Thursday, June 20, 2013

The Terror Con

Go To Original

For defense contractors, the government officials who write them mega checks, and the hawks in the media who cheer them on, the name of the game is threat inflation. And no one has been better at it than the folks at Booz Allen Hamilton, the inventors of the new boondoggle called cyberwarfare.

That’s the company, under contract with the National Security Agency, that employed whistle-blower Edward Snowden, the information security engineer whose revelation of Booz Allen’s enormously profitable and pervasive spying on Americans now threatens the firm’s profitability and that of its parent hedge fund, the Carlyle Group.

Booz Allen, whose top personnel served in key positions at the NSA and vice versa after the inconvenient collapse of the Cold War, has been attempting to substitute terrorist for communist as the enemy of choice. A difficult switch indeed for the military-industrial complex about which Dwight Eisenhower, the general-turned-president, had so eloquently warned us.

But just when the good times for war profiteers seemed to be forever in the past, there came 9/11 and the terrorist enemy, the gift that keeps on giving, for acts of terror always will occur in a less than perfect world, serving as an ideal excuse for squandering resources, as well as our freedoms.

Just ask New York Times columnists Thomas Friedman and Bill Keller. Rising to the defense of NSA snooping on a scale never before imagined in human history, they warn us that if there was a second 9/11-type attack, we would lose all of our civil liberties, so we should be grateful for this trade-off.

“I believe that if there is one more 9/11—or worse, an attack involving nuclear material—it could lead to the end of the open society as we know it,” Friedman wrote in his June 11 column.

No nation in history has ever possessed such an imbalance of military superiority and the ability to ward off foreign threats without sacrificing its core values. Never has this country been as vulnerable to foreign attacks as when the founders approved our Constitution with its Fourth Amendment and other protections of individual sovereignty against an intrusive government. They did so out of the conviction that individual freedom makes us stronger rather than weaker as a nation. In short, they trusted in the essential wisdom of the people as opposed to the pundits who deride it.

Defending Friedman’s column, Keller wrote Sunday:

“Tom’s important point was that the gravest threat to our civil liberties is not the NSA but another 9/11-scale catastrophe that could leave a panicky public willing to ratchet up the security state, even beyond the war-on-terror excesses that followed the last big attack.”

So it’s the panicky public’s fault and not the ill-informed work of establishment journalists like Friedman, who led the charge to war with Iraq based on phony claims about terrorism.

Once again, Friedman has a misplaced faith in the work of the intelligence community. The NSA snooping was quite extensive before 9/11 and certainly in full force prior to the Boston Marathon attack, but did not prevent either event. Indeed, our much-vaunted spy agencies still have not come up with an explanation of how 19 hijackers, 15 from our ally Saudi Arabia, managed to legally enter this country and learn flying skills while under our government’s watch.

Nor have those intelligence agencies explained why the only three countries that recognized the Taliban government sponsors of al-Qaida were that same Saudi Arabia as well as our other friends in Pakistan and the United Arab Emirates. For information on the UAE connection, the NSA might check with its buddies at Booz Allen Hamilton.

As The New York Times reported Saturday: “When the United Arab Emirates wanted to create its own version of the National Security Agency, it turned to Booz Allen Hamilton to replicate the world’s largest and most powerful spy agency in the sands of Abu Dhabi. It was a natural choice: The chief architect of Booz Allen’s cyber strategy is Mike McConnell, who once led the NSA and pushed the United States into a new era of big data espionage. It was Mr. McConnell who won the blessing of the American intelligence agencies to bolster the Persian Gulf sheikdom, which helps track the Iranians.”

Tracking the Iranians, you say? But they’re not the enemies who attacked us on 9/11, and indeed they are Shiites, who were implacably hostile to the Sunni fanatics of al-Qaida. The reasoning makes sense only if you follow the money that the UAE can pay. “They are teaching everything,” one Arab official told The New York Times about Booz Allen’s staffers. “Data mining, web surveillance, all sorts of digital intelligence collection.”

How great. Now, it’s not just the government we elect but also those everywhere, even in desert emirates, that can mine our data.

“The NSA data mining,” Keller assures us, “is part of something much larger. On many fronts, we are adjusting to life in a surveillance state, relinquishing bits of privacy in exchange for the promise of other rewards.”

Behold McConnell. While director of national intelligence from 2007-09, he did much to inflate the threat of cyberterrorism; he then returned to the private sector and was rewarded with $4.1 million his first year back at Booz Allen, solving the problem he had hyped while heading the NSA. There’s a guy who knows how to play the game.

6 Unbelievable Ways the Big Banks Are Scamming You

Go To Original

The Financial Markets Freak Out When The Fed Hints That It May Slow Down The Injections

Go To Original

U.S. financial markets are exhibiting the classic behavior patterns of an addict.  Just a hint that the Fed may start slowing down the flow of the "juice" was all that it took to cause the financial markets to throw an epic temper tantrum on Wednesday.  In fact, one CNN article stated that the markets "freaked out" when Federal Reserve Chairman Ben Bernanke suggested that the Fed would eventually start tapering the bond buying program if the economy improves.  And please note that Bernanke did not announce that the money printing would actually slow down any time soon.  He just said that it may be "appropriate to moderate the pace of purchases later this year" if the economy is looking good.  For now, the Fed is going to continue wildly printing money and injecting it into the financial markets.  So nothing has actually changed yet.  But just the suggestion that this round of quantitative easing would eventually end if the economy improves was enough to severely rattle Wall Street on Wednesday.  U.S. financial markets have become completely and totally addicted to easy money, and nobody is quite sure what is going to happen when the Fed takes the "smack" away.  When that day comes, will the largest bond bubble in the history of the world burst?  Will interest rates rise dramatically?  Will it throw the U.S. economy into another deep recession?

Judging by what happened on Wednesday, the end of Fed bond buying is not going to go well.  Just check out the carnage that we witnessed...

-The Dow dropped by 206 points on Wednesday.

-The yield on 10 year U.S. Treasuries shot up substantially, and it is now the highest that it has been since March 2012.

-On Wednesday we witnessed the largest percentage rise in the yield on 5 year U.S. Treasury bonds ever.  It is now the highest that it has beenin nearly two years.

-It was announced that mortgage rates are the highest that they have been in more than a year.

-We also learned that the MBS mortgage refinance applications index has fallen by 38 percent over the past six weeks.

If the markets react like this when the Fed doesn't even do anything, what are they going to do when the Fed actually starts cutting back the monetary injections?

Posted below is an excerpt from the statement that the Fed released on Wednesday.  Please note that the Fed is saying that the current quantitative easing program is going to continue at the same pace for right now...

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

So why doesn't the Federal Reserve just stop these emergency measures right now?

After all, we are supposed to be in the midst of an "economic recovery", right?

What is Bernanke afraid of?

That is a question that Rick Santelli of CNBC asked on Wednesday.  If you have not seen his epic rant yet, you should definitely check it out...



On days like this, it is easy to see who has the most influence over the U.S. economy.  The financial world literally hangs on every word that comes out of the mouth of Federal Reserve Chairman Ben Bernanke.  The same cannot be said about Barack Obama or anyone else.

The central planners over at the Federal Reserve are at the very heart of what is wrong with our economy and our financial system.  If you doubt this, please see this article: "11 Reasons Why The Federal Reserve Should Be Abolished".  Bernanke knows that the actions that the Fed has taken in recent years have grossly distorted our financial system, and he is concerned about what is going to happen when the Fed starts removing those emergency measures.

Unfortunately, we can't send the U.S. financial system off to rehab at a clinic somewhere.  The entire world is going to watch as our financial markets go through withdrawal.

The Fed has purposely inflated a massive financial bubble, and now it is trying to figure out what to do about it.  Can the Fed fix this mess without it totally blowing up?

Unfortunately, most severe addictions never end well.  In a recent article, Charles Hugh Smith described the predicament that the Fed is currently facing quite eloquently...

One of the enduring analogies of the Federal Reserve's quantitative easing (QE) program is that the stock market is now addicted to this constant injection of free money. The aptness of this analogy has never been more apparent than now, as the market plummets on the mere rumor that the Fed will cut back its monthly injection of financial smack. (The analogy typically refers to crack cocaine, due to the state of delusional euphoria QE induces in the stock market. But the zombified state of the heroin addict is arguably the more accurate analogy of the U.S. stock market.)

You know the key self-delusion of all addiction: "I can stop any time I want." This eerily echoes the language of Fed Chairman Ben Bernanke, who routinely declares he can stop QE any time he chooses.

But Ben, the pusher of QE money, knows his addict--the stock market--will die if the smack is cut back too abruptly. Like all pushers, Ben has his own delusion: that he can actually control the addiction he has nurtured.

You're dreaming, Ben--your pushing QE has backed you into a corner. The addict (the stock market) is now so dependent and fragile that the slightest decrease in QE smack will send it to the emergency room, and quite possibly the morgue.

We are rapidly approaching a turning point.  We have a massively inflated stock market bubble, a massively inflated bond bubble, and a financial system that is absolutely addicted to easy money.

The Fed is desperately hoping that it can find a way to engineer some sort of a soft landing.

The Fed is desperately hoping to avoid a repeat of the financial crisis of 2008.

Federal Reserve Chairman Ben Bernanke insists that he knows how to handle things this time.

Do you believe him?

America Doesn't Have #1 Richest Middle-Class in the World...We're Ranked 27th!

Go To Original

21 Facts About NSA Snooping That Every American Should Know

Go To Original
There seems to be a lot of confusion about what the NSA is actually doing.  Are they reading our emails?  Are they listening to our telephone calls?  Do they target American citizens or is it only foreigners that they are targeting?  Unfortunately, the truth is that we aren’t going to get straight answers from our leaders about this.  The folks running the NSA have already shown that they are willing to flat out lie to Congress, and Barack Obama doesn’t exactly have the greatest track record when it comes to telling the truth.  These are men that play word games and tell lies for a living.  So it would be unrealistic to expect them to come out and tell us the unvarnished truth about what is going on.  That is why it is so important that whistleblowers such as Edward Snowden have come forward.  Thanks to them and to the brave journalists that are willing to look into these things, we have been able to get some glimpses behind the curtain.  And what we have learned is not very pretty.  The following are 21 facts about NSA snooping that every American should know…
#1 According to CNET, the NSA told Congress during a recent classified briefing that it does not need court authorization to listen to domestic phone calls…
Rep. Jerrold Nadler, a New York Democrat, disclosed on Thursday that during a secret briefing to members of Congress, he was told that the contents of a phone call could be accessed “simply based on an analyst deciding that.”
If the NSA wants “to listen to the phone,” an analyst’s decision is sufficient, without any other legal authorization required, Nadler said he learned. “I was rather startled,” said Nadler, an attorney and congressman who serves on the House Judiciary committee.
#2 According to U.S. Representative Loretta Sanchez, members of Congress learned “significantly more than what is out in the media today” about NSA snooping during that classified briefing.
#3 The content of all of our phone calls is being recorded and stored.  The following is a from a transcript of an exchange between Erin Burnett of CNN and former FBI counterterrorism agent Tim Clemente which took place just last month…
BURNETT: Tim, is there any way, obviously, there is a voice mail they can try to get the phone companies to give that up at this point. It’s not a voice mail. It’s just a conversation. There’s no way they actually can find out what happened, right, unless she tells them?
CLEMENTE: No, there is a way. We certainly have ways in national security investigations to find out exactly what was said in that conversation. It’s not necessarily something that the FBI is going to want to present in court, but it may help lead the investigation and/or lead to questioning of her. We certainly can find that out.
BURNETT: So they can actually get that? People are saying, look, that is incredible.
CLEMENTE: No, welcome to America. All of that stuff is being captured as we speak whether we know it or like it or not.
#4 The chief technology officer at the CIA, Gus Hunt, made the following statement back in March
“We fundamentally try to collect everything and hang onto it forever.”
#5 During a Senate Judiciary Oversight Committee hearing in March 2011, FBI Director Robert Mueller admitted that the intelligence community has the ability to access emails “as they come in”…
“We put in place technological improvements relating to the capabilities of a database to pull together past emails and future ones as they come in so that it does not require an individualized search.”
#6 Back in 2007, Director of National Intelligence Michael McConnell told Congress that the president has the “constitutional authority” to authorize domestic spying without warrants no matter when the law says.
#7 The Director Of National Intelligence James Clapper recently told Congress that the NSA was not collecting any information about American citizens.  When the media confronted him about his lie, he explained that he “responded in what I thought was the most truthful, or least untruthful manner“.
#8 The Washington Post is reporting that the NSA has four primary data collection systems…
Two of the four collection programs, one each for telephony and the Internet, process trillions of “metadata” records for storage and analysis in systems called MAINWAY and MARINA, respectively. Metadata includes highly revealing information about the times, places, devices and participants in electronic communication, but not its contents. The bulk collection of telephone call records from Verizon Business Services, disclosed this month by the British newspaper the Guardian, is one source of raw intelligence for MAINWAY.
The other two types of collection, which operate on a much smaller scale, are aimed at content. One of them intercepts telephone calls and routes the spoken words to a system called ­NUCLEON.
For Internet content, the most important source collection is the PRISM project reported on June 6 by The Washington Post and the Guardian. It draws from data held by Google, Yahoo, Microsoft and other Silicon Valley giants, collectively the richest depositories of personal information in history.
#9 The NSA knows pretty much everything that you are doing on the Internet.  The following is a short excerpt from a recent Yahoo article
Americans who disapprove of the government reading their emails have more to worry about from a different and largerNSA effort that snatches data as it passes through the fiber optic cables that make up the Internet’s backbone. That program, which has been known for years, copies Internet traffic as it enters and leaves the United States, then routes it to the NSA for analysis.
#10 The NSA is supposed to be prohibited from spying on the Internet activity of American citizens, but it is doing it anyway
Despite that prohibition, shortly after the Sept. 11 terrorist attacks, President George W. Bush secretly authorized the NSA to plug into the fiber optic cables that enter and leave the United States, knowing it would give the government unprecedented, warrantless access to Americans’ private conversations.
Tapping into those cables allows the NSA access to monitor emails, telephone calls, video chats, websites, bank transactions and more. It takes powerful computers to decrypt, store and analyze all this information, but the information is all there, zipping by at the speed of light.
“You have to assume everything is being collected,” said Bruce Schneier, who has been studying and writing about cryptography and computer security for two decades.
#11 It has been estimated that the NSA gathers 2.1 million gigabytes of dataon all of us every single hour of every single day.
#12 In addition to collecting data on their own, a recent Bloomberg articleclaims that “thousands of firms” are giving your personal information directly to the NSA.
#13 Companies that share their data with the NSA are exempt from prosecution due to a law that Congress passed back in 2008
AT&T and other telecommunications companies that allow the NSA to tap into their fiber links receive absolute immunity from civil liability or criminal prosecution, thanks to a law that Congress enacted in 2008 and renewed in 2012. It’s a series of amendments to the Foreign Intelligence Surveillance Act, also known as the FISA Amendments Act.
#14 The NSA is constructing the largest data center in the world out in Utah.  It is going to have about a million square feet of storage space, it is going to cost about 2 billion dollars to build, and it is going to take about 40 million dollars a year just to pay for the energy needed to run the facility.  It is also being reported that it will have the capability of storing 5 zettabytes of data.
#15 The NSA has a budget of about 10 billion dollars a year.
#16 Overall, the United States government spends more than 80 billion dollars a year on intelligence programs.
#17 According to NSA whistleblower William Binney, the NSA has a “target list” of somewhere between “500,000 to a million people“.
#18 Binney also claims that the NSA “has the capability to do individualized searches, similar to Google, for particular electronic communications in real time through such criteria as target addresses, locations, countries and phone numbers, as well as watch-listed names, keywords, and phrases in email.”
#19 According to a recent Rasmussen survey, 57 percent of all Americans believe that the government will use the information that it collects “to harass political opponents”.
#20 Benjamin Franklin once wrote the following
“They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.”
#21 This is what the Fourth Amendment to the U.S. Constitution says…
“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”