Category: zerohedge

Submitted by Michael Snyder of The American Dream blog,

On July 4th, the United States will celebrate Independence Day once again.  But who in the world are we trying to kid?  Our founders intended to create a society where freedom and liberty would be maximized, but that is not what America looks like today.  Instead, we live in a country that literally has millions of laws, rules and regulations.  We have a government that is obsessed with spying on the entire planet and that tries to watch, monitor, track and record as much information about all of us as it possibly can.  A “Big Brother” surveillance grid is being constructed all around us, and our militarized police are becoming more brutal with each passing day.  Sadly, most Americans don’t seem too alarmed by any of this.  In fact, a new Gallup survey has found that 79 percent of Americans are “satisfied” with the level of freedom in this nation.  That is a very alarming statistic.

If most people believe that everything is “just fine”, then our leaders are going to feel free to keep doing the same things that they have been doing.

That is why it is so frustrating that so many American “sheeple” appear to be so apathetic about the loss of our freedoms and our liberties.

But it was not all bad news in the Gallup survey.  Let’s take a look at the good news first…

The Good News

The good news is that Gallup has asked this question many times before, and over the years the percentage of Americans that are satisfied with the level of freedom in this country has been going down.  In fact, the latest figure of 79 percent is the lowest number that Gallup has ever recorded, and it puts us below 35 other countries…

Seventy-nine percent of US residents are satisfied with their level of freedom, down from 91 percent in 2006, according to the Gallup survey, released Tuesday.

 

That 12-point drop pushes the United States from among the highest in the world in terms of perceived freedom to 36th place, outside the top quartile of the 120 countries sampled, trailing Paraguay, Rwanda, and the autonomous region of Nagorno-Karabakh.

So yes, Americans are way too apathetic about the loss of our freedoms and liberties, but at least the numbers are going in the right direction.

That shows that we are making progress.

And other recent surveys show this progress as well.

For example, according to a new report from the Pew Research Center, 74 percent of Americans do not believe that they have “to give up privacy in order to be safe from terrorism”.

That is a good sign.

And Americans are more dissatisfied with the federal government than ever before as well.

Gallup has found that a whopping 79 percent of Americans believe that there is widespread corruption throughout the government.

That is a new all-time high.

And Gallup has also discovered that confidence in Congress has fallen to a brand new all-time record low…

Americans’ confidence in Congress has sunk to a new low. Seven percent of Americans say they have “a great deal” or “quite a lot” of confidence in Congress as an American institution, down from the previous low of 10% in 2013. This confidence is starkly different from the 42% in 1973, the first year Gallup began asking the question.

In fact, Gallup found that confidence in all three branches of the federal government is declining.

So there are definitely signs that the American people are waking up.

But the numbers also show that there is still so much work to do.

The Bad News

The bad news is that most of the country still appears to be deeply asleep.  Our liberties and freedoms are eroding with each passing day, and most Americans simply do not care.

Most Americans don’t seem to care that the TSA is fondling thousands of women and children in airports all over the nation every single day.

Most Americans don’t seem to care that the NSA is recording billions of our phone calls and emails.

Most Americans don’t seem to care that our police are becoming increasingly militarized.  As I wrote about the other day, there were only about 3,000 SWAT raids in the United States back in 1980.  But today, there are more than 80,000 SWAT raids per year in this country.

Most Americans don’t seem to care that a baby was recently maimed for life when a police officer threw a grenade into his crib during a SWAT team raid.

Most Americans don’t seem to care that police recently tasered a man 18 times.  In fact, it barely made a blip on the national news.

Most Americans don’t seem to care that the Obama administration has discussed making gun owners wear RFID tracking bracelets.

Most Americans don’t seem to care that a new California law would allow police to confiscate guns based on accusation alone.

Most Americans don’t seem to care that our public schools have been transformed into “Big Brother” indoctrination centers.

Most Americans don’t seem to care that the U.S. border is considered to be a “Constitution-free zone” where officials can freely grab your computer and copy your hard drive.

Most Americans don’t seem to care that people are being sent to prison for collecting rain water on their own property.

Most Americans don’t seem to care that facial recognition technology is being installed all over the nation.

Most Americans don’t seem to care that the Obama administration has expressed a desire to establish a national DNA database.

Most Americans don’t seem to care that our cell phones are essentially high tech surveillance devices.

Most Americans don’t seem to care that if you type the wrong thing into a search engine that the police could come knocking on your door.

Most Americans don’t seem to care that local governments all over the country are now using automated license plate readers to scan our license plates.

Most Americans don’t seem to care that the federal government is grabbing hundreds of thousands of acres of private land all over the country.

Most Americans don’t seem to care that Bible-believing Christians are regularly identified as “religious extremists” in official government training materials.

Most Americans don’t seem to care that the federal government has identified dozens of different categories of Americans as “potential terrorists“.

Most Americans don’t seem to care that we have a president that is treating the Constitution like a piece of toilet paper.

I could go on for hours, but I think that you get the point.

We are becoming a little bit more like tyrannical regimes such as Nazi Germany and North Korea with each passing day.

We aren’t there yet, but that is the path that we are on.

And once our liberties and freedoms are gone, they will be exceedingly difficult to ever get back.

So please help us wake up more Americans while we still can.

Time is running out.

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

While Las Vegas faces an existential crisis (and appears to be ignoring it), California regulators are starting to clamp down on water waste. As WSJ reports, about 60 California cities and agencies have imposed mandatory water-use cutbacks, some as high as 50%. In many cases, the rules are enforced by charging higher fees for excess usage. In others, inspectors are deployed to crack down on scofflaws. Sacramento – the state’s capital – is among the worst offenders and most heavily ‘policed’ as a team of 40 inspectors have handed out2,444 notices year-to-date, with fines of up to $1,000 for repeat offenders. Neighbors are encouraged to whistleblow – there has been 7,604 water-use complaints; but not everyone is embracing the change as lawn repair is down 40% – “The propaganda dictates we haven’t much choice… It’s either do it or you die.”

 

 

As WSJ reports, the drought is starting to hit real people’s lives…

The pain of California’s three-year drought is spreading from its agricultural belt to urban lawns and backyards, where residents are being hit with fines for excess water use, and businesses such as golf courses and lawn care are seeing revenue dry up due to water restrictions.

 

About 60 California cities and agencies have imposed mandatory water-use cutbacks, some as high as 50%. In many cases, the rules are enforced by charging higher fees for excess usage. In others, inspectors are deployed to crack down on scofflaws.

 

Among the most aggressively monitored locales is the state capital, Sacramento, which issued 2,444 notices of violation in the first 5½ months of the year, with fines of up to $1,000 for repeat offenders.

 

This year, the city cut outdoor watering to two days a week from three. Because only about half its homes have water meters to measure use, Sacramento must rely on inspectors to help enforce the rules.

 

A team of 40 inspectors working for the city’s Department of Utilities investigate complaints. Sacramento, a city of 475,000, had received 7,604 water-use complaints as of June 18, said city spokeswoman Jessica Hess.

Sacramento said the goal is to change behavior, not raise revenue, but it’s not just California…

Residential water restrictions have been instituted in other drought-ravaged parts of the country, including Texas, Kansas and North Carolina. Irrigation-dependent industries there and in California have been hurt.

The people are not happy…

In Sacramento, Bob Odom said his family’s lawn-equipment repair business has dropped 40% this year from last year because of watering restrictions. “The propaganda dictates we haven’t much choice,” said Mr. Odom, 80. “It’s either do it or you die.”

 

…

 

Some residents are angry about the crackdown. “We spend hundreds of thousands for our homes and can’t even water the grass,” said Richard Massey, a 46-year-old disabled forklift operator, as he watched Mr. Geach cite a neighbor.

Finally, Gov. Jerry Brown has called for a 20% cut in overall water use since he declared a drought emergency in January. The State Water Resources Control Board is set to consider in July restrictions on such uses as operating outdoor fountains.

“Everyone is at risk over time from this drought,” said board chairwoman Felicia Marcus. “It really is all for one and one for all.”

And yet we go on as normal ignoring this ugly reality…

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

When it comes to strange market timing patterns, for the longest time we thought that it would be impossible to top the following chart by the New York Fed from July 2012, one we dubbed the “Chart of the Year“, showing that the cumulative “bullish” return of the S&P 500 on just the day preceding FOMC meetings resulted in some 800 points in upside in the broader market.

The NY Fed described this truly arcane phenomenon as follows:

We show that since 1994, more than 80 percent of the equity premium on U.S. stocks has been earned over the twenty-four hours preceding scheduled Federal Open Market Committee (FOMC) announcements (which occur only eight times a year)—a phenomenon we call the pre-FOMC announcement “drift.”

Surely, this is as bizarre as any “market timing” chart can get? Not so fast.

According to a paper by economists at UC Northwestern University and UC Berkeley, Anna Cieslak and Adair Morse and Annette Vissing-Jørgensen, another, even more surprising trading pattern using FOMC announcement has emerged. Specifically, anyone who engaged in the simple “even” strategy of buying the stocks of the S&P 500 on the day before a Fed policy announcement, selling them a week later, then buying them again the following week and sticking with the pattern until the subsequent Fed meeting generated a whopping 650% return since 1994, far outperforming the inverse “odd” strategy which shocking had a negative return over the past two decades years, and jsut as surprisingly, outperforming the market’s own 505% return during this period.

Behold what may be the most bizarre pattern chart yet:

As the WSJ adds, “the pattern of stocks performing better in even weeks of the Fed cycle—the week of the policy-setting meeting, two weeks after it, and so on—is persistent. Given financial markets’ complexity, though, it is possible to find many interesting, significant-seeming patterns that are really just matters of chance.”

The pattern appears robust, with clear peaks and valleys in returns during even and odd weeks that appear statistically significant. Splitting the data into three subperiods—1994 through 2000, 2001 through 2007 and 2008 onward—they found the pattern still held. International stock returns follow it as well.

So what is causing this miraculous “get rich quick and just trade alongside the Fed” pattern? The answer is not clear:

The dates for the eight policy-setting meetings the Fed sets each year come at different times of the month, and have moved around over time, so they haven’t regularly lined up with economic releases or corporate earnings reports (The next one, for example, comes at the end of this month.) Moreover, the economists found that volatility in the federal-funds futures market, where investors bet on the course of the Fed’s overnight target rate, follow the same pattern.

 

Neither reports from the Fed nor speeches and testimony from Fed officials follow the pattern. But since 2001, the Fed’s Board of Governors discount-rate meetings have tended to fall into the biweekly cycle.

 

So one scenario goes like this: Board members tend to gather on even weeks after the Fed’s rate-setting meeting to talk things over. The content of those discussions makes its way into financial markets, maybe through news reports, maybe through people in business, finance or academia that the Fed talks to, maybe through some combination of sources. As a result, investors have greater certainty on the direction of policy, and stocks rise.

There’s that. There is also the possibility of merely matching a particular pattern with an FOMC meeting variable, in other words, attempting to fit correlation as causation.

Still, as readers are aware, and as first Zero Hedge showed, and then even the US Treasury confirmed, buying stocks on large POMO days, or simply during the duration of POMO between 10:15 am and 11:00 am during the day, has also generated massive market outperformance.

So are these merely self-fulfilling prophecies, where people jump on the pattern thus validating it, involving either the FOMC meeting or the daily bond buybacks by the Fed, or is there something more sinister here? Perhaps the answer will only emerge after this “pattern” information is fully public knowledge and when everyone, not just a select group of traders, are privy to the pattern and trade around it.

Usually, it is those kinds of mass knowledge events that make such pattern trading null and void.

Or at least, they used to. After all, we are now in the New centrally-planned normal, when the Fed has made the market so simple by design an idiot caveman can generate a 30% each year: with every other “wealth creation” instrument failing, the S&P 500 is the only thing the Fed has left.

Which is why it wouldn’t surprise us if, counterintuitively, as everyone piled into the “Even” trade, its outsized return became even more pronounced. At least until such time, as the Fed, with its relentless, self-destructive and ultimately futile micromanagement of everything, finally loses control. Then patterns, charts and indeed markets, will be the last thing on anyone’s mind.

via Zero Hedge http://ift.tt/1xofH3H Tyler Durden

Via The World Complex blog,

Today we investigate the relationship between oil and the broad US market, using the S&P 500 index as a proxy.

A common thought is that the two functions are inversely correlated, with the US market in danger whenever oil rises too high.

The relationship has been a complex one over the past 11 years, but the correlation is positive most of the time.

In particular, we see from 2003 until late 2007, both oil and the market rose in tandem. The only time the two records show an inverse correlation was during the windup to the financial crisis–from late 2007 to July 2008.

The collapse in both market index and oil price through the second half of 2008 shows up quite clearly. The two prices rise in tandem from early 2009 to the end of 2012.

It doesn’t seem logical that the S&P should be positively correlated to oil prices–so it is more likely that both records are correlated to the same thing–inflation. But what to make of the last 18 months, in which we see an almost vertical rise in the stock market without an increase in the oil price? Is an American renaissance in the works, powered by increased American oil production? Or is it due to the much rumoured mass purchase of securities by financial institutions, powered by monetary creation?

Is it being done to prevent another period of negative correlation, which might foretell another economic crisis?

Stay tuned . . .

via Zero Hedge http://ift.tt/1o5Abrh Tyler Durden

The US and UK are the ‘best’ performing world economies based on PMIs. Despite slumping real incomes, surging gas prices, a dismal Q1, fading Q2 growth expectations, and the US being the worst relative performing macro-surprise index in the world this year, it is the cleanest clean shirt with the great expansion based on soft-survey data. France joins Korea at the bottom of the global pile of macro-economic performers with Russia, Brazil, Australia, and Greece also in contraction. Here is your 1-stop-shop guide to global macro – USA USA USA…

 

 

Source: JPMorgan

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

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

India’s gold policy over the last several years is about as dysfunctional as any government policy I have ever seen, and that’s saying a lot. In case you need a reminder, here are a few posts I have written on the subject:

The Times of India: “Almost Every Passenger on a Flight from Dubai to Calicut Was Found Carrying 1kg of Gold”

Gold Smuggling Increases 7x in India and Surpasses Illegal Drug Trade

Indian Temples Fight Back Against Government Gold Grabbing Plot

In a nutshell, Indians were buying too much gold for their government’s comfort, so the “authorities” stepped in with duties and import restrictions in an attempt to stifle the trade. So smuggling soared.

Fast forward to today. It appears the government has finally realized they can’t stop their citizens penchant for gold, so they have decided to dump central bank gold onto the market. What is incredible to me is that they are justifying this with a so-called “swap” into phantom gold at the Bank of England. The favored global hub of shady, rent-seeking, banker oligarchs.

What’s even more interesting about this is the fact that so many Central Banks seems to be swapping or selling their gold to Western interests. Most notably Ecuador selling to Goldman Sachs, which I highlighted in the piece: Ecuador to Transfer More Than Half its Gold Reserves to Goldman Sachs in Exchange for “Liquidity.”

Now from Reuters:

MUMBAI, July 2 (Reuters) – India’s central bank said on Wednesday it has sought quotes from banks to swap gold in its own vaults for international-standard gold, aiming to improve the management of its reserves.

 

The Reserve Bank of India said the operation would “standardise the gold available with RBI in India with respect to international standards” and the gold acquired would be delivered to its overseas custodian, the Bank of England.

 

By holding gold reserves in London, the RBI would gain flexibility to mobilise them if needed to defend the currency. It shipped some of its gold holdings to Britain in 1991 as part of a series of emergency measures to tackle a financial crisis.

This begs the question of who really needs the gold, the RBI, or London bankers?

According to the World Gold Council, India holds the 11th-largest gold reserves of 557 tons. At current market prices, they would be worth nearly $24 billion. It was not immediately clear how much of that would be swapped.

 

Market participants said the central bank was likely to offload its old gold onto the local market in India.

At least the people will get a hold of it as opposed to criminal Central Bankers.

That would have the beneficial effect of boosting domestic gold supply without hitting India’s current account – which faces renewed pressure as the conflict in Iraq has pushed up India’s oil import bill.

 

“It’s a good move by the RBI, this will at least ease the stock requirement of the jewellery industry,” said a senior official with a foreign bank that supplies gold to India.

You have to wonder if this in any way relates to concern about the upcoming Swiss referendum on the country’s gold reserves, which Parliament has been fighting hard to prevent from happening. For example, back in May Bloomberg reported that:

Swiss parliamentarians urged rejection of a popular initiative that would curtail the Swiss National Bank (SNBN)’s independence by requiring it to hold a fixed portion of its assets in gold.

 

Members of the Swiss parliament’s lower house voted 129 to 20 with 25 abstentions today against the plan, which demands that at least 20 percent of the central bank’s assets be in gold. It would also disallow the sale of any such holdings and require all SNB gold be held in Switzerland.

 

No date for a national vote has yet been set.

Well it appears based on a Bloomberg headline from this morning that a date has been set. A friend sent me the following:

• (BN) *SWISS TO VOTE NOV. 30 ON `GOLD INITIATIVE’

There may be some very concerned bankers in New York and London this weekend.

Full article here.

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

How to start World War 3? Step 1) Hack IDF Twitter account; Step 2) Tweet that Israel’s secret nuclear facility has suffered a potential leak after shelling; Step 3) wait for US response… It appears (though for now has not been confirmed) that the Israel Defense Force’s Twitter account was hacked by the Syrian Electronic Army who then tweeted “#WARNING: Possible nuclear leak in the region after 2 rockets hit Dimona nuclear facility” The Tweet was deleted soon after – not before all major newswires picked it up – and the report has been denied by the IDF. We can only imagine the market response to this tweet if US traders were not all out buying beers and burgers..

 

The original Tweet from @IDFSpokesperson

 

The Tweet was deleted minutes later after this image (of the Syrian Electronic Army) was tweeted…

 

and this…

 

But The IDF was quick to note it was not correct…

Israeli army is investigating how posting appeared on its official Twitter account saying there was risk of nuclear leak after rocket hit Dimona facility, military spokesman says on condition of anonymity in accordance with regulation.

 

Tweet was later deleted; army spokesman declines to comment on possibility the official account was hacked

*  *  *

And then The IDF issues this statement:

 

We apologize for the incorrect tweets Our twitter account was compromised. We will combat terror on all fronts including the cyber dimension

— IDF (@IDFSpokesperson) July 3, 2014

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

The civil war in east Ukraine – the self-proclaimed republic of Novorossiya – is back on and raging as violently as ever, with unconfirmed reports that even Russia has now gotten involved:

3 Russian military helicopters crossed Ukrainian air space in Luhansk at 8.20 am this morning. via @ukrpravda_news

— Ryskeldi Satke (@RyskeldiSatke) July 3, 2014

This follows what BBC reported was the death of at least nine civilians during an attack on a village in the Luhansk region of eastern Ukraine. “The rebels have accused the Ukrainian army of shelling and bombing the village of Luhanska. But Ukrainian officials said their forces were not in the area, blaming the rebels themselves.”

In other words more of the same, and certainly not helping any attempts at peace or even a ceasefire, as Russia and Ukraine are again stuck accusing each other of scuttling all attempts at ending hostilities. As Reuters noted, in a telephone conversation with U.S. Vice President Joe Biden, Poroshenko repeated a promise that Kiev could return to the ceasefire, on three conditions. “A statement on his website said he wanted assurances on a ‘bilateral’ truce, the release of hostages, and the deployment of international monitors to check Ukraine’s porous border with Russia. Moscow denies Ukraine’s charges that it is letting fighters and weapons cross into the east of the country.”

Curiously, besides Putin benefiting from higher oil prices as a result of geopolitical instability, and a far better venue to achieve that nowadays would be Iraq anyway, one wonders who actually has more to gain from perpetuating the fighting.

Yet the most surprising news of the day comes not from the contested region, but from Kiev where Ukraine’s president Poroshenko appointed a new Ukraine defense minister, Valeriy Heletey. His first promise? To not only re-engage Russia in Crimea, but to be victorious in doing so. From BBC:

New Ukrainian Defence Minister Valeriy Heletey has promised that the army would retake Crimea, restoring the country’s territorial integrity.

 

Addressing parliament in Kiev, he said: “There will be a victory parade… in Ukraine’s Sevastopol.”

 

Lt Gen Heletey, 46, was approved by MPs in Kiev after being recommended by Mr Poroshenko as someone who would work day and night to restore the military capability of the country’s armed forces. His remark about Sevastopol was applauded by the chamber.

We are confident Putin had a different, and far more amused reaction to the statement.

But while we applaud Ukraine’s attempts at generating populist enthusiasm, a far bigger problem for the nation will be if, as we explained previously, Russia not only manages to finally conclude the South Stream, which despite Europe’s attempts at sabotage, is proceeding according to schedule, but diverts all gas transit away from Ukraine. At that point, Ukraine will be completely irrelevant not only to Russia, which already has under its control, via separatist groups, the industrial regions in the east, but to Europe. It goes without saying that the second Russia makes Ukraine irrelevant as a core transit hub to Europe, all the promises from Europe, NATO, IMF and of course, America, will be gone with the wind. Only then will Ukraine discover just how credible its newly found allies are…

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

Meet XKeyscore – "a computer network exploitation system", as described in an NSA presentation, devoted to gathering "nearly everything a user does on the internet." The German site Das Erste has exposed the shocking truth about the rules used by the NSA to decide who is a "target" for surveillance. While the NSA claims to only "target" a small fraction of internet users, the perhaps unsurprising truth is very different. As Boing Boing concludes, one expert suggested that the NSA's intention here was to separate the sheep from the goats — to split the entire population of the Internet into "people who have the technical know-how to be private" and "people who don't" and then capture all the communications from the first group.

As Das Erste describes it,

The NSA program XKeyscore is a collection and analysis tool and "a computer network exploitation system", as described in an NSA presentation. It is one of the agency’s most ambitious programs devoted to gathering "nearly everything a user does on the internet." The source code contains several rules that enable agents using XKeyscore to surveil privacy-conscious internet users around the world. The rules published here are specifically directed at the infrastructure and the users of the Tor Network, the Tails operating system, and other privacy-related software.

And Cory Doctorow of Boing Boing summarizes,

In a shocking story on the German site Tagesschau (Google translate), Lena Kampf, Jacob Appelbaum and John Goetz report on the rules used by the NSA to decide who is a "target" for surveillance.

 

Since the start of the Snowden story in 2013, the NSA has stressed that while it may intercept nearly every Internet user's communications, it only "targets" a small fraction of those, whose traffic patterns reveal some basis for suspicion. Targets of NSA surveillance don't have their data flushed from the NSA's databases on a rolling 48-hour or 30-day basis, but are instead retained indefinitely.

The authors of the Tagesschau story have seen the "deep packet inspection" rules used to determine who is considered to be a legitimate target for deep surveillance, and the results are bizarre.

 

According to the story, the NSA targets anyone who searches for online articles about Tails — like this one that we published in April, or this article for teens that I wrote in May — or Tor (The Onion Router, which we've been posted about since 2004). Anyone who is determined to be using Tor is also targeted for long-term surveillance and retention.

 

Tor and Tails have been part of the mainstream discussion of online security, surveillance and privacy for years. It's nothing short of bizarre to place people under suspicion for searching for these terms.

More importantly, this shows that the NSA uses "targeted surveillance" in a way that beggars common sense. It's a dead certainty that people who heard the NSA's reassurances about "targeting" its surveillance on people who were doing something suspicious didn't understand that the NSA meant people who'd looked up technical details about systems that are routinely discussed on the front page of every newspaper in the world.

 

But it's not the first time the NSA has deployed specialized, highly counterintuitive wordsmithing to play games with the public, the law and its oversight. From James Clapper's insistence that he didn't lie to Congress about spying on Americans because he was only intercepting all their data, but not looking at it all; to the internal wordgames on evidence in the original Prism leak in which the NSA claimed to have "direct access" to servers from Google, Yahoo, Microsoft, Apple, etc, even though this "direct access" was a process by which the FBI would use secret warrants to request information from Internet giants without revealing that the data was destined for the NSA.

I have known that this story was coming for some time now, having learned about its broad contours under embargo from a trusted source. Since then, I've discussed it in confidence with some of the technical experts who have worked on the full set of Snowden docs, and they were as shocked as I was.

One expert suggested that the NSA's intention here was to separate the sheep from the goats — to split the entire population of the Internet into "people who have the technical know-how to be private" and "people who don't" and then capture all the communications from the first group.

Another expert said that s/he believed that this leak may come from a second source, not Edward Snowden, as s/he had not seen this in the original Snowden docs; and had seen other revelations that also appeared independent of the Snowden materials. If that's true, it's big news, as Snowden was the first person to ever leak docs from the NSA. The existence of a potential second source means that Snowden may have inspired some of his former colleagues to take a long, hard look at the agency's cavalier attitude to the law and decency.

*  *  *

And just this week it was all found perfectly legal… But it appears the US continues to make friends wherever it goes…

The German attorney Thomas Stadler, who specializes in IT law, commented: "The fact that a German citizen is specifically traced by the NSA, in my opinion, justifies the reasonable suspicion of the NSA carrying out secret service activities in Germany.

 

For this reason, the German Federal Public Prosecutor should look into this matter and initiate preliminary proceedings."

So now you know – you are all being watched…

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

2014 has not been kind to Barclays: first, the UK bank proved countless goldbugs right when it was first caught rigging the gold market (the first documented case, not the last) and a few short weeks later, the New York Attorney General crucified the bank for misleading its Dark Pool clients, and letting their order flow be, quite lucratively, front run by “aggressive” predatory algos – something it explicitly had stated it won’t allow. So with one after another revenue stream crashing before its eyes, what is the Chairman of the scrambling bank to do? Why beg to at least keep the FX manipulation going.

What follows is not from The Onion. It is from FT:

The foreign exchange market needs “fine tuning” rather than heavy handed reform, the chairman of Barclays argued on Thursday, as he unveiled a new compliance academy aimed at raising standards within the bank.

 

Sir David Walker said that while the forex market was “vulnerable to taint” it had worked well for a very long time and that the focus now should be on ensuring better conduct by traders.

Translation: it may be rigged, but it’s rigged in a way that makes the riggers money. As for everyone else, if only the regulators had kept their mouth shut, nobody would have been the wiser and we could just blame those fringe blogs accusing banks of manipulating various assets of being “conspriacy theorists.” Which reminds us: we need to send some more Christmas stocking “stuffers” to the FSA…

“There is some very intelligent, sensitive fine-tuning needed, but we should be wary of throwing the baby out with the bathwater,” he said.

Translation: let’s pretend to “fix” the rigging, slap the banks with a few thousand pound fine, and we can all go back to normal. After all, with all our HFT frontrunning revenue and kickbacks about to go down the drain, we need to make money somehow! Because if we go down… well, as Hank Paulson explained so clearly, the entire nation will follow.

Sir David said he wanted it to become a “world centre in excellence”, acting as a benchmark for compliance and leading to the creation of a new certificate in compliance.  Training of Barclays’ 2,100 compliance officers would take them beyond the job of policing fellow employees and encourage them to “mentor” colleagues on their behaviour. Barclays spends £300m a year on its compliance function.

Translation: now that all our market manipulation has been revealed for the whole world to see, it probably is a good idea to at least give lip service to complying with the laws and regulations. So we will just hire a few thousands chimps, dress them in business suits, and give them a banana: that way they can pass for “compliance” officers.

Sir David said it was “wholly appropriate” that regulators now look at the forex market and that some oversight may be needed, but that it was important not to “spoil” a market that worked effectively for most clients. George Osborne, the UK Chancellor, last month announced powers to regulate Libor would be extended to other benchmarks including forex.

Translation: those clients who were part of the rigging were very happy, and they also made tons of money, just like us, by taking advantage of everyone else who thought it was a fair, efficient and regulated market. If you continue pursuing this line of inquiry we will have to spill the beans about them too, and you don’t want to see the names we will be forced to reveal. Who knows, it may go all the way up to Threadneedle Streeet.

And the conclusion:

[Sir David] acknowledged that the “animus” against banks was not going to go away soon, arguing that the current environment meant that banks were being treated as guilty until they proved themselves innocent. “I’m sorry to say that there will be accidents from time to time,” Sir David said at an event to announce the compliance academy. “They are not evidence of the failure of what we are rolling out. They are indicative that it takes time. We always have been very clear some of this stuff will take 5-10 years.”

Translation: Sir David, whose bank was just busted in the two biggest market manipulation scandals since the Libor scandal, where, oh snap, Barclays was one of the most guilty parties too, is confused why banks are treated as “guilty until proven innocent.” And yes: when you are manipulating every single market you participate in, well, you will get caught now and then and yes “accidents will happen.“

But so much for that: let’s all just sit back, take a third mortgage on the house, use the proceeds to buy GoPro, and look forward to Monday and the regularly scheduled upward melting market diversion produced and directed to make everyone forget just how rigged everything truly is.

via Zero Hedge http://ift.tt/1vCs0GX Tyler Durden