Month: June 2018

Just hours after we warned that it was time to start worrying about China’s debt default avalanche, and shortly after the PBOC lowered its credit quality restrictions for collateral, China offered its Medium-term Lending Facility (MLF) to inject CNY463bn (~$72bn) of liquidity.

As we detailed earlier, the recent blow out in Chinese corporate bond spooked none other than the PBOC, which last last Friday announced that it will accept lower-rated corporate bonds as collateral for a major liquidity management tool in a move that analysts see as designed in part to restore confidence in the country’s corporate bond market.

Specifically, the central bank said that it had decided to expand the collateral pool for the medium-term lending facility (MLF) to include corporate bonds rated AA+ or AA by domestic rating agencies.  The central bank also added as collateral financial bonds rated AA and above with proceeds to support rural development, small enterprises and green projects, as well as high-quality loans supporting green projects and small enterprises, the PBoC said in a statement posted on its website.

The PBoC said the expansion of collateral would “help alleviate the financing difficulties of small companies and to promote the healthy development of the corporate bond market.”

CICC confirmed as much, writing in a note that “the expansion of collateral for MLF, to some extent, is intended to bolster confidence in lower-rated corporate bonds … and to avoid creating an apparent net financing gap which would impact the real economy.”

Translated: the PBOC is providing yet another backdoor bailout to China’s latest and greatest distressed sector in hopes of avoiding an avalanche of defaults as credit conditions become increasingly tighter as the PBOC hikes tit for tat with the Fed.

*  *  *

Today’s MLF was offered at 3.3% -very marginally above the 3.25% one-year term rate for the last MLF in February saying it was “to ensure banking liquidity remains stable”

Notably, 259.5 billion yuan of MLF loans werer set to mature on Wednesday, so today 463 billion yuan really exposes the need for liquidity (rolling all the prior loans and an additional 203.5 billion yuan was required).

However, there was also a net withdrawal of open market operations of 180 billion yuan due to maturing repo agreements.

Which means the net liquidity injected today was 23.5 billion yuan (still around $3.6 billion).

While today’s PBOC intervention may delay the moment of reckoning for the world’s most indebted corporate sector, it will not eliminate it. One potential catalyst: Chinese companies have to repay a total of 2.7 trillion yuan of bonds in the onshore and offshore market in the second half of this year, and together with another 3.3 trillion yuan of trust products set to mature in the second half, the funding problems will get worse. As already more than eight high-yield trust products have delayed payments so far this year.

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

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Authored by Ewan MacAskill and Alex Hern via The Guardian,

Five years after historic NSA leaks, the whistleblower tells the Guardian he has no regrets…

Edward Snowden has no regrets five years on from leaking the biggest cache of top-secret documents in history. He is wanted by the US. He is in exile in Russia. But he is satisfied with the way his revelations of mass surveillance have rocked governments, intelligence agencies and major internet companies.

In a phone interview to mark the anniversary of the day the Guardian broke the story, he recalled the day his world – and that of many others around the globe – changed for good. He went to sleep in his Hong Kong hotel room and when he woke, the news that the National Security Agency had been vacuuming up the phone data of millions of Americans had been live for several hours.

Snowden knew at that moment his old life was over. “It was scary but it was liberating,” he said. “There was a sense of finality. There was no going back.”

What has happened in the five years since? He is one of the most famous fugitives in the world, the subject of an Oscar-winning documentary, a Hollywood movie, and at least a dozen books. The US and UK governments, on the basis of his revelations, have faced court challenges to surveillance laws. New legislation has been passed in both countries. The internet companies, responding to a public backlash over privacy, have made encryption commonplace.

Snowden, weighing up the changes, said some privacy campaigners had expressed disappointment with how things have developed, but he did not share it.

“People say nothing has changed: that there is still mass surveillance. That is not how you measure change. Look back before 2013 and look at what has happened since. Everything changed.”

The most important change, he said, was public awareness.

“The government and corporate sector preyed on our ignorance. But now we know. People are aware now. People are still powerless to stop it but we are trying. The revelations made the fight more even.”

He said he had no regrets.

“If I had wanted to be safe, I would not have left Hawaii (where he had been based, working for the NSA, before flying to Hong Kong).”

His own life is uncertain, perhaps now more than ever, he said. His sanctuary in Russia depends on the whims of the Putin government, and the US and UK intelligence agencies have not forgiven him. For them, the issue is as raw as ever, an act of betrayal they say caused damage on a scale the public does not realise.

This was reflected in a rare statement from Jeremy Fleming, the director of the UK surveillance agency GCHQ, which, along with the US National Security Agency. was the main subject of the leak. In response to a question from the Guardian about the anniversary, Fleming said GCHQ’s mission was to keep the UK safe: “What Edward Snowden did five years ago was illegal and compromised our ability to do that, causing real and unnecessary damage to the security of the UK and our allies. He should be accountable for that.”

Jeremy Fleming of GCHQ addresses a security conference. Photograph: Owen Humphreys/PA

The anger in the US and UK intelligence communities is over not just what was published – fewer than 1% of the documents – but extends to the unpublished material too. They say they were forced to work on the assumption everything Snowden ever had access to had been compromised and had to be dumped.

There was a plus for the agencies. Having scrapped so much, they were forced to develop and install new and better capabilities faster than planned. Another change came in the area of transparency. Before Snowden, media requests to GCHQ were usually met with no comment whereas now there is more of a willingness to engage. That Fleming responds with a statement reflects that stepchange.

In his statement, he expressed a commitment to openness but pointedly did not credit Snowden, saying the change predated 2013. “It is important that we continue to be as open as we can be, and I am committed to the journey we began over a decade ago to greater transparency,” he said.

Others in the intelligence community, especially in the US, will grudgingly credit Snowden for starting a much-needed debate about where the line should be drawn between privacy and surveillance. The former deputy director of the NSA Richard Ledgett, when retiring last year, said the government should have made public the fact there was bulk collection of phone data.

The former GCHQ director Sir David Omand shared Fleming’s assessment of the damage but admitted Snowden had contributed to the introduction of new legislation. “A sounder and more transparent legal framework is now in place for necessary intelligence gathering. That would have happened eventually, of course, but his actions certainly hastened the process,” Omand said.

The US Congress passed the Freedom Act in 2015, curbing the mass collection of phone data. The UK parliament passed the contentious Investigatory Powers Act a year later. 

Ross Anderson, a leading academic specialising in cybersecurity and privacy, sees the Snowden revelations as a seminal moment. Anderson, a professor of security engineering at Cambridge University’s computer laboratory, said:

“Snowden’s revelations are one of these flashbulb moments which change the way people look at things. They may not have changed things much in Britain because of our culture for adoring James Bond and all his works. But round the world it brought home to everyone that surveillance really is an issue.”

MPs and much of the UK media did not engage to the same extent of their counterparts elsewhere in Europe, the US, Latin America, Asia and Australia. Among the exceptions was the Liberal Democrat MP Julian Huppert, who pressed the issue until he lost his seat in 2015.

“The Snowden revelations were a huge shock but they have led to a much greater transparency from some of the agencies about the sort of the things they were doing,” he said.

One of the disclosures to have most impact was around the extent of collaboration between the intelligence agencies and internet companies. In 2013, the US companies were outsmarting the EU in negotiations over data protection. Snowden landed like a bomb in the middle of the negotiations and the data protection law that took effect last month is a consequence.

One of the most visible effects of the Snowden revelations was the small yellow bubble that began popping up on the messaging service WhatsApp in April 2016: “Messages to this chat and calls are now secured with end-to-end encryption.” 

Before Snowden, such encryption was for the targeted and the paranoid. “If I can take myself back to 2013,” said Jillian York, the director for international freedom of expression at the digital rights group the Electronic Frontier Foundation, “I maybe had the precursor to [the encrypted communication app] Signal on my phone, TextSecure. I had [another email encryption tool] PGP, but nobody used it.” The only major exception was Apple’s iMessage, which has been end-to-end encrypted since it was launched in 2011.

Developers at major technology companies, outraged by the Snowden disclosures, started pushing back. Some, such as those at WhatsApp, which was bought by Facebook a year after the story broke, implemented their own encryption. Others, such as Yahoo’s Alex Stamos, quit rather than support further eavesdropping. (Stamos is now the head of security at Facebook.)

“Without Snowden,” said York. “I don’t think Signal would have got the funding. I don’t think Facebook would have had Alex Stamos, because he would have been at Yahoo. These little things led to big things. It’s not like all these companies were like “we care about privacy”. I think they were pushed.”

Other shifts in the technology sector show Snowden’s influence has in many ways been limited. The rise of the “smart speaker”, exemplified by Amazon’s Echo, has left many privacy activists baffled. Why, just a few years after a global scandal involving government surveillance, would people willingly install always-on microphones in their homes?

“The new-found privacy conundrum presented by installing a device that can literally listen to everything you’re saying represents a chilling new development in the age of internet-connected things,” wrote Gizmodo’s Adam Clark Estes last year.

Towards the end of the interview, Snowden recalled one of his early aliases, Cincinnatus, after the Roman who after public service returned to his farm. Snowden said he too felt that, having played his role, he had retreated to a quieter life, spending time developing tools to help journalists protect their sources. “I do not think I have ever been more fulfilled,” he said. 

But he will not be marking the anniversary with a “victory lap”, he said.

There is still much to be done.

“The fightback is just beginning,” said Snowden.

“The governments and the corporates have been in this game a long time and we are just getting started.”

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Peter Strzok, the FBI counterintelligence agent pulled off Special Counsel Robert Mueller’s probe last year for sending anti-Trump / pro-Clinton text messages to his “lovebird” FBI mistress, played a more central role than previously known in both the Russia and Hillary Clinton investigations, a lawmaker told Fox News on Tuesday. 

The assessment of Strzok’s involvement comes after six hours of closed-door interviews with FBI espionage chief Bill Priestap, along with an analysis of “recent records.” 

Colleague Catherine Herridge rpts a mbrs familiar w/Hse closed-door i-view w/FBI espionage chief Bill Priestap has been cooperative. But says FBI Agent Strzok played an more central role than previously known in Clinton email/Russia investigations beyond Strzok/Page text messages

— Chad Pergram (@ChadPergram) June 5, 2018

Priestap was interviewed Tuesday as part of an ongoing joint investigation by the House Judiciary and Oversight committees. Priestap was Strzok’s supervisor and oversaw both the Russia and Clinton investigations.

The lawmaker described Strzok as a very cooperative witness, but added that unanswered questions remained about Priestap’s overseas travel. One line of questioning Tuesday concerned a trip to London by Priestap in May 2016 and whether it was connected to the Russia case.

The trip was referenced by Strzok in a May 4, 2016 text message to FBI lawyer Lisa Page that said “Bill” would be “back from London next week.” –Fox News

Strzok emailed Priestap on January 30, 2016 along with another colleague to express dismay about statements made by former White House Press Secretary Josh Earnest claiming that Hillary Clinton was not the target of the FBI probe into her use of a private server while she was Secretary of State. 

“Below not helpful,” Strzok wrote. “Certainly the WH is going to do whatever it wants, but there is a line they need to hold with regard to the appearance of non-interference.”

We also learned in May that Peter Strzok went on a secret trip to London in the summer of 2016 to meet with Australian ambassador, Alexander Downer, to describe his meeting with Trump campaign advisor, George Papadopoulos. The FBI kept details of the operation secret from most of the DOJ – with “only about five Justice Department officials” aware of the full scope of the case. 

It was an assignment so secretive that Peter Strzok giddily texted his side piece about it on an unsecured line. It’s also weird for NYT to characterize the meeting as “not yet reported” seeing as how Strzok’s texts about it have been out for months. https://t.co/lbvTZksLJr pic.twitter.com/QSA7TedpTM

— Sean Davis (@seanmdav) May 16, 2018

Fearful of leaks, they kept details from political appointees across the street at the Justice Department. Peter Strzok, a senior F.B.I. agent, explained in a text that Justice Department officials would find it too “tasty” to resist sharing. “I’m not worried about our side,” he wrote. –NYT

And in what appears to reveal Strzok’s own doubts over the case right after he returned from London, a text message he sent to his mistress, former FBI lawyer Lisa Page, reads “I cannot believe we are seriously looking at these allegations and the pervasive connections.”

Strzok was reassigned to the FBI’s Human Resources department following the discovery of over 50,000 text messages sent between he and Page, many of which showed overt bias towards Hillary Clinton and against Donald Trump. While Strzok remains on the FBI’s payroll, Lisa Page resigned in May to “pursue other opportunities.” 

Congressional investigators will interview two other FBI officials later in the month; Michael Steinbach – former head of the agency’s national security division, and Steinbach’s predecessor, John Giacalone. Furthermore, DOJ Inspector General Michael Horowitz – whose highly anticipated report on FBI misconduct is reportedly going to come any day, is also expected to brief lawmakers.

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Authored by Mac Slavo via SHTFplan.com,

Bloody protests against Nicaragua’s President Daniel Ortega’s government have the United State’s fingerprints all over it.  Over 100 people have been killed since the civil unrest broke out in mid-April and it doesn’t take much to realize the US government is fueling the bloodbath.

According to RT, the so-called marea rosa, or “pink tide”, of allied leftist governmentswhich held sway across Latin America in previous years is being rolled back. Brazil’s Dilma Rousseff was removed from power in a right-wing coup, co-conspirators of which have now managed to imprison the current presidential frontrunner, Luiz Inacio Lula da Silva. Ecuador’s Lenin Moreno has stabbed his former leader Rafael Correa in the back by barring him from seeking re-election, while seemingly purging his cabinet of remaining Correa loyalists and beginning the process of allowing the US military back into the country. 

These are all coalescing as other democratic and not-so-democratic removals of leftist governments from power continue. NATO has nabbed itself a foothold in the Latin American region, now that Colombia has joined the obsolete yet aggressively expanding Cold War alliance, in a thinly veiled threat to neighboring authoritarian Venezuela.

Now it’s Nicaragua’s turn for the US to interfere in the government’s efforts to “police the entire world,” paid with by our stolen tax money, of course. Student demonstrations began in the capital Managua as a reaction to the country’s failure to handle forest fires in one of the most protected areas of the Indio Maiz Biological Reserve. The situation was then exacerbated when, two days later, the ruling Sandinista National Liberation Front announced it was slashing pensions and social security payments, sparking further anti-government protests. Targeted opposition violence along with police repressions have led to a mounting body count on both sides. Violence persists in the country, despite the fact that President Ortega has now ditched the proposed welfare reforms and has been engaging in talks with the opposition.

The government has adamantly denied it was responsible for snipers killing at least 15 people at a recent demonstration. And, while we may never know what really happened, it’s fair to say an embattled national leadership in the midst of peace talks has little to gain from people being gunned down in front of the world’s media at an opposition march on Mother’s Day. All I’ll say on the matter is it’s not like we didn’t have mysterious sharpshooters picking off protesters during US-supported coups in Venezuela and Ukraine. –RT

It is unsurprising then that the US is apparently attempting to capitalize on the growing discontent, stoking dissent among the youth in a deliberate attempt to destabilize the Sandinista government. Infamously nefarious US soft power organizations such as the National Endowment for Democracy, also known as the CIA’s ‘legal window’, have set up extensive networks in Nicaragua. Among the leading Nicaraguan student activists currently touring Europe to garner support for the anti-government movement is Jessica Cisneros. Cisneros is a member of the Movimiento Civico de Juventudes, which is funded by Madeline Albright’s National Democratic Institute (NDI). Albright is the former US Secretary of State that said that 500,000 Iraqi Children dying as a result of US sanctions against Saddam Hussein was “worth it”.

If the idea of Washington supporting progressive anti-government forces in Latin America confuses you, then you’re failing to grasp the nature of US interference. During the Cold War, for example, the US supported both the Mujahideen inAfghanistan as well as eastern European trade unionists against the Soviet Union. Indeed, throughout the Syrian conflict, Washington has been arming leftist groups alongside jihadist organizations. It goes without saying that, despite US politicians getting all dewy-eyed over “freedom fighters,” the likes of Jihadists or even trade unionists are not welcome in US society. –RT

It isn’t like the US never interferes, in fact, if it can, it will. And unfortunately, all we get is the bill and the knowing that our tax dollars are being used to slaughter human beings we don’t even know.

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After describing it as “Orwellian nonsense” last month, the Trump administration is again pushing back against China’s request that US airlines change how they refer to Taiwan to make clear that it is a part of China.

“This is Orwellian nonsense and part of a growing trend by the Chinese Communist Party to impose its political views on American citizens and private companies,” the White House press secretary, Sarah Huckabee Sanders, said in a statement.

According to the Financial Times, US officials have asked United, American Airlines and Delta not to comply with China’s demands, which stipulate that airlines should refer to Taiwan as “Taiwan, China” on their websites and maps. China sent letters earlier this year to 36 foreign airlines demanding they remove any language which implied that Taiwan was an independent state, saying they have until later this month to comply.

The White House has urged airlines to push back and tell China that this issue should be handled by the US and Chinese governments.

American Airlines CEO Doug Parker told the FT last month that the Taiwan issue is “between countries.”

“The United States has replied to the Chinese government and as a result we are following the direction of the US government,” said Mr Parker, who would not say if he viewed the order as Orwellian nonsense. “I’m not certain if we are obliged to [heed the US government guidance] but right now it is between our government and their government and we are following the guidance of our government.”

While the White House is trying to reassure carriers that it will handle the issue with China, air lines are nervous because they could lose access to valuable routes in China at a time when the Chinese market is becoming increasingly important for aviation.

“If airlines are denied landing rights, they will simply have to deal with the commercial realities presented by the Chinese government and US top cover won’t help,” said Evan Medeiros, a former White House Asia official. “The only message the Chinese will understand is if the airlines, for their own reasons, are not willing to accept Chinese demands. The Chinese know the pressure points, and it is airline operations and not government-to-government interactions.”

A group of US senators recently wrote to the airlines urging them to rebuff China’s request.

A bipartisan group of US senators, including Cory Gardner from Colorado and Marco Rubio from Florida, ​recently wrote to United and American to urge them to resist the “long arm” of the Chinese government. Mr Gardner told the Financial Times that the airlines should think twice about complying with the Chinese order, and said the US should consider retaliatory measures again Chinese airlines if necessary.

Australia’s Qantas Airline and several other foreign airlines have decided to comply with China’s request, according to Business Insider.

Qantas said it’s in the process of changing over all references to Taiwan in its systems and on its website, but that finalizing such a move will take time.

“Our intention is to meet the requirements. It is just taking time to get there,” CEO Alan Joyce told reporters at the annul meeting of the International Air Transport Association.

[…]

“The IT and technology that underpins our websites and the connectivity takes time for us to get to grips with changes that need to be put into the programming stages of that,” the statement read.

[…]

“An inter-governmental agreement on the naming and grouping of states and territories would be a helpful reference. In the meantime, airlines wishing to serve the China market are doing their best to comply with China’s very stringent requirements.”

Meanwhile, a spokesman for the International Air Transport Association said its members had no “no wish to make political statements” in their descriptions of markets. 

Air Canada, Air France, Malaysia Airlines, and a handful of other carriers have changed their references to Taiwan since receiving letters from Beijing. Lufthansa and British Airways made similar changes earlier this year after Delta Air Lines was censured by China for listing Taiwan as a country on its website. China has also been pressuring hotel chains and retailers. White House officials were reportedly angered earlier this year when Delta apologized to China for labeling Taiwan and Tibet as countries on their website.

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Authored by Adam Taggart via PeakProsperity.com,

Regulations? We don’t need no stinking regulations!

When the dust settled after the Great Financial Crisis, we learned that the big banks had behaved in overtly criminal ways. Yet none of their executives would be held criminally accountable. 

And while legislation was passed in the aftermath to place restrictions on the ‘Too Big To Jail/Fail’ banks, it was heavily watered down and has been under attack by financial system lobbyists ever since.

To talk with us today about the perpetual legislative warfare pitting citizens on one side and lobbyists (and many lawmakers) on the other, is Bartlett Naylor. Naylor is a veteran of the Wall Street wars. He spent a number of years as an aid to Senator William Proxmire at a time when Proxmire was head of the Senate Banking Committee. Naylor himself served as that committee’s Chief of Investigations.

Sadly, Naylor sees the banks winning out here. More and more of the prudent restraints placed on the banking system are being dismantled, as further evidenced by the recent bill President Trump just signed:

The President signed S2155 last week. This bill has 40 or so provisions in it. The most troubling one reduces what’s known as enhanced supervision for a class of banks that are between $50 billion and $250 billion in assets.

Enhanced supervision means tighter capital controls. Capital is assets minus liabilities — the amount of net worth, if you will, of the particular bank. You think of banks of being very solid; but in fact, they’re in hock. They are highly leveraged. 95% of their assets are financed by debt. They really don’t own that much. They mostly owe things.

Stress tests will be reduced. A stress test is to say, “All right bank. Let’s look at your portfolio and decide that of things are going to go bad in the economy—defaults will rise, unemployment will rise — what’s going to happen to your portfolio? And based on that, we will decide how much capital you should have.” In other words, that gap between assets and liabilities, and how much dividends you can pay out, or in fact, executive bonuses, etc. Let’s say you fail. What will happen to all of your assets? Is there a way that this particular part of your bank can be sold to somebody?

So for example, with the failure of Lehman Brothers, they couldn’t sell it. They couldn’t resolve it quickly enough when it was failing. They tried to find buyers for all or parts of the bank. They came close with Mitsubishi, with Barclays, but in the end, there wasn’t a game plan to see how we could break up this bank and avoid a bankruptcy.

Living wills are supposed to help that. A living will exercise is reduced for this class of banks. That’s problematic, because this class of banks would have included Countrywide. Countrywide is now a division of Bank of America. It actually is even a larger class of banks than IndyMac, which was the biggest hit on the Deposit and Insurance Fund. That was only about a $30 billion bank.

Collectively, these are two dozen banks. So you’ve got 25 or the 38 largest banks took about $50 billion in TARP money. They’re not the Boy Scout banks either. We’re talking about all the misconduct at JP Morgan. About half of them have misconduct charges against them just in the last half decade. That’s the most troubling provision.

It also turns back the Volcker Rule. That’s the restriction on gambling within the bank, a general restriction. The regulators are expected to reduce those rules in a proposal due out tomorrow, on May 30th, I think. This new bill says that if you’ve only got $10 billion in assets, you’re free to gamble. We won’t restrict that other than it has to be about 5% of assets.

Again, I worked in the Senate Banking Committee during the savings and loan crisis where what seemed to be small tweaks in savings and loan law, essentially allowing developers to run banks, run savings and loans and loan to themselves, regardless of the promise of the particular project, leading to the inflation of real estate prices and so forth. So in other words, while the smaller banks (less than $10 billion) may not be gambling now, this could usher in a new class of banks. They’ll just say, “Hey, let’s use that deposit insurance money and gamble and start ourselves a $500 million hedge fund.” And since capital is only 5% of a bank’s net worth, a good year can be profitable and a bad year can lead to the failure of the bank.

There are also a dozen or more consumer protection rollbacks. Redlining, which is where banks drew a line around a neighborhood, such as a neighborhood of color and basically said, “Make no loans there”. The Home Mortgage Disclosure Act provided information to see if banks are making loans generally in their market area, including within those red lines.

We learned from the financial crash in 2008 that banks had a different kind of redlining. They were going into some neighborhoods and making predatory loans, high-cost loans even to people who could afford a prime loan. The new HMDA, Home Mortgage Disclosure Data, is supposed to ferret that out. This bill eliminates that new data for pretty much 85% of banks. And there are other anti-consumer provisions in this.

The question is: Will this make America greater again? It’s not clear. We think it’s certainly a step in the wrong direction. I also think that the promise of the bill’s authors, that it’s going to facilitate economic growth, is going to be hard to defend. The banks already have robust loan portfolios and are making record or near record profits. And that’s at all sectors, not just the big banks, but the little banks, too. So this bill was an answer in search of a problem, and again, we think raises the question of whether it will make America greater again.

Click the play button below to listen to Chris’ interview with Bartlett Naylor (55m:53s).

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Former Deputy FBI Director Andrew McCabe is said to be in negotiations with Senate Judiciary Committee Chairman Chuck Grassley for immunity ahead of his testimony on the upcoming DOJ Inspector General report on the FBI’s conduct during the Clinton email probe. 

“Grassley, an Iowa Republican, has quietly requested that several former officials appear in front of the Judiciary Committee to discuss the long-awaited internal Justice Department report, which sources say will detail a series of missteps surrounding the Justice Department and FBI’s investigation into Clinton’s handling of classified information while secretary of state,” reports CNN.

McCabe’s attorney, Michael Bromwich, insisted that “Under the terms of such a grant of use immunity, no testimony or other information provided by Mr. McCabe could be used against him in a criminal case,” adding “Mr. McCabe is willing to testify, but because of the criminal referral, he must be afforded suitable legal protection.”

“This is a textbook case for granting use immunity… If this Committee is unwilling or unable to obtain such an order, then Mr. McCabe will have no choice but to invoke his Fifth Amendment privilege against self-incrimination.” -Michael Bromwich

As we reported Friday, federal investigators from the D.C. U.S. Attorney’s office recently interviewed former FBI director James Comey as part of an ongoing probe into whether McCabe broke the law when he lied to federal agents, reports the Washington Post.

Investigators from the D.C. U.S. Attorney’s Office recently interviewed former FBI director James B. Comey as part of a probe into whether his deputy, Andrew McCabe, broke the law by lying to federal agents — an indication the office is seriously considering whether McCabe should be charged with a crime, a person familiar with the matter said. –Washington Post

Of particular interest is that Comey and McCabe have given conflicting reports over the events leading up to McCabe’s firing, with Comey calling his former deputy a liar in an April appearance on The View. 

Justice Department Inspector General Michael Horowitz issued a criminal referral for McCabe following a months-long probe which found that the former acting FBI Director leaked a self-serving story to the press and then lied about it under oath. McCabe was fired on March 16 after Horowitz found that he “had made an unauthorized disclosure to the news media and lacked candor – including under oath – on multiple occasions.” 

Specifically, McCabe was fired for lying about authorizing an F.B.I. spokesman and attorney to tell Devlin Barrett of the Wall St. Journal – just days before the 2016 election, that the FBI had not put the brakes on a separate investigation into the Clinton Foundation, at a time in which McCabe was coming under fire for his wife taking a $467,500 campaign contribution from Clinton proxy pal, Terry McAuliffe. 

During an April appearance on ABC’s The View to peddle his new book, A Higher Royalty Loyalty, where he called McCabe a liar, and said he actually “ordered the [IG] report” which found McCabe guilty of leaking to the press and then lying under oath about it, several times. 

Comey was asked by host Megan McCain how he thought the public was supposed to have “confidence” in the FBI amid revelations that McCabe lied about the leak. 

“It’s not okay. The McCabe case illustrates what an organization committed to the truth looks like,” Comey said.

“I ordered that investigation.” 

Comey then appeared to try and frame McCabe as a “good person” despite all the lying. 

“Good people lie. I think I’m a good person, where I have lied,” Comey said.

“I still believe Andrew McCabe is a good person but the inspector general found he lied,” noting that there are “severe consequences” within the DOJ for doing so.

Full letter from McCabe’s lawyers to Senator Grassley…

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In an odd coincidence, earlier today we asked rhetorically “what could go wrong” if millions of Americans trust a DNA collecting company – in this case ancestry.com – with their genetic code. At almost the exact same time, Bloomberg reported that the Israeli-based consumer genealogy website, MyHeritage had been hacked, and that the email addresses and password information linked to more than 92 million user accounts have been “compromised.”

According to MyHeritage, its security officer had received a message from a researcher who unearthed a file named “myheritage” containing email addresses and hashed passwords of 92,283,889 of its users on a private server outside the company.

“There has been no evidence that the data in the file was ever used by the perpetrators,” the company said in a statement late Monday, supposedly in an attempt to make its nearly 100 million users and customers feel comfortable.

It was not explicitly clear if any client “genetic material” had also been compromised as part of the security breach.

Like Ancestry.com and 23andMe, MyHeritage lets users submit their DNA, build family trees, search historical records and hunt for potential relatives. Founded in Israel in 2003, the site launched a service called MyHeritage DNA in 2016 that lets users send in a saliva sample for genetic analysis. The website currently has 96 million users of whom 1.4 million users have taken the DNA test.

In a blog post, MyHeritage said the breach took place on Oct. 26, 2017, and impacts users who signed up for an account through that date. Armed with that information, a hacker could access personal information such as the identity of family members. While the company said it is unlikely that they could easily access a user’s raw genetic information, that’s precisely what one would expect them to say as the alternative is going out of business as its entire user base flees.

Still, while it wasn’t certain whether or not the genetic data had been compromised, the company emphasized that DNA data is stored “on segregated systems and are separate from those that store the email addresses, and they include added layers of security.”

As Bloomberg adds, MyHeritage has set up a 24/7 support team to assist customers affected by the breach. It plans to hire an independent cybersecurity firm to investigate the incident and potentially beef up security. In the meantime, users were prudently advised to change their passwords.

Meanwhile, as consumer DNA testing has grown into a $99 million industry, questions about the security of users’ intimate data have increased as well. After investigators tracked down a suspect in the Golden State Killer case using a genealogy website that, like MyHeritage, allows users to upload raw genetic information, privacy concerns about shared DNA data have also surged. One thing is certain: more stories like the hack of Ancestry.com and MyHeritage are the surest way to ensure that the industry which allows naive customers to hand over their DNA to a 3rd party and pay for the privilege, shrinks from $99 million to 0 in a very short time frame.

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Russian president Vladimir Putin gave a tense interview to Austria’s ORF television channel which at times got so heated, he spoke in German to ask host Armin Wolf to let him finish his answers. 

The interview was held ahead of Putin’s Tuesday meeting with Austrian Chancellor Sebastian Kurz and Vice-Chancellor Heinz-Christian Strache during a trip to Vienna, the first since Putin’s March inauguration to his second consecutive term (and fourth term in total). 

After several interruptions by Wolf, Putin asked the host to “be patient,” before switching to Wolf’s mother tongue of German to ask him to put a cork in it. “Seien Sie so nett, lassen Sie mich etwas sagen (Please be so kind as to let me say something),” said Putin. 

When the topic of troll farms came up, Putin said that Moscow “has nothing to do” with them, adding that claims by Western media that a single Russian businessman, Yevgeny Prigozhin, was able to influence the US election. 

Prigozhin and Putin are associates, however Putin said he has no knowledge of his online activities. The Russian president then brought up George Soros as an example of the double standards being applied to those accused of meddling in foreign affairs.

“There are rumors circulating now that Mr. Soros is planning to make the Euro highly volatile,” Putin said quoted by RT.  “Experts are already discussing this. Ask the [US] State Department why he is doing this. The State Department will say that it has nothing to do with them – rather it is Mr. Soros’ private affair. With us, it is Mr. Prigozhin’s private affair. This is my answer. Are you satisfied with it?”

* * *

MH17

Putin said that Russia has been blocked from participating in the ongoing international investigation into the 2014 downing of flight MH17, which Russia has been recently blamed for. Russian experts “have been denied access to the investigation,” said Putin, while Russia’s arguments are “not taken into consideration” because nobody “is interested in hearing us out.”

Ukraine, meanwhile, has been given access to the probe.  

* * *

North Korea

On North Korea, Putin says that the prospect of a full-scale military conflict with Pyonyang would be “dreadful,” considering that the two nations are neighbors – and some North Korean nuclear test sites are located near the Russian border. 

Although Russia “pins great hopes on the personal meeting between [US] President Trump and North Korean leader Kim Jong-un,” the path to the denuclearization of the Korean peninsula is a “two-way road,” Putin explained. “If the North Korean leader is backing up his intentions with practical actions, for example, giving up new tests of ballistic missiles, new nuclear tests, the other side should reciprocate in a tangible manner,” he said, calling regular US military drills in the area “counterproductive.” –RT

* * *

Crimea

During perhaps the most heated moment in the interview, Putin was asked under what conditions Russia would hand Crimea back to Ukraine, to which the Russian president firmy stated: “There are no such conditions and there can never be.”

Crimeans overwhelmingly voted to rejoin Russia in a hotly contested 2014 vote that the West considers illegitimate and rigged. Putin stressed that the annexation happened after an “unconstitutional armed coup” in Kiev, and it was the Crimeans who decided their own fate. 

“Crimea gained independence through the free will of the Crimeans, expressed in an open referendum, not as a result of an invasion by Russian forces.” -Vladimir Putin

Following the annexation, Putin said “the first thing we did was increase our contingent to guard our Armed Forces, our military facilities, because we immediately saw that they were being threatened,” adding that the mostly Russian population in Crimea “sensed danger, when trains started bringing aggressive nationalists there, when buses and personal vehicles were blocked, people naturally wanted to protect themselves.” 

“The first thing that occurred was to restore the rights that Ukraine itself had issued by granting Crimea autonomy.”

* * *

Topless Putin

Once the conversation settled down, Putin was asked about his famous bare-chested photos from various vacations and outdoor activities – to which the Russian president replied: “You said ‘half-naked’ not ‘naked,’ thank God,” Putin joked. “When I am on vacation I see no need to hide behind the bushes, and there is nothing wrong with that.”

Of course, where would we be without photoshop?

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