A few days ago, we asked a simple rhetorical question: “Are you targeted by the NSA?”

The answer, sadly for those reading this, is very likely yes, as it was revealed that as part of the NSA’s XKeyscore program “a computer network exploitation system, as described in an NSA presentation, devoted to gathering nearly everything a user does on the internet” all it takes for a user to be flagged by America’s superspooks is to go to a website the NSA finds less than “patriotic” and that user becomes a fixture for the NSA’s tracking algos.

So assuming one is being tracked by the NSA – or as it is also known for politically correct reasons “intercepted” – as a “person of interest” or worse, just what kind of data does the NSA collect? The latest report by the WaPo titled “In NSA-intercepted data, those not targeted far outnumber the foreigners who are” sheds much needed light on just how extensive the NSA’s data collection effort is.

According to WaPo, the files on intercepted Americans “have a startlingly intimate, even voyeuristic quality. They tell stories of love and heartbreak, illicit sexual liaisons, mental-health crises, political and religious conversions, financial anxieties and disappointed hopes. The daily lives of more than 10,000 account holders who were not targeted are catalogued and recorded nevertheless.”

The Post reviewed roughly 160,000 intercepted e-mail and instant-message conversations, some of them hundreds of pages long, and 7,900 documents taken from more than 11,000 online accounts.

Remember when the NSA said they only target foreigners, and only those who are of particular actionable interest? They lied.

Nine of 10 account holders found in a large cache of intercepted conversations, which former NSA contractor Edward Snowden provided in full to The Post, were not the intended surveillance targets but were caught in a net the agency had cast for somebody else.

 

Many of them were Americans. Nearly half of the surveillance files, a strikingly high proportion, contained names, e-mail addresses or other details that the NSA marked as belonging to U.S. citizens or residents. NSA analysts masked, or “minimized,” more than 65,000 such references to protect Americans’ privacy, but The Post found nearly 900 additional e-mail addresses, unmasked in the files, that could be strongly linked to U.S. citizens or U.S.residents.

Going back to “your” file:

Taken together, the files offer an unprecedented vantage point on the changes wrought by Section 702 of the FISA amendments, which enabled the NSA to make freer use of methods that for 30 years had required probable cause and a warrant from a judge. One program, code-named PRISM, extracts content stored in user accounts at Yahoo, Microsoft, Facebook, Google and five other leading Internet companies. Another, known inside the NSA as Upstream, intercepts data on the move as it crosses the U.S. junctions of global voice and data networks.

It gets worse, because that bed-wetting habit you kicked in the 2nd grade? The NSA knows all about it.

Among the latter are medical records sent from one family member to another, résumés from job hunters and academic transcripts of schoolchildren. In one photo, a young girl in religious dress beams at a camera outside a mosque.

 

Scores of pictures show infants and toddlers in bathtubs, on swings, sprawled on their backs and kissed by their mothers. In some photos, men show off their physiques. In others, women model lingerie, leaning suggestively into a webcam or striking risque poses in shorts and bikini tops.

How many Americans may be tracked by the NSA at any one time? Turns out ther answer is lots:

The Obama administration declines to discuss the scale of incidental collection. The NSA, backed by Director of National Intelligence James R. Clapper Jr., has asserted that it is unable to make any estimate, even in classified form, of the number of Americans swept in. It is not obvious why the NSA could not offer at least a partial count, given that its analysts routinely pick out “U.S. persons” and mask their identities, in most cases, before distributing intelligence reports.

 

If Snowden’s sample is representative, the population under scrutiny in the PRISM and Upstream programs is far larger than the government has suggested. In a June 26 “transparency report,” the Office of the Director of National Intelligence disclosed that 89,138 people were targets of last year’s collection under FISA Section 702. At the 9-to-1 ratio of incidental collection in Snowden’s sample, the office’s figure would correspond to nearly 900,000 accounts, targeted or not, under surveillance.

And tangentially, for those who are urging the NSA to release Lois Lerner’s emails, all it would take are a few keystrokes:

“If I had wanted to pull a copy of a judge’s or a senator’s e-mail, all I had to do was enter that selector into XKEYSCORE,” one of the NSA’s main query systems, [Edward Snowden] said.

What the file would likely reveal is all the dirt the US intelligence apparatus had on said (Supreme Court) judge or senator, or IRS employee. After all, what better way to keep the system of “checks and balances” in check than to have dirt on all the key places of leverage.

The WaPo has released a sterilized example of what a “target package” looks like for any given individual.

All of the above would be stunning… if it wasn’t for a culture in which FaceBook has made the exhibitionist stripping of one’s privacy and disclosure of every last piece of “intimate” personal information a daily chore. It is in this world, sadly, where the most recent confirmation of just how expansive Big Brother is will merely be granted with a yawn by the vast majority of the population.

via Zero Hedge http://ift.tt/1mXwfHZ Tyler Durden

It should come as no surprise that when Gallup recently conducted a poll asking residents to rank if their state is the “worst possible to live in” a whopping 25% of its residents, by far the most of any states, responded Illinois. Which were the other “worst possible” states? The table below ranks them all.

 

How about the opposite: the best US states to live in? Here is the full list in descending order.

And some commentary from Gallup:

Residents of Western and Midwestern states are generally more positive about their states as places to live. With the exception of the New England states of New Hampshire and Vermont, all of the top 10 rated states are west of the Mississippi River. In addition to Montana and Alaska, Utah (70%), Wyoming (69%), and Colorado (65%) are among the 10 states that residents are most likely to say their state is among the best places to reside. Most of these states have relatively low populations, including Wyoming, Vermont, North Dakota, and Alaska — the four states with the smallest populations in the nation. Texas, the second most populated state, is the major exception to this population relationship. Although it is difficult to discern what the causal relationship is between terrain and climate and positive attitudes, many of the top 10 states are mountainous with cold winters. In fact, the two states most highly rated by their residents — Montana and Alaska — are among not only the nation’s coldest states but also both border Canada.

With the exception of New Mexico, all of the bottom 10 states are either east of the Mississippi River or border it (Louisiana and Missouri). New Jersey (28%), Maryland (29%), and Connecticut (31%) join Rhode Island among the bottom 10.

The results are based on a special 50-state Gallup poll conducted June-December 2013, including interviews with at least 600 residents in every state. For the first time, Gallup measured whether residents view their states as “the best possible state to live in,” “one of the best possible states to live in,” “as good a state as any to live in,” or “the worst possible state to live in.”

Few Americans say their states are the single best or worst places to live. Rather, the large majority of respondents say their states were either “one of the best” or “as good a state as any” place to live.

One in Four Illinois Residents Say Their State Is the Worst Place to Live

Illinois has the unfortunate distinction of being the state with the highest percentage of residents who say it is the worst possible place to live. One in four Illinois residents (25%) say the state is the worst place to live, followed by 17% each in Rhode Island and Connecticut.

Throughout its history, Illinois has been rocked by high-profile scandals, investigations, and resignations from Chicago to Springfield and elsewhere throughout the state. Such scandals may explain why Illinois residents have the least trust in their state government across all 50 states. Additionally, they are among the most resentful about the amount they pay in state taxes. These factors may contribute to an overall low morale for the state’s residents.

Texans Most Likely to View the Lone Star State as the Very Best

Although Texas trails Montana and Alaska in terms of its residents rating it as the best or one of the best places to live, it edges out Alaska (27%) and Hawaii (25%) in the percentage of residents who rate it as the single best place to live.

Texans’ pride for their state as the single best place to live is not surprising when viewed in the context of other measures. According to Gallup Daily tracking for 2013, Texans rank high on standard of living and trust in their state government, and they are less negative than others are about the state taxes they pay. The same is true for Alaska and, to a lesser extent, Hawaii, which had relatively average scores for trust in state government and state taxes, but ranked high for standard of living. The three also have distinct histories, geographies, natural resources, and environmental features that may contribute to residents’ personal enjoyment and pride in their locale.

Bottom Line

Residents with the most pride in their state as a place to live generally boast a greater standard of living, higher trust in state government, and less resentment toward the amount they pay in state taxes. However, the factors that residents use to determine whether their state is a great place to live are not always obvious. West Virginia, for example, falls far behind all other states on a variety of metrics, including economic confidence, well-being, standard of living, and stress levels. Still, over a third of West Virginians feel their state is among the best places to live, giving it a ranking near the middle of the pack.

via Zero Hedge http://ift.tt/1rAyOHl Tyler Durden

There was a time when reports issued by short selling-focused research shops such as Muddy Waters would usually result in disparagement lawsuits by the targeted company (typically a  reverse-merged Chinese fraudcap), seeking to shut said short-sellers and restore confidence in the company (when the best way to restore said confidence would have been for the company to simply buy back its shares at severely depressed values).

However, the reputation of such bearish-biased research boutiques will only be boosted following the latest fiasco involving Spanish small-cap tech company Let’s Gowex (GOW), a Madrid-based provider of Wi-Fi connections and support services for mobile-phone carriers, which a week ago was the subject of a research report by Gotham City Research (whose work has deservedly appeared in the past on Zero Hedge) and its Twitter frontliner, @LongShortTrader.

In the report, Gotham predicted that “Gowex shares are worth €0.00 per share.” It added that over 90% of Gowex’s reported revenues do not exist noting that “we estimate GOW’s actual revenues to be <€10 million.”

Its conclusion: “the shares will be suspended, just as Pescanova’s shares were suspended.” Needless to say at the time Gowex vehemently denied the report saying all its allegations were false.

Gotham was right: after the stock crashed by nearly 50% in the days after the release of the report, on July 3 Gowex SA was suspended from trading, and overnight, the CEO admitted his company is a fraud.

As Bloomberg reports, Let’s Gowex will file for insolvency and said its chief executive officer resigned after admitting he presented false accounts for at least the past four years.

The board of the Madrid-based provider of Wi-Fi connections accepted CEO and founder Jenaro Garcia’s resignation after he took full responsibility for fake accounts, the company said in a regulatory statement today. Gowex shares have dropped 60 percent since July 1, when short-seller Gotham City Research LLC said the start-up was worthless, claiming the company inflated revenue.

Aside from humiliation for an entire sell-side following which ignored the clear warnings signs and pushed the stock to a market cap of some $2 billion before the Gotham report, this is also a hit to the Spanish stock market.

Gowex’s fast growth, with a market value that more than doubled between going public in 2010 and the release of Gotham’s report, was a rare success story in a country that has failed to foster successful technology start-ups with global reach. The company was also one of the best performers in Madrid’s small-cap MAB stock index, an alternative funding source for small companies in line with a government drive to promote financing options for businesses.

It isn’t going to be performing that well now that it is worth precisely the €0.00 Gotham predicted. Perhaps what is most shocking is how quickly the company folded and admitted it had been cooking the books – it is almost as if it didn’t even bother preserving some value while selling shares to idiot BTFDers.

That said, we are confident that the CEO will surely avoid prison time for defrauding investors and cooking the books for 5 years. After all he apologized: “I made a voluntary confession in court,” Garcia said on Twitter today – voluntary, that is, only after the jig was up. “I want to collaborate with justice. I will face the consequences.” The posting followed an earlier message in which he said he was apologizing “to everybody. I am truly sorry.”

Below is the full statement released by the company early this morning:

 The Board of Directors of the Company announces that on July 5 2014, at 16’00, at the Company’s offices, Mr. Jenaro García Martin, Chief Executive Officer and President of the Board, has declared in the presence of different Board Members that the financial accounts of the Company for the last four years, at least, do not show a full and fair view of the Company’s situation, taking responsibility for this falsity.

 

The Board, as stated in the minutes of the meeting, signed by the Board Members attending the session (Mrs. Solsona Piera, Martínez Marugán and García (attending the meeting both on his own behalf and representing the Board Member Ms. Maté),has revoked all powers and delegations granted to the Chief Executive Officer and has accepted his resignation.

 

The Board, anticipating that the Company might not be in a position to face its ongoing debts when they become due, has agreed to file for a declaration of voluntary insolvency, without prejudice of other measure that it may adopt for the best protection of the Company’s interests, regarding which it will immediately inform the market as soon as it might  adopt them.

 

The Board resolutions shall be notarized by exhibition of the minutes, as it has not been possible to certify their contents, since the Board has accepted the resignation of Mr. Garcia Martin and  has not appointed a new President.

 

We remain at your disposal for any clarification deemed appropriate.

This latest loss of confidence in a rigged market will likely mean that all other companies trading on Spain’s MAB stock index are about to be monkeyhammered:

It looks like an isolated case in the Spanish context, but I do think it is significant in the context of MAB — it’s a market that’s relatively new and has had some failures and the vigilance of the information about the companies has not always been adequate,” Jose Ramon Pin, a professor at the Barcelona-based IESE business school, said in a phone interview.

 

The MAB is a “market basically for SMEs and sort of company that quotes there tends to have more aggressive strategies,” he said.

 

Gowex is one of 23 stocks listed on the Madrid’s MAB index, which includes companies from toy retailer Imaginarium SA (IMG) to carbon fiber manufacturer Carbures Europe SA (CAR), whose stock is up 114 percent this year. Zinkia Entertainment SA (ZNK), which produces a cartoon television series, sought creditor protection last year.

Every bubble eventually bursts. As for Gotham and @longshorttrader congratulations on not only being contrarian and doing another tremendous piece of research, but, more importantly, being right. Curious what other names Gotham Street hates? Here is a sampling: Ebix Inc. (EBIX), The Tile Shop Holdings Inc. (TTS), Blucora Inc (BCOR), and Quindell Plc. (QPP)

Gotham’s full research report is below.

via Zero Hedge http://ift.tt/1vNDg3b Tyler Durden

The USA is fast running out of friends to support its 'exorbitant privelege'. Having alienated the Germans over NSA-eavesdropping, 'boomerang'd the Russians into de-dollarization, tariffed and quantitatively eased China into diversification, and finally 'punished' France into discussing the dollar's demise; it appears no lessor person than the CEO of Total (the world's 13th biggest oil producer and Europe's 2nd largest), believes "There is no reason to pay for oil in dollars." Clearly, based on Christophe de Margerie's comments, that we have passed peak Petrodollar.

 

As Reuters reports,

Oil major Total's chief executive said on Saturday the euro should have a bigger role in international trade although it was not possible to do without the U.S. dollar.

 

Christophe de Margerie was responding to questions about calls by French policymakers to find ways at EU level to bolster the use of the euro in international business following a record U.S. fine for BNP.

 

…

 

"There is no reason to pay for oil in dollars," he said. He said the fact that oil prices are quoted in dollars per barrel did not mean that payments actually had to be made in that currency.

 

French Finance Minister Michel Sapin said on Thursday that euro zone finance ministers would discuss ways of boosting use of the euro in international trade in their next monthly meeting on Monday.

 

"It would be a way to protect businesses when, outside of U.S. territory, they carry out transactions that are perfectly legal in the country they belong to," he said.

So even a major beneficiary of the status quo appears to see the end in sight for the Petrodollar.

 

As we showed only yesterday…(and have ever since 2010)… nothing lasts forever

Meanwhile, somewhere Putin is still laughing.

As Brandon Smith concluded previously with regard the 'anything but random' nature of th emore frequent discussion of the dollar as resever currency:

The dollar is no more invincible than any other fiat currency in history. In some ways, it is actually far weaker than any that came before. The dollar is entirely reliant on its own world reserve status in order to hold its value on the global market. As is evident, countries like China are already dumping the greenback in trade with particular nations. It is utterly foolish to assume this trend is somehow “random” rather than deliberate. Foreign countries would not be initiating the process of a dollar dump today if they did not mean to follow through with it tomorrow. All that is left is for a cover crisis to be conjured.  Existing tensions in the Mideast signal a pervasive crisis, most likely an energy crisis, in the near term.

It appears that making friends and influencing people is the opposite of what America is achieving…at a time when it needs them the most.

via Zero Hedge http://ift.tt/1qJTZH5 Tyler Durden

…a not so far off future in which martial law, economic collapse, and the destruction of civil liberties stood imminent…

Source: Cagle

As Brandon Smith wrote,

"Regardless of what they might say about us in the future, these are the reasons why we will fight, and our pledges to resist are not empty assertions.  We will stop the course of tyranny from completing in this country and in this era, one way or another.  If this makes us “extremists”, or “terrorists”, then so be it.  I, for one, am tired of the long running game of lies and reserved rhetoric.  They know a fight is coming, and we know a fight is coming.  Let’s just admit it and be done with it.

 

Their greatest weakness is that they have to use deceit, propaganda, media monopoly, and false flag violence in order to convince the public that they are the “right side”.  All we have to do is continue telling the truth, and stand fast…"

via Zero Hedge http://ift.tt/VtozaM Tyler Durden

Submitted by Jeffrey Snider of Alhambra Partners,

More of the same from Janet Yellen in her latest speech, but her focus on “resilience” caught my attention as it relates to very recent developments. The taper threat experience last year may have been a warning, but it doesn’t seem like it resonated with her or policymakers. The major bond selloff, which led to global ripples of crisis in credit, funding and currencies, was the opposite of flexibility. Perhaps a better definition of the word would be a place to start.

But her meaning was a bit different, in that it is clear (from this speech and prior assertions, wrong as they were, about the mid-2000’s housing bubble) she sees bubbles as “market” events in which the central bank’s role is primarily shock absorption. In other words, idiot investors wholly of their own accord create bubbles and it’s the job of the munificent and enlightened Federal Reserve to help ensure that such “market” madness is “contained” without further economic destruction.

At this point, it should be clear that I think efforts to build resilience in the financial system are critical to minimizing the chance of financial instability and the potential damage from it. This focus on resilience differs from much of the public discussion, which often concerns whether some particular asset class is experiencing a “bubble” and whether policymakers should attempt to pop the bubble. Because a resilient financial system can withstand unexpected developments, identification of bubbles is less critical.

The primary example she used is very illuminating in that regard, particularly as it relates to monetary neutrality.

Nonetheless, some macroprudential tools can be adjusted in a manner that may further enhance resilience as risks emerge. In addition, macroprudential tools can, in some cases, be targeted at areas of concern. For example, the new Basel III regulatory capital framework includes a countercyclical capital buffer, which may help build additional loss-absorbing capacity within the financial sector during periods of rapid credit creation while also leaning against emerging excesses.

This framework wholly reverses what happened in 2008, but since the FOMC as a whole, with her along for the ride, had absolutely no idea what was taking place at the time this is really not surprising. She sees the Fed as the cleanup crew for the “market’s” mess, essentially the job as it was described anyway a century ago, when in fact the 2008 panic was actually the market finally acting like a true market and exerting some pressure on the central banks to stop the ongoing and heavy inorganic and artificial intrusions. To maintain the idea of market-based mess is to be intentionally obtuse about the nature of interest rate targeting and central bank activism.

The only real question is whether she actually believes this or is dipping into the reservoir of expectations management. It is borderline facetious to suggest that “macroprudential” policy will have any real-time understanding of risks in a crisis (stress tests, really?), particularly since we have little conception of exactly how the “markets” have rebuilt themselves, intertwining leverage and correlation in new and fascinating ways, in the years since the FOMC blundered so badly the last time (with then out-of-date and similar macroprudential bluster). How do they even know how to accurately or even ballpark measure stresses in financials, such as interest rate swaps and other derivatives? I never once read anywhere that the FOMC made any connection between correlation anomalies in structured finance (negative convexity and correlation smiles) and the growing illiquidity of credit default swaps, but we are supposed to believe they will be on top of it next time?

But there is an almost cleverness to this that belies all their past mistakes; Yellen is claiming they are irrelevant going forward.  What she is trying to do is convince us all that “next time” none of it will matter because they are preparing all this “stuff” ahead of time.  In other words, there won’t be a cleanup because any “market” mistakes will have been mitigated before it ever happens – her idea of resiliency.  Does anyone actually buy that?  The lack of understanding of market behavior applies equally to the period before the crisis as it did during.

The only way any of this makes sense is if you buy the primordial orthodox premise that monetary policy is neutral in the long run (or even intermediately). Taking that line will lead you to believe asset bubbles are just markets gone insane of their own accord. Then again, Yellen has largely been hostile to “markets” since her academic career brought some notice, so this is really no surprise. But to experience, right now, the repo market collateral shortage and QE’s direct impact and to still blame markets for lack of resilience is either inordinate impudence or targeted public relations.

I cannot overstate this enough, the selloff last year was a desperate warning about the lack of resilience in credit and funding. That repo markets persist in that is, again, the opposite of the picture Janet Yellen is trying to clumsily fashion. Central banks cannot create that because their intrusion axiomatically alters the state of financial affairs, and they know this. It has always been the idea (“extend and pretend” among others) to do so with the expectation that economic growth would allow enough margin for error to go back and clean up these central bank alterations. That has never happened, and the modifications persist.

Resilience is the last word I would use to describe markets right now, with very recent history declaring as much.

via Zero Hedge http://ift.tt/1rADoW9 Tyler Durden

Via Tom McClellan via NTMarkets,

Alarming Sign in NDX Stocks’ Drawdown

July 03, 2014

The Nasdaq 100 Index is making new multi-year highs, levels not seen since the weeks just after the 2000 Internet Bubble top.  But it is interesting for us to see that the average component stock in that index is down 7% from its trailing 52-week high. 

And that 7% drawdown number is actually smaller than it has been recently, but it is still not back to the low drawdown reading of 6.0% that we saw in early March, before the Nasdaq 100 stocks got into a patch of trouble.  And the fascinating point is that divergences like this tend to be really important for the long-run picture for stock prices.

This current divergence is not guaranteed to stay with us.  It looks like a genuine divergence now, but it is still possible that we could see a continued rally that takes the stocks in the Nasdaq 100 collectively up closer to the level of their 52-week closing highs, thereby closing the gap on this measure of average drawdown.  But for now, the message is that the average stock making up the Nasdaq 100 Index is not confirming the bullish message of the NDX’s higher price highs. 

A similar message comes from a similar indicator, this time examining the 30 stocks which make up the DJIA. 

This one looks at the 30 stocks that make up the DJIA, and checks each one to see if its Price Oscillator is above or below zero.  What we are seeing lately is a declining number of Dow components participating in the uptrend that way, and a drop of this indicator below its 15-day moving average.  This condition also comes as a divergence appears between prices and the indicator.

As with the NDX stocks’ indicator above, the divergence does not absolutely have to persist; the market could just power through it, but that is not usually the way things usually work out.

 

via Zero Hedge http://ift.tt/1m4qCw7 Tyler Durden