Links 7/12/13

Monkey swims lengths at Mumbai public pool – video Guardian

A Billion Angry Brains: An Investigation of Online Hostility and A Billion Angry Brains: The Four Types of Online Hostility Psychology Today (AbyNormal)

VA Proves Fear of Malpractice Suits Isn’t Responsible for Overtesting Patient Safety Blog

Mandela’s Tarnished Legacy CounterPunch (Carol B)

Global Insight: Code of silence seeks to avert bailout revolt in German poll Financial Times

‘Debt peril’ awaits 1.25m UK households if rates rise Financial Times

Egypt faces moment of reckoning on its economy as protests wane Financial Times

Al Jazeera staff resign after ‘biased’ Egypt coverage GulfNews (furzy mouse)

US warning to Egypt over arrests BBC

Fire Sales cocktailhag, Firedoglake (Carol B)

Big Brother is Watching You Watch:

What the government pays to snoop on you Associated Press

Revealed: how Microsoft handed the NSA access to encrypted messages Guardian

Edward Snowden case: US rebukes China BBC. The US has the nerve to talk about “trust”. I hope they get a dressing-down from China.

Senators introduce bill to reform security clearance process. When will they go after the contracts? Daily Kos (Carol B)

NSA’s Snowden review focuses on possible access to China espionage files, officials say Washington Post

President Obama Personally Violating Our Treaty Obligations Marcy Wheeler. Wow, even DiFi has cleared her throat and pretty much told Obama he needs to stop forcefeeding in Gitmo.

Clinton cashes in on her star power with $200,000 speeches nationwide Washington Post. Ugh.

Teen’s Joke ‘Threat’ Lands Him In Solitary; While Cop Saying He Wants To ‘Kill’ The First Lady Walks Free TechDirt (subgenius)

Gold markets have jumped the gun of Bernanke climb-down Ambrose Evans-Pritchard, Telegraph. On the same page as we are re the meaning of Bernanke’s latest remarks.


Labor unions keep strong hold on PA politics Philly (Paul Tioxon)

Wages Have Fallen Fastest In The Lowest Paid Jobs ThinkProgress (Carol B)

Consumer Credit Year Over Year Warren Mosler

16 Senators Seek Inquiry of A.T.M.-Style Pay Cards New York Times

Short-time work: Does it save jobs? VoxEU

iShares’ Claims Make Me Nervous Paul Amery, IndexUniverse

Warren Joins McCain to Push New Glass-Steagall Law for Banks Bloomberg

Grumbles Follow Plan to Raise Bank Capital Floyd Norris, New York Times

Shadow Inventory Real Estate: Banks Sitting on Abandon Properties YouTube (furzy mouse). The important bit is to see the what the houses look like.

Mother Of All Bubbles Pops, Mess Ensues Wolf Richter. Recaps how REITs have been engaging in levered bond speculation (from a BBerg story).

Why Mobile Payments Will Never Take Off Felix Salmon v. Don’t Throw In the Towel on Mobile Yet Adam Levitin

Antidote du jour:


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  1. hooked

    Feinstein has no inkling of the can of worms she opens when she cites the CAT. The 8th amendment does not begin to meet CAT standards, and legally void US government reservations try to evade any CAT obligations. In the outside world the CAT’s absolute prohibition on torture is interpreted not by party hacks wearing judge costumes in the CIA-run DC circuit, but by decisions of independent courts utterly alien to the servile US judiciary, and by General Comments of the Treaty Body,

    Sooner or later, Kerry will have to stop running from required CAT reports. Then the USG will no longer be able to hide from the Committee Against Torture. The gulf between US government torture practices and the norms of the civilized world will disgrace every corner of this ruling junta. Exposure will put a price on the head of every CIA dick-slicer and JSOC kiddy-rapist, along with their command structure.

    1. Bill the Psychologist

      Hear hear, totally agree. Great succinct comment…CIA are criminal scum occupying white collar jobs.

  2. Ned Ludd

    The meeting with Snowden and representatives from Human Rights Watch, Amnesty International, and Transparency International is going on now. Ellen Barry, Moscow correspondent for The New York Times, is posting updates.

    Ellen Barry of the New York Times reports that Tanya Lokshina of Human Rights Watch, who is in the meeting, says Snowden has said he has received offers from Venezuela, Russia, Bolivia, Nicaragua, Ecuador. He thanks them. He says he accepts all offers, present and future. The offer from Venezuela has been made formally. He wants help in guaranteeing his safe passage to Latin America, she says. He will submit an asylum claim to Russia today, but he plans to go to Latin America eventually, she says.

    1. Ned Ludd

      According to RT, “Thirteen Russian and international human rights advocates and lawyers have gathered at Moscow Sheremetyevo Airport for a meeting with Snowden.” USA Today reports that the meeting included:

      • Vyacheslav Nikonov, chairman of the Russian state Duma
      • Sergei Nikitin, head of Amnesty International Russia
      • Tatyana Lokshina, of Human Rights Watch
      • Vladimir Lukin, Russia’s presidential human rights ombudsman
      • Genri Reznik, who the AP identifies as “a prominent lawyer and head of the Moscow bar association”

    2. Klassy!

      Maybe the US could refrain from pressuring these countries. Doesn’t the White House have some sort of anti bullying initiative? What a teachable moment!

      1. MyLessThanPrimeBeef

        I have only one message to the Chinese: Don’t ever try to broadcast a photo of Snowden swinging a bucket trying to stop a tank driven by his Commander-in-Chief in front of the White House.

        That’s a dirty trick. We Americans do not like that at all!

  3. Tyler Healey

    Yves, why the disappointment with Clinton cashing in on her star power with $200,000 speeches nationwide?

    We don’t know what she’s doing with the money. Maybe she’s giving some of it to the Red Cross. Maybe she’s saving it for her presidential run.

        1. Inverness

          Not to mention, certainly her own little family benefits from those speaking fees. I am glad that Chelsea can afford to purchase a nice penthouse in Grammercy Park. I would not want her to be too far from her NYU gig. How did she get that job?

          Seriously, a friend of mine attends some private college in New Jersey, where Tony Blair preached about how people in the Middle East need to open themselves up to western values, for all of twenty minutes.

          1. Massinissa

            Open themselves up to western values = Open themselves up to neoliberal capitalist exploitation. And probably Anglo-American Imperialism too.

            Yeah, thanks but no thanks, Tony Blair.

          2. sleepy

            How’d Blair get a work permit?

            I would’ve done that talk for $200.00 plus busfare. He took a job away from a citizen.

            1. Inverness

              Ha! Those nifty trade agreements like NAFTA don’t benefit those who’d work for $200.00 plus bus fare. But damn it, I’d go to that talk.

            2. Synopticist

              Blair is a disgrace, and I say that as a former Blairite.
              He could have been the British Bill Clinton, a popular guy who his party can wheel out at election time to rally the troops and remind everyone who’s forgotten the murky details what a great guy he was.
              Instead, he’s the Brit GW, a total embarassment, toxic, and a person to apologise for.

              The biggest reason is that he decided to GET OBSCENELY RICH, and screw the consequences. He’s done his country and party a massive dis-service.

  4. MyLessThanPrimeBeef

    Only 4 types of online hostility?

    What happened to ‘each hostility is unique?’

    That kind of categorization just makes me angry.

    1. Lambert Strether

      You talkin’ to me? You talkin’ to me? You talkin’ to me? Then who the hell else are you talking… you talking to me? Well I’m the only one here. Who the fuck do you think you’re talking to? Oh yeah? OK.

    2. ambrit

      Dear MLTPB;
      Yep, indeedy. And try that on Twitter. How mant kinds of anger can you express in only 144 characters?

  5. Ned Ludd

    Microsoft’s new game console is always on and always listening. There are some funny quips, over at Hacker News, about Microsoft’s pledge that “We are designing the new Kinect with simple, easy methods to customize privacy settings, provide clear notifications and meaningful privacy choices”.

    Do you want your information to be given to the NSA?
    ☐ Yes
    ☒ Yes

    Do you agree that your information will given to the NSA?
    ☐ Yes, I agree
    ☒ No, I don’t mind.

    Answer “Yes” to send information to the NSA or “No” if you have something to hide.

    The Consumerist, a subsidiary of Consumer Reports, relays this example about how the Xbox One could use Kinect, its motion sensing input device, to spy on people for advertising purposes, at the very least.

    Kinect could detect how many users are in the room and could serve advertisements aimed at families, groups, or individuals. Additional information from your Xbox LIVE account could also influence these by using metrics such as your gender, age, location, media habits and more, and Microsoft are very aware of the potential around this.

    1. Klassy!

      The new Xbox is seriously creepy. You would think that Sony might see an opening here. The kinect has to be on at all times.
      No putting it back in the box when you’re done with your just dance session

  6. MyLessThanPrimeBeef

    Yesterday in LA Times: Geothermal plants trigger small quakes near St. Andreas fault.

    Is that good or bad?

    Sometimes, small quakes are thought to prevent bigger ones. It’s similar to the advice that one shouldn’t bottle up one’s anger.

    Or maybe they don’t do that.

  7. MyLessThanPrimeBeef

    Today’s LA Times: Six year…or longer…auto loans gaining traction.

    Why not? Cars are lasting longer, I think, though fashion comes and goes at the same or even more furious pace.

    What about life insurance? If you are expected to die later than when you first bought your life insurance and they can keep your money a little longer, shouldn’t that lower your premium?

    1. curlydan

      I just bought a new car this week, and the rates are ridiculously low. Financing seemed like a good deal for me, but I can see how someone could easily get upside down on one of these loans, though.

  8. Benedict@Large

    An absolutely devastating critique of the state of the ObamaCare individual mandate by Megan McArdle:

    Obamacare Gets Easier to Implement All the Time . . .
    As Long as You Don’t Care About Losing Major Functions

    Yeah, I know, I have problems with Megan’s work too, but this is very good, and easily the best I’ve seen from her. The systems support for the mandate is essentially a shell that doesn’t do anything. All the hooks into critical data bases have been torn out, and all the thing seems to do is sell policies (which was the singular goal of ObamaCare from the start). As it stands, it looks like people will be able to just tell the thing they are poor, and that will get them the subsidy, regardless of whether they are or not.

    I knew the implementation of this wasn’t smelling right, and that it was in trouble, but if Megan’s account is even close (and my experience with these sorts of things says it is), the Obama folks didn’t even try to do what the law promised, and they are seriously lying about how much trouble this thing is in.

    1. Jim Haygood

      If the modus operandi of unemployment insurance is any guide, they will happily let people sign up for benefits they’re not entitled to.

      Then, after they’ve crossed the threshold for felony benefit theft, bust them and fast-track them to the Gulag.

      Win-win for both Big Pharma and the Prison Industrial Complex. Who’s your daddy?

  9. AndyLynn

    given Skype’s reported architecture, if the Guardian article on Skype is correct, the implications are profound.


    1) Microsoft/Skype are performing man-in-the-middle intercept attacks against their own customer base, or

    2) the long rumored AES encryption “backdoor” *does* exist.

    either/both are possible, or am i simply too un-clever to think of a 3rd?

    (actually, just thought of one: side-channel leak of the data *before* encryption.)

    can you spell twofish/serpent?…

    p.s. DuckDuckGo has reported a huge increase in traffic. wonder why?

    1. Ned Ludd

      In a 2007 post, Bruce Schneier writes, “Random numbers are critical for cryptography”.

      Break the random-number generator, and most of the time you break the entire security system. Which is why you should worry about a new random-number standard that includes an algorithm that is slow, badly designed and just might contain a backdoor for the National Security Agency.

      It appears that the NSA created a way to take a legitimate encryption algorithm and to intentionally add a backdoor by switching the random-number generator. Dan Shumow and Niels Ferguson showed that if someone willingly uses the NSA’s random-number generator (called “Dual_EC_DRBG”), there is a “secret set of numbers that can act as a kind of skeleton key”.

      Dual_EC_DRBG became an official standard in 2007, the same year that PRISM began.

      1. subgenius

        for the purpose of clarity, there is NO way to code a RANDOM number generator on a von Neumann architecture.

        what you CAN get is PSEUDO-RANDOM number generation. Which is NOT the same thing, but frequently can masquerade as such…

      1. AndyLynn

        regrets – but as a lay person, i know i don’t know (a la D. Rumsfeld). the above cited article is IMHO *excellent* and may help you suss out such.

        my question: given this hub-bub, have private sector proprietary crypto implementations (like Silent Circle’s) just become a munition, again?

      2. Mark P.

        Lambert wrote: “Can you expand on this a bit? Not so much the tech, but the players?”

        These specific explanations by B. Schneier linked to below should cast the necessary light. (To the extent that’s possible to do with accuracy when you’re dealing with a subject that is so abstrusely bleeding-edge and occluded.)

        1. RanDomino

          “The U.S. government released a new official standard for random-number generators this year, and it will likely be followed by software and hardware developers around the world.”

          Why?? Why would anyone follow a RNG standard that the US government likes?!

    2. hunkerdown

      I seem to remember reading on @mattblaze’s Twitter a report that video quality was poor in the first trials (consistent with missing and/or dropped packets, not very consistent with MITM) but soon improved greatly.

      That suggests #3, key leakage a la the Clipper crypto chip’s Law Enforcement Access Field plus packet capture.

      I’ve heard suggestions of a variation on 1, that MSFT/Skype redirects “interesting” users to an NSA-monitored supernode, but that doesn’t seem consistent with the appraisals of video vs. audio quality (if the clients send everything through the network’s normal MITM servers, there shouldn’t be any change in the protocol when sending special people to special servers.)

      Of course, if Skype clients actually *do* direct-connect with each other for video chat rather than sending it to a central reflector, my conclusions are invalid…

  10. Hugh

    The original Glass-Steagall didn’t apply just to commercial banks but other kinds of enterprises like insurance companies (AIG, anyone?) I don’t see any possibility of a Congress as corrupt as this one restoring Glass-Steagall, but if this were to happen, I wonder if the banks would have to take back all the derivative exposure they have dumped on the FDIC.

    Both Bill and Hillary are examples of elites parlaying their positions into the rich class. They are the quintessential arrivistes. Since corruption is today’s theme, it is important to point out that $200,000 speaking fees are examples of the phenomenon of the post facto bribe. It is a system of elite welfare: play ball with the rich in your official capacity and receive nice sinecures and fees afterwards. No one can seriously think that Hillary Clinton mouthing the Conventional Wisdom and exchanging banalities for an hour can be worth even a hundredth of that sum.

    1. LucyLulu

      Hugh wrote:

      I wonder if the banks would have to take back all the derivative exposure they have dumped on the FDIC.

      Per Elizabeth Warren email of 7/11 for signatures on petition in support of bill:

      The way our system works, the FDIC insures our traditional banks to keep your money safe. That way when you want to withdraw money from your checking account, you know the money will be there. That’s what keeps our banking system safe and dependable.

      But the government should NOT be insuring hedge funds, swaps dealing, and other risky investment banking services. When the same institutions that take huge risks are also the ones that control your savings account, the entire banking system is riskier.

  11. Felix

    Everyone support the new Glass Steagall:

    Actual bill: … eagall.pdf

    This is a really positive move. Traditional banks should be boring and stable, not leveraged 30-1 on some wild bet. This will get us closer to that.

    We could actually do something here. Please write or call your Representative and Senator in support of this bill. This is a bipartisan bill if there ever was one. … acting.htm

  12. MyLessThanPrimeBeef

    ‘Debt peril’ awaits 1.25M British household if rates rise.

    Why no mention of ‘debt peril’ awaiting debt issuers?

    Oh, that’s right. They are backstopped by the central bank.

    That’s why more debt is the preferred choice by 11 out of every 10 0.01-percenters (the 1% of the 1%, sort of like the king of kings) over the alternative – paying workers more.

    Sie must make them borrow more! Dat’s an order! VHERE the heck is general Steiner?!?!

  13. charles sereno

    Re: A Billion Angry Brains (Psychology Today)
    Against my better judgment, I checked it out. I suggest that readers take a minute to research the author, Ogi Ogas, and the publisher of Psychology Today (good luck), to save time in the future. Next time you get stressed at an airport, think how your tax dollars funded creepy Ogi Ogas via the Department of Homeland Security.
    The article describes how the Internet has unleashed the fury of the 99% upon various innocents: “Everyone from THE LARGEST CORPORATIONS to twelve-year-old girls have faced the wrath of lynch mobs.” (Bold mine)

    Corporation to Lynch Mob: Please, hang me with a wet noodle!”

    1. charles sereno

      PS: I have no idea about the authenticity of the photo, but penis sheaths were ubiquitous everywhere in New Guinea. The isolation of the highland tribes was greatly exaggerated (as anthropologists are wont to do).

  14. Hugh

    Re the Warren legislation, The three things that struck me about the legislation,and this is my reading of them, are:

    1. It extends only to banks
    2. There is a 5 year window for banks/holding companies to cut their ties to their investment units, personnel, and holdings
    3. Banks will still be able to buy interest and currency swaps or purchase swaps as a specific hedge

    (14) purchasing, as an end user, any swap, to the extent that—
    (A) the purchase of any such swap occurs contemporaneously with the underlying hedged item or hedged transaction;
    (B) there is formal documentation identifying the hedging relationship with particularity at the inception of the hedge; and
    (C) the swap is being used to hedge against exposure to—
    (i) changes in the value of an individual recognized asset or liability or an identified portion thereof that is attributable to a particular risk;
    (ii) changes in interest rates; or
    (iii) changes in the value of currency;

    1. charles sereno

      Hugh, take heart if you get no immediate replies. We are taking your comment under advisement (Trans: Hey guys, have you figured it out yet?). We DO appreciate your thoughts!

    2. Yves Smith Post author

      Interest rate and currency swaps are banking businesses. Both were invented by Citi in the 1970s LONG before bank deregulation had gotten anywhere. Banks, not investment banks, were the big currency dealers. Banks get all sorts of currencies in their international branches due and are in the payment business, so currency transactions are a traditional banking business. Currency pricing is based in part on interest rate differentials, so there is a pretty direct link between currency swaps and IR swaps (plus banks separately have to manage their own interest rate risk).

      1. LucyLulu

        BUT…… if I understand correctly, it does prohibit the large derivative investor exposures such as the Merrill Lynch ones unloaded on BAC’s FDIC facility. (See my post a few above.)

  15. charles sereno

    Re: Gold markets have jumped the gun of Bernanke climb-down
    Lots of chewable stuff here. First, I like it because it mixes metaphors which I’ve always resented being accused of since it’s not always a bad thing. For example, one of the criteria I take into account when judging Bernanke pronouncements is his coincident facial appearance, namely, the contour of the line outlining his stubble. (What’s he hiding? A metaphor for a bikini line?) Reminds of speculation about the thickness of Greenspan’s briefcase before a briefing. Please, moderate me before I self-destruct.

  16. charles sereno

    Breaking news: “Asked whether Washington agreed with the German Foreign Ministry’s call for Mursi to be released, U.S. State Department spokeswoman Jen Psaki said: “We do agree.” (Reuters)
    The State Department’s thinking: Mursi wasn’t overthown in a coup, any more than Zelaya was. Else why are we sending them 4 F-16s? Psaki was overheard muttering, “Why the **** didn’t they fly him to Costa Rica?”

  17. scraping_by

    RE: Payroll card snatchbacks

    When I first read about people losing a percent of their pay to the banks, my first thought was pure Woody Guthrie

    “As through this world you travel, you’ll meet some funny men;
    Some will rob you with a six-gun, and some with a fountain pen.”

    One question comes to mind. The banks get their little crumbcatching theft and that adds up, but what would the employer get out of it? It’s supposed to be lower fees, but writing a check involves no fees. Electronic bill-payers (absurdly) costs a few bucks.

    Somewhere, sometime, some form of kickback is going to show up.

  18. downhill

    Snowden’s shitstorm shitcans Juncker.

    The most relentlessly financialized of the US satellites is destabilized. UDHR Article 25 is peeling Southern Europe off of NATO. UDHR Article 12 is peeling off the North.

    Suck. On. This. It’s America’s very own Charta 77.

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