Argentina’s Currency Collapse – Hype Hits Reality

Authored by Rob Marstrand via OfWealth.com,

Last Wednesday (29th August) the Argentine peso lost over 7% against the US dollar. Thursday it lost another 12.5%. It’s been cut in half over the past year. In dollar terms, the MSCI Argentina index is down 57% since it’s January top. But it’s still not a bargain, given the high inflation rate and political uncertainties.

Over the past couple of years, I’ve regularly warned that investors were far too optimistic about Argentina. The country elected a new government back in late 2015, and it’s made a lot of economic reforms that make sense. But many decades of mismanagement don’t get fixed overnight. Investors seemed blind to the realities on the ground.

Back in June 2017 – partly due to investors being enamoured with the government but also as a symptom of the global bond bubble – Argentina even managed to issue a 100-year government bond (see here). Investors, for the privilege of taking such absurd risk, accepted a paltry yield of 7.9%.  The bond price is now down about a quarter and the yield has jumped to 10.3% (when fixed-coupon bond prices fall, yields rise, and vice versa).

In November 2017, I warned about overpriced Argentine stocks – both from the currency and valuation multiple perspectives (see here). Then in May this year, when the peso started plunging, I warned that it was still too early and there was probably more to come (see here).

I’d thought that the peso was overvalued for a while, not least due to my personal experiences of the dollar-equivalent prices of goods and services in Buenos Aires (I’ve lived here for the past decade). A year ago, one US dollar bought 17.40 pesos. I reckoned there was a case for it to trade around 25-27 pesos, meaning a 30-35% fall was on the cards.

At the time of writing, after another two-day peso rout, one dollar now buys 38.20 pesos (according to Bloomberg). That means the peso lost 54% against the dollar over the past 12 months. This looks like an overshoot, but there’s no getting away from the fact that it’s a currency crisis.

Argentina’s president, Mauricio Macri, made a statement last week that was supposed to inspire confidence in markets. He said the government had asked the IMF to bring forward into 2019 credit promised for 2020, ensuring that the country could meet its obligations. Instead, this was interpreted as a sign of weakness and markets panicked.

The central bank hasn’t helped, as it’s sent out confusing signals. One minute it says that the peso is free to float, the next minute it’s intervening heavily to prop it up. Speculators have clearly scented blood.

Of course, the policy makers are between a rock and a hard place. The government has worked hard to bring down bloated government spending. It’s reduced the budget deficit from high single digits when Macri took office to somewhere around 1-2% expected this year.

A large part of that has been the progressive removal of massive, populist subsidies for utility bills and travel on buses and trains. For example, a couple of years ago my monthly electricity bill ran to the equivalent of US$3.50. (It’s now up over 10 times, but still very cheap by international standards.)

The problem is that both higher utility and travel costs feed into just about everything else. Inflation over the year to July was 31%, partly driven by the 47% increase in utilities and fuel costs and 41% increase in transport costs.

On top of that, the international oil price has rocketed to US$70 per barrel, up from US$48 per barrel a year ago. That’s an increase of +46% in dollar terms and (with the peso now at 38.20 per dollar) +220% priced in pesos.

Another hit came from a major drought, which is a big deal in a country where the majority of exports still come from the agricultural sector. This is reckoned to have knocked as much as 1% off 2018’s GDP, and reduced the inflow of much needed export dollars. Compounding this, the dollar price of soybeans – the most important crop – is down 15% over the past year.

Another big problem is the trade deficit, which was US$8.5 billion during 2017, or 1.4% of GDP. Years of penalising the export sector – with high corporate taxes that included (believe it or not) massive export tariffs on agricultural production (grains and meat) – have yet to be fully corrected. As imports (not least of oil and gas, after years of underinvestment) continue to exceed exports, it’s another drain of dollars from the country.

Now it’s all come to a head. Macri’s honeymoon period is clearly over, which also significantly increases the political risks once more. And then there are the massive corruption scandals to contend with as well.

Many of the senior kirchneristas – ministers and functionaries under Cristina Fernandez de Kirchner, the previous president – are either in jail already or under investigation for corruption. Recent developments have blown open a whole new web of bribes under the previous Kirchner governments (Cristina was preceded by her husband Nestor Kirchner). Cristina herself is under investigation in multiple cases.

How much money is involved is unknown. But evidence suggests that 5% of transport subsidies paid to bus and train companies were being kicked back to the people that doled them out. And public works projects were overpriced by around 20%, again with that margin kicked back to the government people that commissioned them. One forensic accounting firm has done a rough estimate, totting up the numbers over many years, and reckons the final tally could run to between US$20 billion and US$35 billion.

No one really knows the extent, or where the money is deposited or buried (according to witnesses, a lot was paid in bags full of crisp, 100 dollar bills). Macri’s government wants to recover the money, and has offered a 10% of sums found to anyone providing crucial evidence.

Despite all of this, Cristina still has a strong, hard-core support base (as does Brazil’s ex-president Lula – leading the Brazilian polls, although already in jail). Polls suggest 30% of voters would still pick her for president.

The rest of the Peronists are split, and Macri’s support is likely to fall further in the circumstances. Never mind that the alternative could have been far worse, with Argentina already well on the road to Venezuelan-style authoritarianism and hyperinflation.

(The last lot had the printing presses running at full tilt to pay for their populist policies and bloated public sector, and achieved an inflation rate in the high 30s / low 40s by 2014. By now, if they’d stayed power, I’m pretty sure the situation would have been far worse.)

Argentina has new elections in October 2019, and the outcome looks increasingly uncertain. Macri’s only hope is for things to settle down, but the latest currency collapse will keep inflation higher for longer. (I previously expected it to fall sharply, once the process of removing subsidies had been completed this year. But now that’s far less likely in the short run.)

At the same time, strikes are becoming more common again (not that they ever really went away). Workers, understandably, want better wage deals to make up for the rising cost of living.

As of now, the university lecturers are on strike and teachers in Buenos Aires province keep threatening the same. A shame for students perhaps, but not an economic problem in the short run. However, the truck drivers union has just threatened a 36 hour strike and the general union council wants a general strike on 25th September. Those things hurt economic activity.

Are Argentine stocks cheap yet?

Where does this leave Argentine stocks? Still overpriced, in my view, and with plenty of uncertainty still to come.

The following chart shows the last 25 years of the MSCI Argentina index, priced in US dollars. Note, at the latest price it’s now trading well below 2,000, which takes it back to where it was five years ago.

You can clearly see the massive bull market from 2013 until January this year, when the index went up over four times in dollar terms. This never made sense to me, since until late 2015 it was accompanied by increasingly restrictive and desperate economic policies under the Kirchner government. Afterwards the valuations were so high, in relation to on-the-ground realities, that it still made no sense (even with an optimistic economic outlook).

Now the chickens have come home to roost for investors. Argentine stocks are down 57% since their 18th January peak (in dollar terms). Does that mean they’re now cheap? Probably not…yet.

At the end of July, the MSCI Argentina index had a trailing price-to-earnings (P/E) ratio of 15.8. But it’s a high inflation environment (31% over the past year), so we need to adjust for that. Here’s my thinking on how to do that (roughly).

To start with, we need to take account of six month’s worth of inflation (15.5%). That’s the average inflationary effect on corporate results from the month a year ago and the most recent month. That brings the trailing P/E down to 13.8.

Also, the market fell about 9% during August in peso terms (26% in dollar terms, but the peso fell 19%). Adjusting for that as well brings the estimated P/E down to 12.7.

Next, let’s assume inflation now stays around 30% in the coming year (given the higher prices for imported energy and goods, after the currency collapse). That will add into corporate results over time, so again let’s add 15% to earnings. This gives a rough forward P/E of 11.

Is that good value? Nope. Not with inflation running at 30% and with all the current uncertainty. An earnings yield of just 9% simply isn’t enough. As a reminder, US stocks traded in single digits in the late 70s / early 80s when inflation was in the high teens.

There will be a moment when Argentine stocks will be set up for massive profits. Historically speaking, countries with the weakest currencies in the past year have tended to deliver the very best (dollar) results over the next five years (see here for the evidence across 23 emerging markets and 38 years of data).

But investors should wait for the dust to settle first – perhaps in 3 to 6 months (although only time will tell). Speculators still have Argentina in their sights…but no longer in a good way.

In the meantime – to use a term originally coined by Joel Bowman at International Man – Argentina’s an excellent place for a “crisis vacation”. Local prices, in dollar terms, are down about 40% from this time last year, even accounting for peso price inflation. For the international visitor, this is the cheapest it’s been for many, many years.

But the tree-lined streets of Buenos Aires are still just as pleasant to wander down, the beef is still as tender as before, the Malbec still a pleasant accompaniment. Got time for a tango?

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Tropical Cyclone Threatens South Florida, Takes Aim At Gulf Coast

“Tropical Storm Gordon formed over the Florida Keys Monday morning and is poised to bring very heavy rainfall to south Florida on this Labor Day. As Gordon pushes into the Gulf of Mexico this week, it will interact with anomalously warm waters as it churns toward the Gulf Coast.

All things considered, the track of Gordon is fairly high confidence, tracking toward the central Gulf Coast this week. Folks from eastern TX to FL should have a plan in place, regardless of intensity (Source/ @EdValleeWx)

While Gordon will have limited time to rapidly strengthen and will have less than ideal conditions to do so, it still warrants attention for its impacts. Heavy rains, minor storm surge, and gusty winds are all but certain as this system approaches the central Gulf Coast Tuesday afternoon and Tuesday night, regardless of classification.

European EPS illustrating the flooding risk with Gordon and the stalled frontal boundary nearby. 80-90 percent chance of 5″+ rain next 10 days (Source/ @EdValleeWx)

Because of these risks, tropical storm warnings and hurricane watches have been issued for portions of the central Gulf Coast as of midday Monday. Upon landfall, this system may track northeastward into the ag belt, prompting more heavy rains in portions of the Midwest and Ohio Valley late this week into next weekend,” said meteorologist Ed Vallee of Vallee Weather Consulting.

Currently, Tropical Storm Gordon is advancing into the Gulf of Mexico as it continues to bring heavy rain and gusty winds to South Florida. The tropical cyclone is moving west-northwest at 16 miles per hour with sustained winds around 45 miles per hour. The Weather Channel reports that Gordon will head for the northern Gulf Coast landfall on Tuesday as a possible Category 1 hurricane.

Potential Tropical Cyclone Excessive Rainfall Outlook For South Florida 

Trajectory: Tropical Storm Gordon Heads Northwest

Global + Hurricane Models for Gordon 

The National Hurricane Center (NHC) has now declared a hurricane watch from the Mouth of the Pearl River, Mississippi, to the border between Alabama and Florida. The NHC warns that a hurricane watch could mean hurricane-force winds (+74 miles per hour) for New Orleans to Mobile, Alabama, beginning late Tuesday or Tuesday night.

“Tropical storm warnings are posted for South Florida, from Golden Beach on the southeast coast to Bonita Beach on the southwest coast as well as the Keys from Craig Key to Ocean Reef. Tropical storm warnings are also posted from the Okaloosa-Walton County border in Florida westward to east of Morgan City, Louisiana, including Lake Pontchartrain and Lake Maurepas,” stated the Weather Channel.

US Active Weather Alerts Map

Some regions of the northern Gulf Coast could see 3 to 6 inches rainfall Tuesday-Wednesday, especially southeast Louisiana into south Mississippi and Alabama.

As a result, there could be severe flooding in New Orleans and Mobile, Alabama, metro areas. The NHC has posted a flash flood watch for parts of southeast Louisiana, southern Mississippi, and coastal Alabama.

Rainfall Forcast Through Thursday 

The NHC warned that water heights above ground during high tide could pose a serious threat to communities based on the water:

  • Shell Beach, Louisiana, to the Mississippi-Alabama border: 3 to 5 feet
  • Navarre, Florida, to the Mississippi-Alabama border: 2 to 4 feet
  • Shell Beach, Louisiana, to the Mouth of Mississippi River: 2 to 4 feet
  • Mouth of the Mississippi River to the Louisiana-Texas border: 1 to 2 feet

Gulf Coast Flooding Concerns 

As of Monday, tropical-storm-force winds (+39 miles per hour) are possible in the tropical storm warning area in South Florida. By late Tuesday, possible hurricane-force winds could arrive on the northern Gulf Coast. In the tropical storm warning map below, there is a high risk of downed trees and power outages for mainly the Mississippi Gulf Coast.

Force Wind Probabilities For Gulf Coast 

How is social media reacting to the potential threats of Tropical Storm Gordon?

Palm Beach reporter tweets, “Strong rain band hitting Palm Beach from Tropical Storm Gordon”

A Twitter user in Boynton Beach shows a short video of heavy rain and strong winds

CBS12 reporter films heavy rain dumping onto the i-95

Surfers are taking advantage of waves at Haulover Beach

Viewing Gordon from a Miami highrise

Intense winds

Live Stream from Bayfront, Park, Florida

The NHC has just issued another alert this week for yet another storm brewing over the eastern Atlantic Ocean. Stay tuned for more developments.

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It’s Labor Day, Not Union Day

Authored by Mark Mix via The Daily Caller,

This Labor Day, when most Americans pause to celebrate workers and their contributions to our nation, union bosses will again attempt to hijack the holiday to promote their agenda of coercive power over America’s workers.

Despite the union boss talking points, there is still much to celebrate this Labor Day. Workers coast to coast have made substantial gains for workplace freedom in recent months.

Look no further than the Supreme Court ruling in Janus v. AFSCME, which protects the First Amendment, constitutional rights of at least five million public sector workers across the country.

Under the Janus decision, argued and won by the National Right to Work Legal Defense Foundation, every public employee is now protected from being fired for refusing to pay union dues or fees. This leaves the choice to join or financially support a labor union with the individual workers union officials claim to represent.

In other words, union officials must work for rank-and-file workers to earn their dues, instead of employees paying union bosses simply to keep their job.

While Janus recognizes that the First Amendment makes union payments voluntary for public employees, an increasing number of states have been passing Right to Work laws to ensure that private sector workers have the same freedom of choice when it comes to union membership and dues.

Although the heightened levels of accountability are making union officials nervous, the concept of worker freedom from coercion is widely supported by the public. Poll after poll shows that 8 in 10 Americans oppose forced union dues and affiliation.

Since 2012, five states have seen new Right to Work laws go into effect. Not only do these laws protect workers’ free choice, but the elimination of forced unionism also gives a boost to the state economy.

For example, just days after the start of 2017, Kentucky passed a Right to Work law that went into effect immediately. U.S. Labor Department data show that 43,000 net new people were added to Kentucky’s employment rolls last year.

Compare this to Missouri, where a Big Labor forced-dues funded ballot initiative blocked the state’s Right to Work law from taking effect. From 2016 to 2017,  while neighboring Kentucky enjoyed its employment boost, Missouri’s total number of employed people dropped by nearly 3000.

Right to Work brings clear economic benefits and the support of most American workers who like the choice it provides. Yet union bosses claim that giving employees the right to choose to support a labor union is anti-worker.

For union officials, political activism takes precedence over the priorities of the rank-and-file far too often. Its multi-billion dollar political machine – fed by union dues – enables Big Labor to wield immense clout in Washington, D.C., and state capitals, even though much of that money is spent on candidates and causes opposed by many of the workers union officials claim to represent.

For union officials, their privileges pay off. After all, why bother with the hard work of representing employees as long as they are sitting on a forced-dues revenue stream guaranteed by a government-granted special power?

If union membership, representation, and dues payment were strictly voluntary, union officials would have to earn workers’ support, and officials would need to be accountable and responsive to the rank-and-file or else face a loss of revenue. Instead, workers pay billions each year to union bosses simply because they would lose their jobs if they did not.

Perhaps this Labor Day, union officials should take a step back and reexamine how reliant they are on government-granted compulsory powers…and how this causes millions of American workers to view them as out of touch with those they seek to “represent.”

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Russia Blasts US Intel Agencies For “Crudely” Trying To Recruit Russian Oligarchs

Kremlin spokesman Dmitry Peskov blasted the United States for “crudely” trying to recruit Russian oligarchs, after the New York Times published a Friday article accusing the Obama DOJ of unsuccessfully trying to recruit “roughly a half-dozen of Russia’s richest men” between 2014 and 2016. 

The attempt to flip Mr. Deripaska was part of a broader, clandestine American effort to gauge the possibility of gaining cooperation from roughly a half-dozen of Russia’s richest men, nearly all of whom, like Mr. Deripaska, depend on President Vladimir V. Putin to maintain their wealth, the officials said.

The systematic effort to win the cooperation of the oligarchs, which has not previously been revealed, does not appear to have scored any successes. And in Mr. Deripaska’s case, he told the American investigators that he disagreed with their theories about Russian organized crime and Kremlin collusion in the campaign, a person familiar with the exchanges said. The person added that Mr. Deripaska even notified the Kremlin about the American efforts to cultivate him. –NYT

Commenting on the report, Peskov said: 

“The fact is that the US in recent years is working crudely using its intelligence services, trying to recruit Russian citizens, exerting moral and other pressure on them … I think these incidents in the most eloquent manner testify to the attempts to interfere in Russia’s internal affairs ” –Reuters

Of course, the FBI was able to convince Russian aluminum magnate Oleg Deripaska to spend $25 million of his own money to bankroll an FBI-supervised operation to rescue a retired FBI agent – Robert Levinson, who was captured in 2007 while working on a 2007 CIA contract in Iran. 

Deripaska agreed, however the Obama State Department, headed by Hillary Clinton, scuttled a last-minute deal with Iran before Levinson could be released. He hasn’t been heard from since.

FBI agents courted Deripaska in 2009 in a series of secret hotel meetings in Paris; Vienna; Budapest, Hungary, and Washington. Agents persuaded the aluminum industry magnate to underwrite the mission. The Russian billionaire insisted the operation neither involve nor harm his homeland. –The Hill

Deripaska has been accused of being Donald Trump’s “back channel” to Putin through short-lived Trump campaign manager Paul Manafort, however he has vehemently denied this charge and is willing to testify that he also had nothing to do with the infamous “Steele Dossier” assembled by former MI6 spy Christopher Steele. 

A longtime associate of twice-demoted DOJ #4 official Bruce Ohr, Steele worked for Deripaska beginning in 2012 researching a business rival – work which would evolve to the point where the former British spy was interfacing with the Obama administration on his behalf – resulting in Deripaska regaining entry into the United States, where he visited numerous times between 2009 and 2017.  

The State Department tried to keep him from getting a U.S. visa between 2006 and 2009 because they believed he had unspecified connections to criminal elements in Russia as he consolidated power in the aluminum industry. Deripaska has denied those allegations…

Whatever the case, it is irrefutable that after he began helping the FBI, Deripaska regained entry to the United States. And he visited numerous times between 2009 and 2017, visa entry records show. –The Hill

Deripaska is now banned from the United States as one of several Russians sanctioned in April in response to alleged 2016 election meddling. 

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Did The CIA & Saudi Arabia Conspire To Keep 9/11 Details Secret?

Authored by Jeff Stein via NewsWeek.com,

It’s easier to bury uncomfortable facts than to confront them. So this September 11, the ceremonies marking the 2001 attacks on New York and Washington, D.C., will simply honor the dead. In Manhattan, tourists and mourners will gather where the World Trade Center Towers once stood, lowering their heads in memory of the 2,606 who perished there. The services won’t reflect the view that the attacks might well have been prevented.

But for hundreds of families and a growing number of former FBI agents, the grief of another 9/11 ceremony will be laced with barely muted rage: There remains a conspiracy of silence among high former U.S. and Saudi officials about the attacks.

“It’s horrible. We still don’t know what happened,” said Ali Soufan, one of the lead FBI counterterrorism agents whom the CIA kept in the dark about the movements of the future Al-Qaeda hijackers. To Soufan and many other former national security officials, the unanswered questions about the events leading up to the September 11, 2001, attacks dwarf those about the assassination of John F. Kennedy, because “9/11 changed the whole world.” It not only led to the invasions of Afghanistan and Iraq, the fracturing of the Middle East and the global growth of Islamic militantism but also pushed the U.S. closer to being a virtual homeland-security police state.

“I am sad and depressed about it,” said Mark Rossini, one of two FBI agents assigned to the CIA’s Osama bin Laden unit, who says agency managers mysteriously blocked them from informing their headquarters about future Al-Qaeda plotters present in the United States in 2000 and again in the summer of 2001. “It is patently evident the attacks did not need to happen and there has been no justice,” he said.

The authors of a new book on 9/11 hope to refocus public attention on the cover-up. Thoroughly mining the multiple official investigations into the event, John Duffy and Ray Nowosielski find huge holes and contradictions in the official story that 9/11 was merely “a failure to connect the dots.”

Duffy, a left-leaning writer and environmental activist, and Nowosielski, a documentary filmmaker, have nowhere near the prominence of other journalists who have poked holes in the official story, in particular Lawrence Wright, author of The Looming Tower: Al-Qaeda and the Road to 9/11, the Pulitzer Prize–winning book that was turned into a gripping multi-part docudrama on Hulu earlier this year.

But Duffy and Nowosielski come to the story with a noteworthy credential: In 2009 they scored an astounding video interview with Richard Clarke, a White House counterterrorism adviser during the Bill Clinton and George W. Bush administrations. In it, Clarke raged that top CIA officials, including director George Tenet, had withheld crucial information from him about Al-Qaeda’s plotting and movements, including the arrival in the U.S. of future hijackers Khalid al-Mihdhar and Nawaf al-Hazmi. In The Watchdogs Didn’t Bark: The CIA, NSA, and the Crimes of the War on Terror, the authors assemble a compelling case of a government-wide cover-up of Saudi complicity in the affair.

In 2002, Tenet swore to Congress that he wasn’t aware of the imminent threat because it came in a cable that wasn’t marked urgent—and “no one read it.” But his story was shredded five years later when Senators Ron Wyden and Kit Bond forced loose an executive summary of the CIA’s own internal investigation of 9/11, which stated that “some 50 to 60 individuals read one or more of the six Agency cables containing travel information related to these terrorists.”

Clarke went ballistic. Until then, he had trusted Tenet, a close colleague and friend, to tell the truth. In 2009, despairing at the lack of media traction on the astounding disclosure, he wrote a book about the duplicity, Your Government Failed You, which was largely ignored. So when Duffy and Nowosielski came calling, he welcomed them.

“I believed, for the longest time, that this was one or two low-level desk officers who got this [information about Hazmi and Mihdhar] and somehow didn’t realize the significance,” he told them. But “50—five oh—50 CIA officers knew this, and they included [Tenet and] all kinds of people who were regularly talking to me? Saying I’m pissed doesn’t begin to describe it.”

All these years later, it’s still unclear why the CIA would keep such crucial details about Al-Qaeda movements from the FBI. Clarke and other insiders suspect that the spy agency had a deeply compartmented plan in the works to recruit Hazmi, Mihdhar and perhaps other Al-Qaeda operatives as double agents. If the FBI discovered they were in California, the theory goes, it would have demanded their arrest. When the CIA’s recruitment ploy fizzled, Tenet and company hid the details from Clarke lest they be accused of “malfeasance and misfeasance,” he said.

It’s the only logical explanation for why the presence of Hazmi and Mihdhar was kept from him until after the attacks, Clarke said. “They told us everything—except this,” he says in the video.

Tenet and two of his counterterrorism deputies, Rich Blee and Cofer Black, issued a statement calling Clarke’s theory “reckless and profoundly wrong.” But now Clarke has company. Duffy and Nowosielski found other key former FBI counterterrorism agents and officials who have developed deep doubts about Tenet’s story. The only element they disagree on is which officials were responsible for the alleged subterfuge.

“I think if there were some conscious effort” not to tell the bureau what was going on, Dale Watson, a former FBI deputy chief of counterterrorism told them, “it was probably” carried out below Tenet, Blee and Black, by managers of the CIA’s Osama bin Laden unit.

But Pat D’Amuro, an even more senior former FBI counterterrorism official, told them, “There’s no doubt in my mind that [withholding the information] went up further in the agency” than those managers. “And why they didn’t send it over, to this day, I don’t know why.”

And then there’s the continuing mystery of Saudi complicity with the hijackers. Duffy and Nowosielski offer a tightly focused update on what’s been learned about Saudi support for Al-Qaeda in recent years. Back in 2004, the official 9/11 Commission said it found no evidence that the “Saudi government as an institution, or senior Saudi officials individually funded” Al-Qaeda.

A year later, the highly redacted CIA inspector general’s report cracked open another window, saying that some agency officers had “speculated” that “dissident sympathizers within the government” (i.e., religious extremists) may have supported bin Laden. Subsequent investigations have revealed that officials from the kingdom’s Islamic affairs ministry were actively helping the hijackers get settled in California.

Such information spurred several hundred families of the 9/11 attack victims to file suit against the Saudi government in federal court in New York last year, seeking unspecified monetary damages.

“Saudi intelligence has admitted that they knew who these two guys were,” Andrew Maloney, an attorney for families, told Newsweek last week. “They knew they were Al-Qaeda the day they arrived in Los Angeles. So any notion from the Saudi government saying, ‘Oh, we just help out all Saudis here’ is false. They knew. And the CIA knew.”

The kingdom has turned over some 6,800 pages of documents, “mostly in Arabic,” that Maloney’s team is in the process of translating. “There’s some interesting things in there,” he said, “and some clear gaps.” He said he’ll return to court in October to press for more documents.

He also wants to depose Saudi officials, particularly Fahad al-Thumairy, a former Los Angeles consular official and imam of a Culver City, California, mosque attended by the hijackers. In 2003, Thumairy was intercepted after he landed in Los Angeles on a flight from Germany and deported from the U.S. “because of suspected terrorist links.” But he still works for the government in Riyadh, Maloney said. “Can you believe that?”

In April, Maloney subpoenaed the FBI for documents on Thumairy and Omar al-Bayoumi, a suspected Saudi spy in the U.S. who was also in contact with the hijackers. The bureau has not responded, so on September 11 he plans to file “a formal motion to compel the FBI” to produce the documents. His motion follows a sworn statement by Steven Moore, the FBI agent who headed the bureau’s investigation into the hijacking of the plane that flew into the Pentagon, charging the 9/11 Commission with misleading the public when it said it “had not found evidence” of Saudi assistance to Hazmi and Mihdhar.

“There was clearly evidence that Thumairy provided assistance to Hazmi and Mihdhar,” Moore wrote. And “based on the proof in our investigation,” he added, “Bayoumi himself was a clandestine agent and associated with radical extremists, including Thumairy.”

Moore’s statement was first reported by the Florida Bulldog, a Fort Lauderdale news site that has been investigating the hijackers’ contacts with flight schools. “To my knowledge,” Moore stated, “Thumairy has never been the subject of a genuine law enforcement interview conducted by the actual agents who investigated him.”

Maloney’s additional targets are other FBI, CIA, State Department and Treasury Department personnel and documents. “There are a lot of people, former agents—I won’t identify who or what agencies—who have talked to us,” he said, but others, especially in the CIA’s bin Laden unit, “will never talk to us or will only talk to us if they are given some kind of blanket immunity.”  

Getting access to them, he said, would probably require an executive order from President Donald Trump—an unlikely outcome given his administration’s strong backing for the Saudi monarchy.

There may be public support for Maloney’s endeavors. A 2016 poll found a slight majority of Americans (54.3 percent) believe that the government is hiding something about the 9/11 attacks. Then again, a considerable number of 9/11 “truthers” embrace conspiracy theories positing that the attacks were “an inside job” by the Bush administration and/or Israel and abetted by explosives planted in one of the World Trade Center towers.

The September 11 memorial in lower Manhattan.SPENCER PLATT/GETTY IMAGES

But they are right about Saudi resistance to fully disclosing its relations with the hijackers. Last year, agents of the monarchy were discovered surreptitiously funding a PR effort to derail a congressional bill permitting a 9/11 families group to sue the kingdom for damages. Last September, the family group filed a 17-page complaint with the Justice Department.

Terry Strada, a leader of the group 9/11 Families & Survivors United for Justice Against Terrorism, will mourn again this year, but not at the site where the towers once stood and her husband died. She plans to attend “a private service” at the Shrine of St. Joseph in Stirling, New Jersey, which she said has “a beautiful and solemn space” dedicated to all who died in the 9/11 attacks.

But she is also full of fury at the government’s refusal to release all it knows about the run-up to the attacks. “It’s very sad that we’re still being kept in the dark about it. It’s frustrating. It angers me,” she told Newsweek. “It’s a slap in the face. They think they’re above the law and don’t have to respond to the families—and the world. It’s disgusting.”

But Strada evinces even more disdain for the Saudis. Responding to Secretary of State Mike Pompeo’s August 20 message “wishing Muslims around the world a blessed Eid al-Adha,” she tweeted, “Seriously???”

Strada added, “The Saudis promote & finance the most virulent hatred toward Americans than any other nation. Murdered 3,000 on Sept 11.” The “9/11 families,” she wrote, “will #NEVERFORGET. #FreeTheTruth”

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Company Making Bulletproof Backpacks For US Students Flooded With Orders

Shopping for back-to-school items usually consists of calculators, pens, notebooks, and if your family is in the upper echelon of society — perhaps an Ipad. But with a nation in chaos and desperate to avoid another school shooting, it has become increasingly common for teachers and students, and even some parents to now demand bulletproof backpacks.

Right before our eyes, the nation is radically shifting as the pain from recent school shootings have swayed the cognitive thought process of many parents to accept militarization within education facilities.

Next thing you will know, the minivan is swapped out with an Audi Q5 Security (Audi’s first armored vehicle on a production line) and the children are all wearing kevlar infused backpacks similar to the tactical gear worn by US soldiers.

In the last 18 years, approximately 25 percent of all of the 160 mass shooting incidents took place in schools, according to the FBI. In response, school districts have taken drastic measures towards gun control on campuses, including surveillance cameras, security locks, metal detectors, bullet resistant windows, and even implementing resource officers during school hours.

After the horrific shooting of 17 kids at Marjory Stoneman Douglas High School in February 2018, the civilian defense industry as a whole experienced an influx of sales from school districts and worried parents. The hottest item on the block is the bulletproof backpack and there are several companies that have reported booming sales.

Florida-based Guard Dog Security specializes in non-lethal personal security and self-defense products designed to protect people from small arms fire. Guard Dog President Yasir Sheikh told Fortune, “demand has definitely gone up” in recent years, and explained that sales often increase after a school or mass shooting.

Sheikh added that the company has seen increased sales from parents buying bulletproof backpacks for the 2018 school year.

Guard Dog products recently went mainstream, which it seems as the company was able to attract a significant buyer that enabled them to launch their products in major retailers including Home Depot, Office Depot, Walmart, Amazon, and even Bed Bath & Beyond.

Masada Armor, based in the northern Israeli town of Julis, has attracted hundreds of American buyers – demanding bulletproof schoolbags in the wake of the South Florida shooting.

“We designed a bullet-proof backpack at the request of our distributors in the United States after the huge trauma caused by the February shooting in Florida,” Snir Koren, CEO of Masada Armor, told AFP on Thursday.

“Since then, orders from the United States have been coming in,” Koren said in Hebrew.

“In two months we have sold hundreds and are gearing up to increase production rates to 500 units per month,” he said, adding that the basic model, which weighs around three kilograms (six pounds), protects against 9mm pistol fire and sells for USD 500. For an extra USD 200, there is an improved version that protects against high-velocity rifles such as the AR-15 and the M-16 and Kalashnikov assault rifles.

In a sign of times, Fox News held a segment on bulletproof backpacks with the La Roux song,”Bulletproof” leading the intro, which caused La Roux to protest. She told Billboard: “Using ‘Bulletproof,’ a song I wrote about relationships, for a piece like this is abhorrent. I have never, and would never approve my music to be used in this way.”

Media Matters accused Maria Bartiromo of glamorizing bulletproof backpacks and clothing for kids in the back-to-school segment.

Bartiromo said, “Oh my goodness. It’s incredible that this has come to this though, that we need bulletproof clothing,” and then rapidly changed the subject. “Some of these things are quite fashion-forward.”

With the 2018 school year about to begin, it seems as the hottest item on many back-to-school wish lists are bulletproof backpacks. Great job America, the militaziation of education facilities is almost complete.

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Michael Moore Flashback: In Praise Of Venezuela

Authored by Mike Shedlock via MishTalk,

“Oil for the People”: Michael Moore is in praise of Chavez ending poverty in Venezuela.

I captured that Tweet as an image in case Moore deletes it.

It was retweeted 6,684 times. 1,862 fools liked it.

Michael Moore, please check this out.

Oil for the People Question

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Buzz Aldrin Blasts ‘First Man’ Movie Missing Flag: “Proud To Be An American”

While Ryan Gosling (and Neil Armstrong’s two sons) proclaim that the decision to not include the monumental moment of the planting of the American flag on the moon’s surface in the movie ‘First Man’ was because “the achievement transcended countries and borders,” adding that “it was widely seen as a human achievement;” it seems that the second man on the moon feels a little differently – and a little more patriotically – about the massive American achievement of making it to the moon’s surface (and back).

Buzz Aldrin took to Twitter to explain how he felt about America’s achievement: “Proud to be an American”

Buzz is not alone. It seems Gosling and  Oscar-winning director Damian Chazelle have come under fire for their recent comments with some asking quite awkward questions…

“Human achievement?” Gosling needs to go back to school… this was a historic race between USA and Soviet Union. JFK fired the starting gun and the flag planting was the declaration of who won.  Where did Gosling go to school?”

“Hey if the rest of the world could pay us back billions of dollars for the Apollo program, that’d be great. Because it was a human achievement, you know?”

When will this be renamed “The Great Wall Of Human Achievement”?

Finally, we leave it to Buzz to have the last word – or picture…

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How The Department Of Homeland Security Created A Deceptive Tale Of Russia Hacking US Voter Sites

Authored by Gareth Porter via ConsortiumNews.com,

The narrative about Russian cyberattacks on American election infrastructure is a self-interested abuse of power by DHS based on distortion of evidence…

The narrative of Russian intelligence attacking state and local election boards and threatening the integrity of U.S. elections has achieved near-universal acceptance by media and political elites.  And now it has been accepted by the Trump administration’s intelligence chief, Dan Coats, as well. 

But the real story behind that narrative, recounted here for the first time, reveals that the Department of Homeland Security (DHS) created and nurtured an account that was grossly and deliberately deceptive. 

DHS compiled an intelligence report suggesting hackers linked to the Russian government could have targeted voter-related websites in many states and then leaked a sensational story of Russian attacks on those sites without the qualifications that would have revealed a different story. When state election officials began asking questions, they discovered that the DHS claims were false and, in at least one case, laughable.

The National Security Agency and special counsel Robert Mueller’s investigating team have also claimed evidence that Russian military intelligence was behind election infrastructure hacking, but on closer examination, those claims turn out to be speculative and misleading as well. Mueller’s indictment of 12 GRU military intelligence officers does not cite any violations of U.S. election laws though it claims Russia interfered with the 2016 election.

A Sensational Story 

On Sept. 29, 2016, a few weeks after the hacking of election-related websites in Illinois and Arizona, ABC News carried a sensational headline: “Russian Hackers Targeted Nearly Half of States’ Voter Registration Systems, Successfully Infiltrated 4.” The story itself reported that “more than 20 state election systems” had been hacked, and four states had been “breached” by hackers suspected of working for the Russian government. The story cited only sources “knowledgeable” about the matter, indicating that those who were pushing the story were eager to hide the institutional origins of the information.

(Erik Hersman/CC BY 2.0)

Behind that sensational story was a federal agency seeking to establish its leadership within the national security state apparatus on cybersecurity, despite its limited resources for such responsibility. In late summer and fall 2016, the Department of Homeland Security was maneuvering politically to designate state and local voter registration databases and voting systems as “critical infrastructure.” Such a designation would make voter-related networks and websites under the protection a “priority sub-sector” in the DHS “National Infrastructure Protection Plan, which already included 16 such sub-sectors. 

DHS Secretary Jeh Johnson and other senior DHS officials consulted with many state election officials in the hope of getting their approval for such a designation. Meanwhile, the DHS was finishing an intelligence report that would both highlight the Russian threat to U.S. election infrastructure and the role DHS could play in protecting it, thus creating political impetus to the designation. But several secretaries of state—the officials in charge of the election infrastructure in their state—strongly opposed the designation that Johnson wanted.   

On Jan. 6, 2017—the same day three intelligence agencies released a joint “assessment” on Russian interference in the election—Johnson announced the designation anyway.

Media stories continued to reflect the official assumption that cyber attacks on state election websites were Russian-sponsored. Stunningly, The Wall Street Journal reported in December 2016 that DHS was itself behind hacking attempts of Georgia’s election database.

The facts surrounding the two actual breaches of state websites in Illinois and Arizona, as well as the broader context of cyberattacks on state websites, didn’t support that premise at all.

In July, Illinois discovered an intrusion into its voter registration website and the theft of personal information on as many as 200,000 registered voters. (The 2018 Mueller indictments of GRU officers would unaccountably put the figure at 500,000.) Significantly, however, the hackers only had copied the information and had left it unchanged in the database. 

That was a crucial clue to the motive behind the hack. DHS Assistant Secretary for Cyber Security and Communications Andy Ozment told a Congressional committee in late September 2016 that the fact hackers hadn’t tampered with the voter data indicated that the aim of the theft was not to influence the electoral process. Instead, it was “possibly for the purpose of selling personal information.” Ozment was contradicting the line that already was being taken on the Illinois and Arizona hacks by the National Protection and Programs Directorate and other senior DHS officials. 

In an interview with me last year, Ken Menzel, the legal adviser to the Illinois secretary of state, confirmed what Ozment had testified. “Hackers have been trying constantly to get into it since 2006,” Menzel said, adding that they had been probing every other official Illinois database with such personal data for vulnerabilities as well.  “Every governmental database—driver’s licenses, health care, you name it—has people trying to get into it,” said Menzel.

In the other successful cyberattack on an electoral website, hackers had acquired the username and password for the voter database Arizona used during the summer, as Arizona Secretary of State Michele Reagan learned from the FBI. But the reason that it had become known, according to Reagan in an interview with Mother Jones, was that the login and password had shown up for sale on the dark web—the network of websites used by cyber criminals to sell stolen data and other illicit wares.  

Furthermore, the FBI had told her that the effort to penetrate the database was the work of a “known hacker” whom the FBI had monitored “frequently” in the past. Thus, there were reasons to believe that both Illinois and Arizona hacking incidents were linked to criminal hackers seeking information they could sell for profit.

Meanwhile, the FBI was unable to come up with any theory about what Russia might have intended to do with voter registration data such as what was taken in the Illinois hack.  When FBI Counterintelligence official Bill Priestap wasasked in a June 2017 hearing how Moscow might use such data, his answer revealed that he had no clue: “They took the data to understand what it consisted of,” said the struggling Priestap, “so they can affect better understanding and plan accordingly in regards to possibly impacting future elections by knowing what is there and studying it.”  

The inability to think of any plausible way for the Russian government to use such data explains why DHS and the intelligence community adopted the argument, as senior DHS officials Samuel Liles and Jeanette Manfra put it, that the hacks “could be intended or used to undermine public confidence in electoral processes and potentially the outcome.” But such a strategy could not have had any effect without a decision by DHS and the U.S. intelligence community to assert publicly that the intrusions and other scanning and probing were Russian operations, despite the absence of hard evidence. So DHS and other agencies were consciously sowing public doubts about U.S. elections that they were attributing to Russia.

DHS Reveals Its Self-Serving Methodology

In June 2017, Liles and Manfra testified to the Senate Intelligence Committee that an October 2016 DHS intelligence report had listed election systems in 21 states that were “potentially targeted by Russian government cyber actors.”  They revealed that the sensational story leaked to the press in late September 2016 had been based on a draft of the DHS report. And more importantly, their use of the phrase “potentially targeted” showed that they were arguing only that the cyber incidents it listed were possible indications of a Russian attack on election infrastructure.  

Furthermore, Liles and Manfra said the DHS report had “catalogued suspicious activity we observed on state government networks across the country,” which had been “largely based on suspected malicious tactics and infrastructure.” They were referring to a list of eight IP addresses an August 2016 FBI “flash alert” had obtained from the Illinois and Arizona intrusions, which DHS and FBI had not been able to  attribute to the Russian government.

Manfra: No doubt it was the Russians. (C-SPAN)

The DHS officials recalled that the DHS began to “receive reports of cyber-enabled scanning and probing of election-related infrastructure in some states, some of which appeared to originate from servers operated by a Russian company.” Six of the eight IP addresses in the FBI alert were indeed traced to King Servers, owned by a young Russian living in Siberia. But as DHS cyber specialists knew well, the country of ownership of the server doesn’t prove anything about who was responsible for hacking: As cybersecurity expert Jeffrey Carrpointed out, the Russian hackers who coordinated the Russian attack on Georgian government websites in 2008 used a Texas-based company as the hosting provider.  

The cybersecurity firm ThreatConnect notedin 2016 that one of the other two IP addresses had hosted a Russian criminal market for five months in 2015. But that was not a serious indicator, either. Private IP addresses are reassigned frequently by server companies, so there is not a necessary connection between users of the same IP address at different times.

The DHS methodology of selecting reports of cyber incidents involving election-related websites as “potentially targeted” by Russian government-sponsored hackers was based on no objective evidence whatever. The resulting list appears to have included any one of the eight addresses as well as any attack or “scan” on a public website that could be linked in any way to elections. 

This methodology conveniently ignored the fact that criminal hackers were constantly trying to get access to every database in those same state, country and municipal systems. Not only for Illinois and Arizona officials, but state electoral officials.

In fact, 14 of the 21 states on the list experienced nothing more than the routine scanning that occurs every day,according to the Senate Intelligence Committee. Only six involved what was referred to as a “malicious access attempt,” meaning an effort to penetrate the site. One of them was in Ohio, where the attempt to find a weakness lasted less than a second and was considered by DHS’s internet security contractor a “non-event” at the time.

State Officials Force DHS to Tell the Truth

For a year, DHS did not inform the 21 states on its list that their election boards or other election-related sites had been attacked in a presumed Russian-sponsored operation. The excuse DHS officials cited was that it could not reveal such sensitive intelligence to state officials without security clearances. But the reluctance to reveal the details about each case was certainly related to the reasonable expectation that states would publicly challenge their claims, creating a potential serious embarrassment.  

On Sept. 22, 2017, DHS notified 21 states about the cyber incidents that had been included in the October 2016 report. The public announcement of the notifications said DHS had notified each chief election officer of “any potential targeting we were aware of in their state leading up to the 2016 election.” The phrase “potential targeting” again telegraphed the broad and vague criterion DHS had adopted, but it was ignored in media stories.

But the notifications, which took the form of phone calls lasting only a few minutes, provided a minimum of information and failed to convey the significant qualification that DHS was only suggesting targeting as a possibility. “It was a couple of guys from DHS reading from a script,” recalled one state election official who asked not to be identified. “They said [our state] was targeted by Russian government cyber actors.”

A number of state election officials recognized that this information conflicted with what they knew. And if they complained, they got a more accurate picture from DHS. After Wisconsin Secretary of State Michael Haas demanded further clarification, he got an email response from a DHS official  with a different account. “[B]ased on our external analysis,” the official wrote, “the WI [Wisconsin] IP address affected belongs to the WI Department of Workforce Development, not the Elections Commission.”

California Secretary of State Alex Padilla said DHS initially had notified his office “that Russian cyber actors ‘scanned’ California’s Internet-facing systems in 2016, including Secretary of State websites.” But under further questioning, DHSadmitted to Padilla that what the hackers had targeted was the California Department of Technology’s network.

Texas Secretary of State Rolando Pablos and Oklahoma Election Board spokesman Byron Dean also denied that any state website with voter- or election-related information had been targeted, and Pablos demanded that DHS “correct its erroneous notification.”  

Despite these embarrassing admissions, a statement issued by DHS spokesman Scott McConnell on Sept. 28, 2017 said the DHS “stood by” its assessment that 21 states “were the target of Russian government cyber actors seeking vulnerabilities and access to U.S. election infrastructure.” The statement retreated from the previous admission that the notifications involved “potential targeting,” but it also revealed for the first time that DHS had defined “targeting” very broadly indeed. 

It said the category included “some cases” involving “direct scanning of targeted systems” but also cases in which “malicious actors scanned for vulnerabilities in networks that may be connected to those systems or have similar characteristics in order to gain information about how to later penetrate their target.” 

It is true that hackers may scan one website in the hope of learning something that could be useful for penetrating another website, as cybersecurity expert Prof. Herbert S. Lin of Stanford University explained to me in an interview. But including any incident in which that motive was theoretical meant that any state website could be included on the DHS list, without any evidence it was related to a political motive.

Arizona’s further exchanges with DHS revealed just how far DHS had gone in exploiting that escape clause in order to add more states to its “targeted” list. Arizona Secretary of State Michele Reagan tweeted that DHS had informed her that “the Russian government targeted our voter registration systems in 2016.” After meeting with DHS officials in early October 2017, however, Reagan wrote in a blog post that DHS “could not confirm that any attempted Russian government hack occurred whatsoever to any election-related system in Arizona, much less the statewide voter registration database.” 

What the DHS said in that meeting, as Reagan’s spokesman Matt Roberts recounted to me, is even more shocking. “When we pressed DHS on what exactly was actually targeted, they said it was the Phoenix public library’s computers system,” Roberts recalled.

National Security Agency headquarters in Fort Meade, Md. (Wikimedia)

In April 2018, a CBS News “60 Minutes” segment reported that the October 2016 DHS intelligence report had included the Russian government hacking of a “county database in Arizona.” Responding to that CBS report, an unidentified “senior Trump administration official” who was well-briefed on the DHS report told Reuters that “media reports” on the issue had sometimes “conflated criminal hacking with Russian government activity,” and that the cyberattack on the target in Arizona “was not perpetrated by the Russian government.”  

NSA Finds a GRU Election Plot

NSA intelligence analysts claimed in a May 2017 analysis to have documented an effort by Russian military intelligence (GRU) to hack into U.S. electoral institutions. In an intelligence analysis obtained by The Intercept and reported in June 2017, NSA analysts wrote that the GRU had sent a spear-phishing email—one with an attachment designed to look exactly like one from a trusted institution but that contains malware design to get control of the computer—to a vendor of voting machine technology in Florida. The hackers then designed a fake web page that looked like that of the vendor. They sent it to a list of 122 email addresses NSA believed to be local government organizations that probably were “involved in the management of voter registration systems.” The objective of the new spear-phishing campaign, the NSA suggested, was to get control of their computers through malware to carry out the exfiltration of voter-related data.

But the authors of The Intercept story failed to notice crucial details in the NSA report that should have tipped them off that the attribution of the spear-phishing campaign to the GRU was based merely on the analysts’ own judgment—and that their judgment was faulty. 

The Intercept article included a color-coded chart from the original NSA report that provides crucial information missing from the text of the NSA analysis itself as well as The Intercept’s account. The chart clearly distinguishes between the elements of the NSA’s account of the alleged Russian scheme that were based on “Confirmed Information” (shown in green) and those that were based on “Analyst Judgment” (shown in yellow). The connection between the “operator” of the spear-phishing campaign the report describes and an unidentified entity confirmed to be under the authority of the GRU is shown as a yellow line, meaning that it is based on “Analyst Judgment” and labeled “probably.” 

A major criterion for any attribution of a hacking incident is whether there are strong similarities to previous hacks identified with a specific actor. But the chart concedes that “several characteristics” of the campaign depicted in the report distinguish it from “another major GRU spear-phishing program,” the identity of which has been redacted from the report. 

The NSA chart refers to evidence that the same operator also had launched spear-phishing campaigns on other web-based mail applications, including the Russian company “Mail.ru.”  Those targets suggest that the actors were more likely Russian criminal hackers rather than Russian military intelligence.

Even more damaging to its case, the NSA reports that the same operator who had sent the spear-phishing emails also had sent a test email to the “American Samoa Election Office.” Criminal hackers could have been interested in personal information from the database associated with that office. But the idea that Russian military intelligence was planning to hack the voter rolls in American Samoa, an unincorporated U.S. territory with 56,000 inhabitants who can’t even vote in U.S. presidential elections, is plainly risible.

The Mueller Indictment’s Sleight of Hand

The Mueller indictment of GRU officers released on July 13 appeared at first reading to offer new evidence of Russian government responsibility for the hacking of Illinois and other state voter-related websites. A close analysis of the relevant paragraphs, however, confirms the lack of any real intelligence supporting that claim. 

Mueller accused two GRU officers of working with unidentified “co-conspirators” on those hacks. But the only alleged evidence linking the GRU to the operators in the hacking incidents is the claim that a GRU official named Anatoly Kovalev and “co-conspirators” deleted search history related to the preparation for the hack after the FBI issued its alert on the hacking identifying the IP address associated with it in August 2016. 

A careful reading of the relevant paragraphs shows that the claim is spurious. The first sentence in Paragraph 71 says that both Kovalev and his “co-conspirators” researched domains used by U.S. state boards of elections and other entities “for website vulnerabilities.”  The second says Kovalev and “co-conspirators” had searched for “state political party email addresses, including filtered queries for email addresses listed on state Republican Party websites.” 

Mueller: Don’t read the fine print. (The White House/Wikimedia)

Searching for website vulnerabilities would be evidence of intent to hack them, of course, but searching Republican Party websites for email addresses is hardly evidence of any hacking plan. And Paragraph 74 states that Kovalev “deleted his search history”—not the search histories of any “co-conspirator”—thus revealing that there were no joint searches and suggesting that the subject Kovalev had searched was Republican Party emails. So any deletion by Kovalev of his search history after the FBI alert would not be evidence of his involvement in the hacking of the Illinois election board website. 

With this rhetorical misdirection unraveled, it becomes clear that the repetition in every paragraph of the section of the phrase “Kovalev and his co-conspirators” was aimed at giving the reader the impression the accusation is based on hard intelligence about possible collusion that doesn’t exist.

The Need for Critical Scrutiny of DHS Cyberattack Claims

The DHS campaign to establish its role as the protector of U.S. electoral institutions is not the only case in which that agency has used a devious means to sow fear of Russian cyberattacks. In December 2016, DHS and the FBI published a long list of IP addresses as indicators of possible Russian cyberattacks. But most of the addresses on the list had no connection with Russian intelligence, as former U.S. government cyber-warfare officer Rob Lee found on close examination.

When someone at the Burlington, Vt., Electric Company spotted one of those IP addresses on one of its computers, the company reported it to DHS. But instead of quietly investigating the address to verify that it was indeed an indicator of Russian intrusion, DHS immediately informed The Washington Post. The result was a sensational story that Russian hackers had penetrated the U.S. power grid. In fact, the IP address in question was merely Yahoo’s email server, as Rob Lee told me, and the computer had not even been connected to the power grid. The threat to the power grid was a tall tale created by a DHS official, which the Post had to embarrassingly retract.  

Since May 2017, DHS, in partnership with the FBI, has begun an even more ambitious campaign to focus public attention on what it says are Russian “targeting” and “intrusions” into “major, high value assets that operate components of our Nation’s critical infrastructure”, including energy, nuclear, water, aviation and critical manufacturing sectors.  Any evidence of such an intrusion must be taken seriously by the U.S. government and reported by news media. But in light of the DHS record on alleged threats to election infrastructure and the Burlington power grid, and its well-known ambition to assume leadership over cyber protection, the public interest demands that the news media examine DHS claims about Russian cyber threats far more critically than they have up to now.

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Watch Live: Chicago Protesters Hope To Shut Down O’Hare Airport Over Gun Violence

Anti-violence protesters frustrated with Chicago gun violence are planning to march on a section of the Kennedy Expressway near O’Hare International Airport at noon Monday – the third such attempt to disrupt a major city roadway since July – in an effort to shut down access to O’Hare International Airport,

The march’s organizer, the Rev. Gregory Livingston, said Monday morning that he didn’t know how many protesters would show up. “Enough to shut the highway down,” he said quoted by the Chicago Tribune.

If enough people show up, the protest could lead to major travel disruptions on the holiday weekend at the nation’s second-busiest airport. Livingston shared an image on Twitter on Sunday laying out his demands as part of the effort. He is calling for legislation that requires 20% of the city’s workforce to be African-American; greater investment on the city’s South and West sides; resources for black-led anti-violence initiatives.

The demonstrators have also called for the resignation of mayor Rahm Emanuel, who is seeking a third term in the February 2019 city election.

The marchers have been protesting the city’s unrelenting gun violence. So far this year, more than 2,000 people have been shot in Chicago, which is fewer people than were shot around this time last year, but still more than in other recent years, according to Tribune data.

Livingston explained that his demands are about desegregating people and resources: “Segregation is a tool of racism that indoctrinates one group with irrational fears and dehumanizes another.”

Major David Byrd, spokesman for the Illinois State Police, told USA Today that authorities will prevent the protest from interrupting traffic, but did not detail how marchers would be stopped from entering the highway.

About 15 Chicago Police Department bicycle officers were near the protest scene Monday morning, as were suburban, state and city police squad cars. Tow trucks and state dump trucks lined a ramp onto the Kennedy. “At this time, we expect travel to remain uninterrupted,” said Illinois State Police Lt. Matt Boerwinkle on Friday. He declined to discuss specific plans to deal with the march along Interstate 90.

However, as of 11:15 a.m., the Tribune reports that police far outnumbered a small continent of a dozen or so protesters gathered on a street corner in 85-degree heat. Protesters carries signs that read “North Side against white supremacy,” and “White silence = violence.”

The Labor Day protest comes on the heels of an Aug. 2 march that briefly blocked Lake Shore Drive, then made its way through Lakeview and culminated in a short demonstration outside Wrigley Field. The summer’s largest protest took place July 7, when demonstrators led by the Rev. Michael Pfleger marched in the traffic lanes of the Dan Ryan Expressway.

Thousands walked on the Dan Ryan Expressway in an anti-violence march led by the Rev. Michael Pfleger and other religious leaders on Saturday, July 7, 2018. (Abel Uribe / Chicago Tribune)

On Monday, Livingston noted that police didn’t make arrests at the earlier marches. “They didn’t make any arrests on the Ryan,” he said. “What is so special about the Kennedy?”

Chicago police spokesman Anthony Guglielmi said marching near O’Hare makes it “a much different situation” than the Dan Ryan event. In the runup to that protest, state police threatened arrests, only to allow marchers partial access to the highway. On-scene negotiations between Pfleger and Chicago police led to the eventual shutdown of all northbound lanes. The resulting shutdown led to a social media spat between Gov. Bruce Rauner and Mayor Rahm Emanuel, with the governor expressing his displeasure that the march caused “chaos.”

While Guglielmi said that Chicago police tried to work with Livingston on several possible locations for Monday’s march that would not have potential ramifications on O’Hare, Livingston stuck with his Kennedy Expressway route. If marchers try to block traffic on Interstate 190 at the entrance to O’Hare or otherwise attempt to block traffic, that could have federal implications and lead to arrests, Guglielmi said.

Livingston, of New Hope Baptist Church in West Humboldt Park, is an unsuccessful aldermanic candidate who also put together the Lake Shore Drive demonstration, which drew about 200 people. He said earlier that it’s important to keep the protest momentum going — even when people might want to sit back and relax on a three-day holiday weekend.

Look, no one wants to be on the expressway on Labor Day, but … I pray to God that this holiday weekend is peaceful,” Livingston said. “We are just tired of all the mayhem, and we want to work to make things better. That’s really about it.”

According to USA Today there have been 368 murders in the city of Chicago through August, a 20% decrease through the same period last year. The city attracted national headlines last month after one of its most violent weekends of the year left 12 people dead and 62 wounded.

According to the Hill, President Trump, who has publicly feuded with Emanuel and may even side with today’s protest group, took notice of the violence and blamed it on city leadership.

“That’s bad stuff happening, and probably I guess you have to take from the leadership,” Trump said. “There’s no reason in a million years that something like that should be happening in Chicago.”

Live feed from the event courtesy of WGN TV:

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