NSA Trojan Firmware Widespread, U.S. International Tech Reputation May Suffer. Tech Privacy Has Been a Myth.
Submitted by GoldCore on 02/17/2015 07:52 -0500
New York Times
Today’s AM fix was 1,221.75 USD, 1,072.56 EUR and 793.86 GBP per ounce.
Yesterday’s AM fix was USD 1,233.50, EUR 1,81.12 and GBP 801.91 per ounce.
The U.S. market was closed yesterday for a national holiday.
New NSA spying scandal emerges, highlighting the scale of cyber wars
Agency can access hard-drives made by major U.S. producers
Computers in over 30 countries, including NATO allies, were hacked
Iran and Russia were main targets
Revelations may impact technology sector in the U.S. as institutions around the world seek alternatives
Kaspersky Lab, the Moscow-based cyber security firm whose report into international hacking was previewed by the New York Times Yesterday, has exposed that the NSA has had the capacity to snoop on most U.S.-made computers since 2001.
The report claims that the NSA attained access to "firmware" code from all the major Western computer manufacturers - which runs every time a computer is switched on - and figured out how to lodge malicious software in the code.
The terminology may be foreign to you but imagine if you will what your world would be like if the digital records of your wealth and property titles simply vanished or became corrupted. Imagine the screen just going dark. It sounds alarmist but that is exactly the sum total of the high stakes games now being played out by the world’s superpowers - you and I are the pawns.
The global economy is thoroughly integrated and processes and knowhow are increasingly delivered on distributed architecture made up of lattices of public and private networks. This approach has wonderful benefits and can deliver scale and flexibility and speed in equal measure. But therein lies the risk, the physical spying infrastructure with engineered back doors must remain hidden in order to be effective and useful to the spies who placed them there. What the intelligence community has done has created the mother of all “single point of failures” and the potential for calamity and social disintegration is almost too great to countenance. They assume that with adequate controls these systems can be kept safe and used effectively. They said the same about nuclear procurement and weaponised viruses.
The fact is that in time marketable information will always eventually leak and be traded. Enemy interests would likely, as a priority action, seek to seize control of this infrastructure and either use it to attack American interest and allies or exploit its data collection capabilities - perhaps they already do. Remember, Snowden was a contractor and the access he had was incredible. The sheer arrogance of what they have done is staggering.
Kaspersky's reconstructions of the spying programs show that they could work in disk drives sold by more than a dozen companies, comprising essentially the entire market. They include Western Digital Corp, Seagate Technology Plc, Toshiba Corp, IBM, Micron Technology Inc and Samsung Electronics Co Ltd.
A Kaspersky spokesman, Costin Raiu said "There is zero chance that someone could rewrite the [hard drive] operating system using public information," indicating that the NSA was given the sensitive code by manufacturers.
Over 30 countries were targeted, including NATO allies. Britain, France, Belgium and Germany all had systems violated.
The revelations that telecommunications systems were infiltrated in Germany will likely be met with interest in that country, following previous revelations that the NSA had tapped the cell phone of Angela Merkel.
Both Iran and Russia experienced a high level of NSA hacking, along with China, Pakistan, India, Afghanistan, Syria and Mali.
In Iran, a full range of systems were were targeted, including those of the government, diplomatic and energy agencies, finance, telecommunications and research institutions and universities.
Russia's military was targeted as were the energy sector and research and medical sectors among others.
The NSA declined to comment on the allegations. Reuters was able to get confirmation of the revelations from former NSA employees.
It is too early at this point to speculate on the implications of the report. It may be that the story will simply fade away. Or, as is often the case, it may be the tip of the iceberg with further, more damaging details to follow.
"Kaspersky on Monday published the technical details of its research, a move that could help infected institutions detect the spying programs, some of which trace back as far as 2001," the Moscow Times reports.
The revelations may have a negative impact on the U.S. technology industry. China has already been drafting regulations, requiring bank technology suppliers to submit their software code for inspection.
Why on earth would a foreign marketplace import American technology if they know that there is a very good chance the technology will be countermanded and the data use against the owner? It is akin to wheeling in a Trojan horse when actually knowing what lays hidden inside.
Ultimately this strategy could serve to severely hobble the American tech industry, the American economy and ultimately American jobs. This is an example of shortsighted leadership, militaristic thinking. The supporters will argue that industrial data can be traded and used to give U.S. companies a leg up on foreign competitors and perhaps this is true, but such help would be very time sensitive and probably slow in propagating given the speed of commercial development.
At the end of the day, the reality of the matter is that we don’t even need a Federal Reserve. I really like how David Stockman made this point the other day…
At the end of the day, American capitalism does not need recycled political hacks like Jerome H. Powell or clueless school marms like Janet Yellen to thrive. If we need a Fed at all, it is the one designed by Carter Glass 100 years ago. That is, a “bankers bank” that was intended to provide standby liquidity at a penalty spread above the free market interest rate in consideration for good collateral originating from inventory and receivables in the real economy.
Under that arrangement, there would be no monetary central planning or pointless attempts to manage the level of GDP, the number of new jobs, the rate of housing starts, the fluctuations of the CPI or the amplitudes of the business cycle. There would also be no pegging of the money market rate, no helping hand for Wall Street gamblers, no cheap debt to enable profligate politicians to kick-the-can down the road indefinitely.
In short, what the nation really needs is not an “independent” Fed, but one that is shackled to a narrow and market-driven liquidity function. The rest of its current remit is nothing more than the self-serving aggrandizement of the apparatchiks who run it; and who have now managed to turn the nation’s vital money and capital markets into dangerous, unstable casinos, and the nations savers into indentured servants of a bloated and wasteful banking system.
#2 The Federal Reserve is actually “independent” of the government. In fact, the Federal Reserve has argued vehemently in federal court that it is “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.
#3 The Federal Reserve openly admits that the 12 regional Federal Reserve banks are organized “much like private corporations“.
#4 The regional Federal Reserve banks issue shares of stock to the “member banks” that own them.
#5 100% of the shareholders of the Federal Reserve are private banks. The U.S. government owns zero shares.
#7 According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is the one that is supposed to have the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”. So why is the Federal Reserve doing it?
#9 In 1963, President John F. Kennedy issued Executive Order 11110 which authorized the U.S. Treasury to issue “United States notes” which were created by the U.S. government directly and not by the Federal Reserve. He was assassinated shortly thereafter.
#14 The Federal Reserve was designed to be a perpetual debt machine. The bankers that designed it intended to trap the U.S. government in a perpetual debt spiral from which it could never possibly escape. Since the Federal Reserve was established 100 years ago, the U.S. national debt has gotten more than 5000 times larger.
#15 A permanent federal income tax was established the exact same year that the Federal Reserve was created. This was not a coincidence. In order to pay for all of the government debt that the Federal Reserve would create, a federal income tax was necessary. The whole idea was to transfer wealth from our pockets to the federal government and from the federal government to the bankers.
#16 The period prior to 1913 (when there was no income tax) was the greatest period of economic growth in U.S. history.
#17 Today, the U.S. tax code is about 13 miles long.
#18 From the time that the Federal Reserve was created until now, the U.S. dollar has lost 98 percent of its value.
#19 From the time that President Nixon took us off the gold standard until now, the U.S. dollar has lost 83 percent of its value.
#20 During the 100 years before the Federal Reserve was created, the U.S. economy rarely had any problems with inflation. But since the Federal Reserve was established, the U.S. economy has experienced constant and never ending inflation.
#21 In the century before the Federal Reserve was created, the average annual rate of inflation was about half a percent. In the century since the Federal Reserve was created, the average annual rate of inflation has been about 3.5 percent.
Good trading to everyone.
The following user says Thank You to aquarian1 for this post:
March 30: The Greek government may submit a comprehensive list of proposed reforms by this date in order to secure more bailout funds. The aim of meeting this deadline would be to speed up the disbursement of money from the schedule agreed on in February, when the European Commission, European Central Bank and the International Monetary Fund granted a four-month extension of the existing bailout agreement.
April 9: Greece will have to make a payment to the IMF of about 360 million Special Drawing Rights (SDRs). That equals about 458 million euros.
April 14: Greece must roll over 1.4 billion euros of Treasury bills.
April 17: Greece must roll over 1 billion euros of Treasury bills.
End-April: Under the February extension agreement, Greece must provide further details on its promised reforms and these must be approved by the ECB, the IMF and the European Commission.
May 8: Greece must roll over 1.4 billion euros of Treasury bills.
May 12: Greece will have to make the largest payment of the month -- about 601 million SDRs to the IMF. That equals about 763 million euros. Payments due throughout May total 758 million SDRs. That equals about 963 million euros. For the exact dates, see the IMF’s website.
May 15: Greece must roll over 1.4 billion euros of Treasury bills.
June 5: Greece will have to make a payment of about 240 million SDRs to the IMF. That equals about 305 million euros.
June 12: Greece will have to make a payment of about 270 million SDRs to the IMF. That equals about 344 million euros.
June 12: Greece must roll over 3.6 billion euros of Treasury bills.
June 16: Greece will have to make a payment of about 451 million SDRs to the IMF. That equals about 573 million euros.
June 19: Greece will have to make a payment of about 270 million SDRs to the IMF. That equals about 344 million euros.
June 19: Greece must roll over 1.6 billion euros of Treasury bills.
End-June: The extension expires for the “Master Financial Assistance Facility Agreement,” as Greece’s bailout is known.
July 10: Greece must roll over 2 billion euros of Treasury bills.
July 13: Greece will have to make a payment of about 360 million SDRs to the IMF. That equals about 458 million euros.
July 20: Greece’s 3.5 billion-euro bond held by the ECB matures.
Aug. 8: Greece must roll over 1 billion euros of Treasury bills.
Aug. 20: Greece’s 3.2 billion-euro bond held by the ECB matures.
"Ultimately, the current QE programs will fail. I think most likely through a large devaluation in the emerging market currencies. We have already seen all the members of the BRICS family devalue, except for the only one that really matters, China. Increasingly policy making activity by Chinese authorities, including a recent policy of promoting margin trading by domestic investors to create a bull market in stocks, strikes me as particularly desperate.
So rather than being in a quick knockout fight, these last three years have more closely resembled the “Rumble in the Jungle”. In this fight an aging Muhammed Ali took on younger George Foreman. The bookmakers gave Ali next to no chance of winning, as George Foreman was both fast and strong and had easily beaten fighters that had recently beaten Ali. In the first round, Ali tried for a quick knockdown but to no avail. In subsequent rounds, Ali allowed George Foreman to catch him on the ropes while he leant way out of the ring, trying to limit the damage of the punches. As the fight wore on, George Foreman started to grow visibly tired, and Ali started landing punches. Ultimately, by the eight round George Foreman was spent, and Ali went in for the kill.
I am increasingly finding it easier to short, particularly in the US markets. Having dodged and parried so many blows from Central Bank QE programs, the market is seemingly failing to break higher. Breadth is narrowing in the US stock market, and credit spreads widening. Economic data, with the exception of jobs, which is a lagging indicator, indicate the US economy is peaking. To me it looks like the US and China might go into recession at the same time. For this reason I have been adding continually to the short book since the beginning of the year. The market looks tired and weak. Time to look for a knockout punch. Your fund remains net short equities and long bonds.