obtained by the Guardian ahead of publication from a bookseller in New England, he suggests White House hopes for a quick end to the Mueller investigation are gravely misplaced.

“You realise where this is going,” he is quoted as saying. “This is all about money laundering. Mueller chose [senior prosecutor Andrew] Weissmann first and he is a money-laundering guy. Their path to fucking Trump goes right through Paul Manafort, Don Jr and Jared Kushner … It’s as plain as a hair on your face.”

Last month it was reported that federal prosecutors had subpoenaed records from Deutsche Bank, the German financial institution that has lent hundreds of millions of dollars to the Kushner property empire. Bannon continues: “It goes through Deutsche Bank and all the Kushner shit. The Kushner shit is greasy. They’re going to go right through that. They’re going to roll those two guys up and say play me or trade me.”

Scorning apparent White House insouciance, Bannon reaches for a hurricane metaphor: “They’re sitting on a beach trying to stop a Category Five.”

Meanwhile, Trump is not spared in the new book either. According to The Guardian, Wolff writes that Thomas Barrack Jr, the billionaire founder of Colony Capital who counts himself as one of Trump’s earliest supporters, allegedly told a friend: “He’s not only crazy, he’s stupid.”

All of which should make for some very entertaining Trump tweets once the book drops next week.

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Manufacturing Rebounds In December As New Orders Hit 13 Year High

Following Markit’s Manufacturing PMI’s surge to the highest since March 2015, ISM Manufacturing for December rebounded after two down-months as Prices Paid and New Orders spiked (but employment dropped).

 

 

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The Breakdown shows a massive spike in new orders and prices but a drop in employment…

 

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Respondents remain exuberant:

  • “Our business is moving higher into the new year. Increased sales are resulting in increased purchases of CapEx and raw materials.” (Chemical Products)
  • “Strong international sales — Europe and Australia — versus last two years. U.S. sales continue to grow. Seeing commodity pricing pressures.” (Machinery)
  • “We are seeing a ramp-up with companies releasing early 2018 spend now.” (Computer & Electronic Products)
  • “Business conditions are good; we are tracking well to our projections for the year.” (Miscellaneous Manufacturing)
  • “First quarter 2018 probably will be better than the fourth quarter 2017.” (Fabricated Metal Products)
  • “Domestic and international sales on the rise.” (Transportation Equipment)
  • “Economy [is] strong and business is strong, yet signals of headwinds in 2018 are persistent.” (Food, Beverage & Tobacco Products)
  • “All suppliers are reporting strong business activity and difficulties obtaining qualified employees.” (Paper Products)
  • “Demand at this time is strong in the construction part of our business. I think it is due to the impact of the hurricanes and the rebuild and new construction that is required.” (Plastics & Rubber Products)

New Orders soared to their highest level since Jan 2004…

 

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But employment tumbled?

 

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The second time I went broke

A looong time ago, back when I must have been around 25 or so, I launched my first really BIG deal.

It was the first time in my life that investors were backing me in a deal worth more than $1 million… which at the time seemed like an unfathomable amount of money.

Now, to be perfectly blunt, I was in way over my head. I simply hadn’t yet developed the skills to make the project a success.

But hey, I was 25, so I thought I knew everything.

Needless to say the project was a miserable failure and suffered an enormous loss.

The only thing I did right was that, after the deal failed, I reached into my pocket and made all the investors whole so that they didn’t lose a single penny. I took the entire loss myself.

But it completely wiped me out (sadly not the first time I lost everything).

In my newfound poverty, I had plenty of time to reflect on where things went wrong. And there was no avoiding the uncomfortable reality that I was solely to blame.

It was a gut-wrenching and expensive lesson. Learning from one’s mistakes often is.

But I did learn, eventually acquiring and mastering the skills that I obviously lacked, ultimately applying those skills to build several highly successful businesses in the future.

That episode in my life also taught me that one of the primary ingredients in sustainable success, just as we discussed yesterday, is avoiding major mistakes.

It doesn’t matter how much you achieve if you only end up wiping yourself out from major mistakes.

As I wrote yesterday, we make mistakes when we’re emotional– especially from fear, greed, or ego.

In my case it was ego. I was 25 and thought I knew everything.

(I’m 39 now and am happily much more honest with myself about what I don’t know.)

Now, believe it or not, this letter is actually about crypto. Because I’m seeing a ton of emotionally-driven decisions in crypto today that could lead to some major (and completely avoidable) mistakes.

Let’s talk about ego first: a lot of people have made a lot of money in crypto. And while that’s great, money can drive ego.

Problem is, while a lot of people are sensible enough to learn from their mistakes, very few bother to learn from their successes.

When we lose, we want to know why.

But when we win, we assume it’s because we’re smart… even though sometimes it’s because we just got lucky.

Eventually we think we’re so smart that we believe in our own infallibility, just like the guy at the craps table who’s on a hot streak and thinks he can’t lose.

Some guys actually believe they can predict the future, i.e. “Bitcoin is going to $50,000 by March 12th” or some such nonsense.

Give me a break Nostradamus.

Predicting the future of Bitcoin is to presume that someone knows with 100% certainty how LITERALLY billions of people around the world, along with dozens of governments and regulators, and the introductions of hundreds of other cryptocurrencies, will react together.

Anyone who thinks they can do that is an idiot. Or a minimum, they’re completely delusional.

I was a fairly early buyer of Bitcoin, picking up a bunch in the early days when most Bitcoin-related conversations began with, “What’s Bitcoin?”

Obviously that purchase worked out well. But I know I got lucky.

I was attracted to the concept, but honestly I had no earthly idea what would happen and didn’t fully understand it… there was very little data at the time.

So I bet a bit of scratch– a small rounding error that I could afford to lose.

Years later it’s worth quite a bit more scratch. But I acknowledge it was luck.

The real problem is when people refuse to recognize that they got lucky.

Rather than thinking rationally, like “hey I was really lucky, maybe I should take a bit of cash off the table,” they let it all ride.

Don’t get me wrong– you know I’m not anti-crypto. And I’m certainly not suggesting you shouldn’t buy, or that you should sell.

What I am suggesting is that avoiding BIG mistakes means being rational.

If you’ve won big, be sensible, not ego-driven. Don’t kid yourself and pretend that you can predict the future.

At the same time, there are folks who feel they missed out. Their amygdalas flare up with all sorts of powerful emotions every time Bitcoin breaks a new $1,000 threshold.

Usually those emotions are greed and/or fear– specifically the Fear of Missing Out (FOMO).

FOMO is dangerous. It compels people to make emotional investment decisions rather than rational ones.

And it doesn’t help when there are countless guys in the Nostradamus category chanting that Bitcoin is going to $100,000 or whatever.

Stay rational. No one really knows what’s going to happen, so make your own conclusions.

Remember, with many cryptocurrencies (but not all) supply is fixed, which means the price is fundamentally driven by demand.

So the important questions you have to answer include– will there be more crypto users in the future or fewer? What are the major risks that could throw a serious monkey wrench in that model? Which cryptocurrencies have superior technology?

And then, should your rational analysis lead you to purchase, make sure you buy only what you can afford to lose.

There’s risk with ANY investment or speculation. Crypto is no different.

On the other hand should you decide that you just don’t understand it, or you aren’t comfortable with the asset class, then be confident in your decision to NOT invest.

Don’t feel like you’re missing out on anything. There are plenty of other opportunities out there, and buying cryptocurrencies will certainly not be the last great thing to come along.

Either way, though, the choice to sell, hold, buy, or NOT buy, should be grounded in a brutally honest, well-reasoned analysis.

Source

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Buchanan Blasts The Times’ Ride To Mueller’s Rescue

Authored by Patrick Buchanan via Buchanan.org,

What caused the FBI to open a counterintelligence investigation into the Trump campaign in July 2016, which evolved into the criminal investigation that is said today to imperil the Trump presidency?

As James Comey’s FBI and Special Counsel Robert Mueller have, for 18 months, failed to prove Donald Trump’s “collusion” with the Kremlin, what was it, in mid-2016, that justified starting this investigation?

What was the basis for the belief Trump was colluding, that he was the Manchurian candidate of Vladimir Putin? What evidence did the FBI cite to get FISA court warrants to surveil and wiretap Trump’s team?

Republican congressmen have for months been demanding answers to these questions. And, as Mueller’s men have stonewalled, suspicions have arisen that this investigation was, from the outset, a politicized operation to take down Trump.

Feeding those suspicions has been the proven anti-Trump bias of investigators. Also, wiretap warrants of Trump’s team are said to have been issued on the basis of a “dirty dossier” that was floating around town in 2016 — but which mainstream media refused to publish as they could not validate its lurid allegations.

Who produced the dossier?

Ex-British spy Christopher Steele, whose dirt was delivered by ex-Kremlin agents. And Steele was himself a hireling of Fusion GPS, the oppo research outfit enlisted and paid by the Clinton campaign and DNC.

Writes the Washington Times, Steele “paid Kremlin sources with Democratic cash.”

Yet, if Steele’s dossier is a farrago of falsehoods and fake news, and the dossier’s contents were used to justify warrants for wiretaps on Trump associates, Mueller has a problem.

Prosecutions his team brings could be contaminated by what the FBI did, leaving his investigation discredited.

Fortunately, all this was cleared up for us New Year’s Eve by a major revelation in The New York Times. Top headline on page one:

“Unlikely Source Propelled Russia Meddling Inquiry”

The story that followed correctly framed the crucial question:

“What so alarmed American officials to provoke the FBI to open a counterintelligence investigation of the Trump campaign months before the presidential election?”

The Times then gave us the answer we have been looking for:

“It was not, as Trump and other politicians have alleged, a dossier compiled by a former British spy hired by a rival campaign. Instead it was firsthand information from one of America’s closest intelligence allies.”

The ally: Australia, whose ambassador to Britain was in an “upscale London Bar” in the West End in May 2016, drinking with a sloshed George Papadopoulos, who had ties to the Trump campaign and who informed the diplomat that Russia had dirt on Hillary Clinton.

Papadopoulos had reportedly been told in April that Russia had access to Clinton’s emails.

Thus, when the DNC and John Podesta emails were splashed all over the U.S. press in June, Amb. Alexander Downer, recalling his conversation with Papadopoulos, informed his government, which has excellent ties to U.S. intelligence, and the FBI took it from there.

The Times’ story pounds home this version of events:

“The hacking and the revelation that a member of the Trump campaign may have had inside information about it were driving factors that led the FBI to open an investigation in July 2016 into Russian attempts to disrupt the election and whether any of Trump’s associates conspired.”

This, the Times assures us, “answers one of the lingering mysteries of the past year.”

Well, perhaps.

But if Papadopoulos’s drunken babbling to the Aussie ambassador triggered the investigation in July 2016, why was George not interviewed by the FBI until January 2017?

According to the Times, an FBI agent in Rome had been told by Steele in June 2016 what he had learned from the Russians.

And Steele was interviewed by the FBI in October 2016.

If Papadopoulos triggered the investigation, why the seeming FBI disinterest in him — as compared to Steele?

Yet another major question remains unanswered.

If, as the Times writes, the FBI was looking “into Russian attempts to disrupt the elections,” why did the FBI not open an investigation into the KGB roots of the Steele dossier that was written to destroy the Republican candidate, Donald Trump?

If Trump’s alleged “collusion” with Putin to damage Clinton was worthy of an all-out FBI investigation, why did the Clinton-DNC scheme to tie Trump to Russian prostitutes, using British spies and former KGB agents, not merit an FBI investigation?

Why was there less concern about the Clinton campaign’s ties to Russian agents, than to Trumpian “collusion” that is yet unproven?

 

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Consider what the British spy Steele and his former KGB/FSB comrades accomplished:

They have kept alive a special counsel’s investigation that has divided our country, imperiled the FBI’s reputation, preoccupied and damaged a president, and partially paralyzed the U.S. government.

Putin must be marveling at the astonishing success of his old comrades from KGB days, who could pull off an intelligence coup like this and so cripple the superpower that won the Cold War.

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Even The Penguins Are Panicking: North America Is Entering A Record-Setting Deep Freeze

North America is in the grip of a record-setting cold spell that’s set to culminate with the arrival of a “bomb cyclone” along the eastern seaboard late Thursday. The cold front has delivered temperatures that haven’t been seen in decades.

Already, stories about the epic cold snap have proliferated online. As we pointed out yesterday, a group of good Samaritans helped rescue a dozen elk that had crashed trough a thin patch of river ice and were in danger of freezing to death, or drowning. At the time, temperatures were below freezing across a staggering 92% of the US, with temperatures more than 20 degrees lower than their seasonal averages for this time of year.

Winter Storm Grayson, a very large and powerful winter storm is threatening the East Coast of the United States with heavy snow, intense winds, and record-setting low temperatures. Winter storm watches and warnings have been issued for many coastal regions in north Florida to Maine from Wednesday into late Thursday.

This week’s storm may end up being worse than your average nor’easter. That’s because meteorologists say it could produce a “bomb cyclone,” otherwise known as a bombogenesis, a phenomenon that occurs when a system’s central pressure drops steeply – by 24 millibars or more – in 24 hours.

If current computer models hold, that’ll start to happen somewhere off Cape Hatteras, North Carolina, and continue as the storm moves north. Hurricane-force wind warnings have been posted off the coast where ships could encounter winds of 80 miles (130 kilometers) an hour and waves as high as 26 feet on Thursday.

Already, the unusual weather patterns are causing all sorts of strange phenomena around the country. According to the New York Times, it’s too cold for many zoo penguins, which have been taken inside as a precaution ahead of the storm. Meanwhile, sharks have washed up dead on the Atlantic coast.

The cold weather, which has been blamed for a handful of deaths, is expected to continue at least into the weekend, with temperatures most likely remaining below average and possibly setting records, according to Bob Oravec, a lead forecaster with the National Weather Service in College Park, Md.

The chill is the result of a jet stream that is shuttling arctic air from northwest Canada to the eastern United States and relief is, at best, days away, Oravec said.

“We’re stuck right now in a very wintry pattern,” he said.

Here are a few ways in which the cold snap is affecting the country, courtesy of the New York Times:

* * *

Records Are Being Set

 

Records

 

As revelers marked the end of 2017 in Times Square, the temperature reached 9 degrees, making the New Year’s Eve celebration there the coldest since 1917.

On the first day of 2018, a number of records were set. The temperature in Portland, Me., reached minus 17 degrees Fahrenheit (minus 27 Celsius), beating a record set more than six decades ago. Aberdeen, S.D., saw a high of minus 9, beating a record set in 1928. And, in Alma, Fla., the high temperature was 42, matching a record set in 1964.

Sights Are Transformed

 

Niagra Falls

 

No, Niagara Falls isn’t freezing over. The current is too fast for that to happen, no matter how cold it gets.

But the sustained cold spell has created a scene that would fit snugly in Disney’s “Frozen.” The mist drifting off the falls is freezing on contact with all it touches, coating tree branches, benches and railings with a solid layer of ice.

“Typically you will see this on a day or two on a much smaller scale, but at this point this cold snap has lasted for so many days, the ice is building thicker and thicker as these days continue,” said Andrea Czopp, a spokeswoman for Destination Niagara USA.

Sharks Are Dying

 

Shark

 

In New England, officials have found several sharks frozen on the shore, their deaths possibly accelerated by the chill.

“If you’ve got cold air, that’ll freeze their gills up very quickly,” Greg Skomal, a marine scientist for the Massachusetts Division of Marine Fisheries, told The New York Times. “Those gill filaments are very sensitive and it wouldn’t take long for the shark to die.”

The sharks may have gotten trapped in the waters by Cape Cod as they tried to migrate south, Mr. Skomal said.

Penguins Are At Risk

 

Calgary Zoo Penguins

 

In Canada, officials at the Calgary Zoo brought their king penguins in from an outdoor enclosure last week after temperatures fell below minus 13 degrees Fahrenheit (minus 25 Celsius).

The penguins spend most of each winter outdoors, though they are often brought inside for short stretches as a precaution, a zoo curator, Malu Celli, told The Canadian Press.

“It’s not necessarily that it’s too cold for them,” she said. “I believe that physiologically, they can withstand colder weather than what we have here, but these are not wild birds.”

But for denizens of the Internet looking for something fresh to distract them, well, there’s at least one silver lining. The cold temps have afforded ample opportunities for making new memes – like this bubble sculpture.

 

 

Temperatures across North America are expected to decline today and tomorrow. The worst of the cold weather is expected to pass by end of day Sunday.

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Intel Slides After Revealing Major Processor Flaw, AMD Surges

Tech website The Register  reports that chip giant Intel has a bug that lets some software gain access to parts of a computer’s memory which are set aside to protect things like passwords. The news sent INTC stock sliding over 2% to $45.90, while rival AMD surged as much as 6.2% as costly patches to Windows and OS X will be required and the security updates will slow down older machinery by up to 30%.

asd

As the Register adds, “programmers are scrambling to overhaul the open-source Linux kernel’s virtual memory system. Meanwhile, Microsoft is expected to publicly introduce the necessary changes to its Windows operating system in an upcoming Patch Tuesday: these changes were seeded to beta testers running fast-ring Windows Insider builds in November and December.

Crucially, these updates to both Linux and Windows will incur a performance hit on Intel products. The effects are still being benchmarked, however we’re looking at a ballpark figure of five to 30% slow down, depending on the task and the processor model. More recent Intel chips have features – such as PCID – to reduce the performance hit. Your mileage may vary.

It’s not just Windows: similar operating systems, such as Apple’s 64-bit macOS, will also need to be updated – the flaw is in the Intel x86-64 hardware, and it appears a microcode update can’t address it. It has to be fixed in software at the OS level, or go buy a new processor without the design blunder.

The report adds that the bug is present in modern Intel processors produced in the past decade. It allows normal user programs – from database applications to JavaScript in web browsers – to discern to some extent the layout or contents of protected kernel memory areas.

The vulnerability could be leveraged by malware and hackers to more easily exploit other security bugs. At worst, the hole could be abused by programs and logged-in users to read the contents of the kernel’s memory. Suffice to say, this is not great. The kernel’s memory space is hidden from user processes and programs because it may contain all sorts of secrets, such as passwords, login keys, files cached from disk, and so on. Imagine a piece of JavaScript running in a browser, or malicious software running on a shared public cloud server, able to sniff sensitive kernel-protected data.

According to Bloomberg, Intel has more than 80% market share overall and more than 90% in laptops and servers.

 

 

 

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