STOCK MARKET WATCH -- Thursday, 9 January 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Thursday, 9 January 2014[font color=black][/font]

SMW for 8 January 2014

AT THE CLOSING BELL ON 8 January 2014
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Dow Jones 16,462.74 -68.20 (-0.41%)
S&P 500 1,837.49 -0.39 (-0.02%)
[font color=green]Nasdaq 4,165.61 +12.43 (0.30%)


[font color=red]10 Year 3.00% +0.01 (0.33%)
[font color=green]30 Year 3.89% -0.02 (-0.51%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.








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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

[Demeter]

1. The STATE vs. The PEOPLE Compendium

The NSA et al. is getting to be too big an issue, it is fundamentally political, and yet fundamentally economic. I'm putting it all in this subthread, for those who are getting an overdose. For the junkies--fresh meat!

4 points about the 1971 FBI break-in

http://utdocuments.blogspot.com.br/2014/01/4-points-about-1971-fbi-break-in.html?m=1

..the heroic anti-war activists ... broke into an FBI field office in 1971 and took all of the documents they could get their hands on, and then sent those documents to newspapers, including the New York Times and Washington Post. Some of those documents exposed J. Edgar Hoover's COINTELPRO program, aimed at quashing internal political dissent through surveillance, infiltration and other tactics. Those revelations ultimately led to the creation of the Church Committee in the mid-1970s and various reforms. The background on the Church Committee's COINTELPRO findings and the "burglary" operation which exposed it is here: http://www.theguardian.com/commentisfree/2013/mar/19/preemptive-prosecution-muslims-cointelpro

With the statute of limitations elapsed on their "crimes", ones the FBI could never solve, the courageous perpetrators have now unveiled themselves. The NYT story is based on a new book by Post reporter Betsy Medsger and the forthcoming documentary 1971 (of which my journalistic partner, Laura Poitras, is an Exective Producer). There are four crucial points to note:

(1) Just as is true of Daniel Ellsberg today, these activists will be widely hailed as heroic, noble, courageous, etc. That's because it's incredibly easy to praise people who challenge governments of the distant past, and much harder to do so for those who challenge those who wield actual power today. As you watch the video, just imagine what today's American commentariat, media class, and establishment figures from both parties would be saying in denouncing these activists. They stole government documents that didn't belong to them! They endangered national security! They did not take just a few documents but everything en masse that they could get their hands on. Former FBI and CIA chief William Webster is shown in the film conceding that the documents they revealed led to important debates, but nonetheless condemning them on the grounds that they used the "wrong methods" - criminal methods! - to expose these bad acts, insisting that they should have gone through unspecified Proper Channels. That all sounds quite familiar, does it not? Many of the journalists and pundits who today will praise these activists would have undoubtedly been leading the orgy of condemnations against them back then based on the same things they say today.

(2) The crux of COINTELPRO - targeting citizens for their disfavored political views and trying to turn them into criminals through infiltration, entrapment and the like - is alive and well today in the United States. Those tactics are no longer called COINTELPRO; they are called "anticipatory prosecutions" and FBI entrapment. The targets are usually American Muslims but also a wide range of political activists. See here for how vibrant these COINTELPRO-like tactics remain today: http://www.theguardian.com/commentisfree/2013/mar/19/preemptive-prosecution-muslims-cointelpro

(3) The activists sent the FBI's documents they took to various newspapers. While the Post published articles based on them (after lengthy internal debates about whether they should), the other papers, as Trevor Timm documents, "were not nearly as admirable." In particular:

According to Medsger’s book, even though the New York Times eventually published a story based on the documents, a reporter of theirs apparently handed the documents back to the FBI to help with their investigation. And the Los Angeles Times, never published any story and may have also handed the documents back to the FBI.

Moreover, the U.S. Government exhibited zero interest in investigating and prosecuting the lawbreakers inside the FBI. Instead, they became obsessed only with punishing those who exposed the high-level wrongdoing. This, too, obviously should sound very familiar.

(4) The parallels with the 1971 whistleblowers and those of today, including Edward Snowden and Chelsea Manning, are obvious. One of the 1971 activists makes the point expressly, saying "I definitely see parallels between Snowden's case and our case" and pronouncing Snowden's disclosure of NSA documents to be "a good thing". Another of the activists, John Raines, makes the parallel even clearer:

"It looks like we’re terribly reckless people," Mr. Raines said. "But there was absolutely no one in Washington — senators, congressmen, even the president — who dared hold J. Edgar Hoover to accountability."

"It became pretty obvious to us", he said, "that if we don’t do it, nobody will.”

Medsger herself this morning noted the parallels, saying on Twitter that she hopes that her book "contributes to the discussion" started by Snowden's whistleblowing. The lesson, as she put it: "we've been there before." Note, too, that these activists didn't turn themselves in and plead to be put in prison by the U.S. Government for decades, but instead purposely did everything possible to avoid arrest. Only the most irrational among us would claim that doing this somehow diluted their bravery or status as noble whistleblowers. Here again we find another example of that vital though oft-overlooked principle: often, those labelled "criminals" by an unjust society are in fact its most noble actors.

NSA Insiders Reveal What Went Wrong

http://consortiumnews.com/2014/01/07/nsa-insiders-reveal-what-went-wrong/



In a memo to President Obama, former National Security Agency insiders explain how NSA leaders botched intelligence collection and analysis before 9/11, covered up the mistakes, and violated the constitutional rights of the American people, all while wasting billions of dollars and misleading the public.

January 7, 2014

MEMORANDUM FOR: The President

FROM: Former NSA Senior Executives/Veteran Intelligence Professionals for Sanity (VIPS)

SUBJECT: Input for Your Decisions on NSA

EXECUTIVE SUMMARY

Official Washington – from Senate Intelligence Committee chair Dianne Feinstein to NSA Director Keith Alexander to former Vice President Dick Cheney to former FBI Director Robert Mueller – has been speaking from the same set of NSA talking points acquired recently via a Freedom of Information request. It is an artful list, much of it designed to mislead. Take this one, for example:

– NSA AND ITS PARTNERS MUST MAKE SURE WE CONNECT THE DOTS SO THAT THE NATION IS NEVER ATTACKED AGAIN LIKE IT WAS ON 9/11nationalsecurityagency

At a hearing of the Senate Judiciary Committee on October 2, Senator Feinstein showed her hand when she said: “I will do everything I can to prevent this [NSA’s bulk] program from being canceled.” Declaring that 9/11 “can never be allowed to happen in the United States of America again,” Feinstein claimed that intelligence officials did not have enough information to prevent the terrorist attacks.

Mr. President, we trust you are aware that the lack-of-enough-intelligence argument is dead wrong. Feinstein’s next dubious premise – that bulk collection is needed to prevent another 9/11 – is unproven and highly unlikely (not to mention its implications for the privacy protections of the Fourth Amendment).

Given the closed circle surrounding you, we are allowing for the possibility that the smell from these rotting red herrings has not yet reached you – even though your own Review Group has found, for example, that NSA’s bulk collection has thwarted exactly zero terrorist plots.

The sadder reality, Mr. President, is that NSA itself had enough information to prevent 9/11, but chose to sit on it rather than share it with the FBI or CIA. We know; we were there. We were witness to the many bureaucratic indignities that made NSA at least as culpable for pre-9/11 failures as are other U.S. intelligence agencies.

We prepared this Memorandum in an effort to ensure that you have a fuller picture as you grapple with what to do about NSA. What follows is just the tip of an iceberg of essential background information – much of it hidden until now – that goes to the core of serious issues now front and center.

The drafting process sparked lively discussion of the relative merits of your Review Group’s recommendations. We have developed very specific comments on those recommendations. We look forward to an opportunity to bring them to your attention.

_________

Introduction

We write you with a sense of urgency looking toward your upcoming decisions regarding the activities of the National Security Agency. We the undersigned (William Binney, Thomas Drake, Edward Loomis, and Kirk Wiebe) worked with NSA for a total of 144 years, most of them at senior levels. Our mission required the highest technical skills to keep the country safe from foreign enemies, while protecting the privacy rights of U.S. citizens under the Fourth Amendment to the U.S. Constitution.

For us, the 21st Century arrived with serious management and technical shortcomings at NSA in meeting the huge challenges posed by the digital and Internet age and the huge problems accompanying the transition from a Cold War footing over 40 years to an increasingly complex world with many asymmetric threats.

NSA management’s reaction in this environment not only opened the door to the attacks of 9/11 but led to violation of what had been the “First Commandment” at NSA; namely, “Thou Shalt Not Eavesdrop on Americans Without a Court Warrant.” Under the circumstances, three of us (Binney, Loomis, and Wiebe) left; Drake had just come on board in hopes of playing a constructive role in addressing the challenges at NSA.

We all share an acute sense of regret for NSA’s demonstrable culpability for what happened on 9/11, and – for those of us working there before the terrorist attacks – a remorse for not having been able to stop them. We tried; but it is hard to escape a nagging regret that, somehow, we should have tried harder.

We were there; we know what happened. And we know how what happened has been successfully covered up – until now. Calamities like this tend to happen again if there is no accountability for what happened before. You need the unvarnished truth. The flood of revelations now in the public domain frees us to address facts and events formerly hidden behind a convenient, cover-up classification regime. We feel bound by the solemn oath we took to support and defend the Constitution of the United States against all enemies, foreign and domestic, to make truths known to you that you may find as unconscionable as we do.

Why do we still care? Because we have consciences; because the oath we took has no expiration date; because we know – as few others do – how critically important it is for our country to have a well functioning, Constitution-abiding National Security Agency; and because we know how that ship can be steered back on course at that important place of work by improving its ability to find terrorists and other criminals in massive amounts of data, while protecting the right to privacy and citizen sovereignty.

Getting in the Door

It comes to us as no surprise that there is strong resistance on the part of the Establishment when it comes to giving us a hearing – a shunning of the very people who know what happened and how to take steps to prevent it from happening again.

Our predicament calls to mind that of our colleague veteran intelligence professionals, who were ignored by Official Washington and an obsequious media, when we knew that fraudulent (not mistaken) intelligence was being used to “justify” the launching of an aggressive war on Iraq 11 years ago. Establishment Washington barred the doors in 2002-2003. Just five years later our own clearances were taken away.

Now, once again the voices of seasoned intelligence professionals are being muted, in favor of a closed group of officials with huge incentive to cover up their failure to keep America safe and their playing fast and loose with the Fourth Amendment.

Mr. President, we have given up hope that your palace guard will let us in. Our chances of reaching you seem far better via this Memorandum, the 28th of its kind issued since early 2003, prepared at the behest of the Steering Group of our Veteran Intelligence Professionals for Sanity (VIPS). If this gets past your in-box protectors, we encourage you to pay more heed to it than your predecessor did to VIPS’ warnings in the months before the attack on Iraq.

In one limited sense, we are better off than our colleagues 11 years ago. This time, mainstream media have been unable to ignore the documentary evidence of rank dishonesty on the part of senior NSA and other intelligence officials. This time the media has come to us, seeking our views. This time we can comment rather freely on matters that until now were hidden under TOP SECRET stamps.

On December 26, for example, The Wall Street Journal published a lengthy front-page article, quoting NSA’s former Senior Technical Director William Binney (undersigned) and former chief of NSA’s SIGINT Automation Research Center Edward Loomis (undersigned) warning that NSA is drowning in useless data lacking adequate privacy provisions, to the point where it cannot conduct effective terrorist-related surveillance and analysis.

A recently disclosed internal NSA briefing document corroborates the drowning, with the embarrassing admission, in bureaucratize, that NSA collection has been “outpacing” NSA’s ability to ingest, process, and store data – let alone analyze the take.

54 Now Down to Zero ‘Thwarts’

It is not difficult to connect NSA’s collect-everything approach with one principal finding of the Review Group you appointed to look into NSA programs; namely, that exactly zero terrorist plots have been prevented by NSA’s bulk trawling for telephone call records. One Review Group member, your former Chicago law professor colleague, Geoffrey Stone, has confessed to being “absolutely” surprised at the group’s finding of zero. Clearly, the statements of top NSA officials left Stone wholly unprepared for the truth.

Reacting to the Review Group’s report, a member of Congress involved in intelligence issues told a reporter, “That was the ballgame … It flies in the face of everything they have tossed at us.”

While this finding of the Review Group is a further blow to Keith “54-terrorist-plots-thwarted” Alexander’s credibility, it is no surprise to us. More important, it goes to the heart of whether NSA’s bulk collection is more hindrance than help in preventing terrorist attacks. We suggest, with all due respect, that you give us an opportunity to brief you, before you find yourself repeating undocumented claims like “lives have been saved,” and demonstrably false claims that no abuses have occurred.

What passes for a process for collection and analysis at NSA appears to be highly inefficient and ineffective. How else does one explain missing the bombers of Boston, Times Square, and the underwear bomber over Detroit?

In short, we would like to talk to you about things you might otherwise have no way of knowing, given that our information reflects so poorly on top NSA management past and present. You and the country are ill served by the reluctance of your national security advisers to give a hearing to former intelligence insiders like us. Your advisers may be too inexperienced to realize that circling the wagons is not going to work this time. This time the truth will out.

Clapper & Alexander

Surely you have asked National Intelligence Director James Clapper flat-out why, in formal testimony to the Senate on March 12, 2013 he answered “No, Sir” to Senator Ron Wyden’s question, “Does the NSA collect any type of data on millions or hundreds of millions of Americans?”

Surely you know that Senate Intelligence Committee chair Dianne Feinstein persists in covering for Clapper, telling ABC three months after Clapper’s falsehood that “there is no more direct or honest person than Jim Clapper.” And now Director Clapper’s lawyer, Mr. Litt, is trying to convince readers of the New York Times that Clapper did not lie.

Surely you intuit that something is askew when NSA Director Keith Alexander testifies to Congress that NSA’s bulk collection has “thwarted” 54 terrorist plots and later, under questioning, is forced to reduce that number to one, which cannot itself withstand close scrutiny. And surely you understand why former NSA Director and CIA Director Michael Hayden protests too much and too often on Fox News and CNN, and why he and House Intelligence Committee Mike Rogers publicly suggest that whistleblower Edward Snowden be put on your Kill List.

Does a blind loyalty prevail in your White House to the point where, 40 years after Watergate, there is not a single John Dean to warn you of a “cancer on the presidency?” Have none of your lawyers reminded you that “electronic surveillance of private citizens … subversive of constitutional government” was one of the three Articles of Impeachment against President Richard Nixon approved by a bipartisan 28 to 10 vote of the House Judiciary Committee on July 27, 1974?

Let us be clear. Candor dictates that we state up front that the more skeptical among us suspect that you are not as isolated from the truth about NSA activities as it might seem. That notwithstanding, for purposes of this Memorandum we choose to adopt a broader view and assume you would welcome help from former insiders who chose to leave rather than become complicit in NSA abuses.

What we tell you in this Memorandum is merely the tip of the iceberg. We are ready – if you are – for an honest conversation. That NSA’s bulk collection is more hindrance than help in preventing terrorist attacks should be clear by now despite the false claims and dissembling.

What we shall now attempt to explain to you is how corruption – born of lust for billions of dollars, and the power that comes with that – scotched implementation of an inexpensive and demonstrably superior in-house technical program the prototype of which was up and running before 2001. Not only did it hold considerable promise, it also honored the privacy protections guaranteed American citizens under the Fourth Amendment.

Fourth Amendment-Compliant Technology That Worked

No one currently working for NSA Director Alexander is likely to tell you this, so please hear it from us. In the years before 9/11, a group of NSA mathematicians and computer technology experts led by Binney, Loomis, and Wiebe devised a process called THINTHREAD for collection and rapid analysis of billions of electronic records relating to targets of intelligence interest, with automatic encryption of information about U.S. persons, per the standard of FISA and the Fourth Amendment.

Data on U.S. citizens could be decrypted only if a judge approved it after a finding that there was probable cause to believe that the target was connected with terrorism or other crimes. It was also considerably cheaper, easier, and more secure to store such data in encrypted format rather than allow that raw information to remain vulnerable to unauthorized parties in unencrypted form, as NSA chose to do. A fuller understanding of THINTHREAD’s capabilities is necessary to appreciate the implications of what came next.

THINTHREAD, you see, was a fundamental beginning to breaking the endemic problem of stovepipes – that is, standalone collection systems with standalone databases. There was such a maze of databases, with special security compartmentation, that it was impossible for an analyst to “see” more than a few pages, so to speak, about a target, much less a whole chapter, let alone the whole available book. Information was fragmented by design, in order to placate functionaries blindly placing tight security above virtually all other considerations – even, in this case, the analyst’s need to know.

Thus, THINTHREAD was developed precisely to unite data associated with terrorists/criminals from all databases. An analyst was able to do one simple query on participants on a targeted activity and get access to all related content – be it from computer, phone, or pager.

Now, Mr. President, perhaps you have been in Washington long enough not to be surprised by what happened next to THINTHREAD. Most of us have been around a lot longer than you, but even we found it shocking – and, as we will show below, ultimately devastating in its implications.

In short, since THINTHREAD was developed in-house at NSA, it cost about $3 million to build and to make operational at three sites. Members of Congress, however, had political incentive (the imperative to appear to be doing something against terrorism) and financial interest (no need to spell that out) in throwing billions at NSA.

In the end, NSA Director Michael Hayden rejected THINTHREAD in favor of a contractor program called TRAILBLAZER, upon which billions of dollars were ultimately squandered and which never became operational. NSA SIGINT (signals intelligence) Director Maureen Baginski announced the Requiem for THINTHRAD to William Binney and Edward Loomis in a private meeting on August 20, 2001, three weeks before 9/11.

Some Programs Don’t Cost Enough

This is how it went down: In 2000, as THINTHREAD was beginning to show promise, the head of the NSA Transformation Office (NTO) asked the creators of THINTHREAD (Loomis, Binney, and Wiebe) what they could do with $1.2 billion. We told him that, with that amount of funding, we could upgrade every one of our field installations that had access to foreign Internet sources, as well as upgrade collection equipment to access greater bandwidths available on fiber. But for the equipment, maintenance, and other costs for THINTHREAD, we only needed about $300 million.

Director Hayden reacted swiftly on learning of this. He removed the NTO chief, replacing him with a senior vice president of Science Applications International Corporation (SAIC), which became one of the leading contractors for a replacement project called TRAILBLAZER. TRAILBLAZER was originally budgeted for $3.8 billion, but after burning away most of that money, it had to be jettisoned in 2006.

No functioning components had been produced, much less delivered; Gen. Hayden had been forced to confess to the Senate Intelligence Committee that TRAILBLAZER was vastly over budget as well as well behind schedule. And our (Binney/Loomis/Wiebe) complaint to the Department of Defense Inspector General had generated a highly critical report on TRAILBLAZER, which was also a factor in its termination. SAIC, though, continued to serve as one of NSA’s major prime development contractors and remains so to this day.

Hayden had announced TRAILBLAZER to great fanfare in the spring of 2000, as he began to show more preference for opening the door wider to the private sector. A year before, NSA’s New Enterprise Team, which included some of the undersigned, had begun to learn of contractor complaints over getting only maintenance contracts, while the most interesting work was being conducted in-house.

That fall, an NSA Red Team predicted that TRAILBLAZER would fail unless major changes were made to the program. Hayden, however, ignored the Red Team report, and none of the Red Team recommendations saw the light of day.

This particularly unconscionable (Hayden-SAIC-Congress) corruption is a case study in how the drive for big money and the power can squander big taxpayer bucks, chip away at our constitutional protections – and, more important, as we shall explain below – play a crucial role in the worst intelligence failure since Pearl Harbor – 9/11.

You will hear the usual denials. With all due respect, we think caution is indicated in thinking about taking them at face value. We would encourage you to get ahead of the curve this time.

The financial fiasco could not be kept from Congress or the Pentagon. Recognizing NSA’s inability to manage multi-billion dollar programs, NSA’s “Milestone Decision Authority” – that is, the responsibility for planning, acquiring, and implementing major intelligence capabilities was revoked and responsibility was transferred to the Under Secretary for Acquisition, Technology, and Logistics at the Department of Defense.

After 9/11, Most of Us Out

The financial and managerial corruption was bad enough. To our horror, after 9/11 we came to realize that the abuses occurring during the years before 2001 had gravely damaged NSA’s capability to thwart attacks like 9/11. Wiebe, Binney, and Loomis retired. Thomas Drake (also undersigned), who joined NSA on August 26, 2001, as a senior executive after many years as an NSA contractor, stayed on in an attempt to right the ship.

All of us very soon learned that we didn’t know the half of it – that is, of the misfeasance and malfeasance leading directly to NSA’s substantial contribution to the intelligence failure that day.

Again, we are prepared to brief you on the whole nine yards, so to speak. For now, we have decided to supplement the above with observations from our former colleague, Thomas Drake, who, as a contractor, had been thoroughly briefed on NSA programs, including THINTHREAD, before he joined the ranks of NSA as a senior executive. Thomas Drake writes:

“My first day on the job at NSA was 9/11. I was immediately charged as the lead NSA executive to find and deploy the best technology at NSA for the fight against terrorism. One of the programs I recommended to be resurrected for immediate operational implementation was THINTHREAD. I ran into a stone wall.

“As I pursued what I was tasked to do, I was surprised and deeply troubled to discover that, with a secret go-ahead from the White House, NSA had unchained itself from the protections of the Fourth Amendment and the Foreign Intelligence Surveillance Act of 1978. The vast power of NSA had been unleashed secretly on US citizens through a massive bulk surveillance program called STELLARWIND, a program completely unknown to most if not all of those working at the SIGINT Automatic Research Center. In the weeks after 9/11, 40 to 50 servers began arriving followed quickly by a whole new set of technical people who on September 26, 2001, turned STELLARWIND loose on all of us.

“Even after the developers of THINTHREAD left NSA in October 2001, I kept trying to get it authorized to go operational – in vain. However, I was able to acquire enough funding to complete a THINTHREAD Content Evaluation of NSA databases that contained huge amounts of collected data.

Pre-9/11 Intelligence

“That’s where I found the pre- and post-9/11 intelligence from NSA monitoring of some of the hijackers as they planned the attacks of 9/11 had not been shared outside NSA. This includes critical pre-9/11 intelligence on al-Qaeda, even though it had been worked on by NSA analysts. I learned, for example, that in early 2001 NSA had produced a critical long-term analytic report unraveling the entire heart of al-Qaeda and associated movements. That report also was not disseminated outside of NSA.

“Make no mistake. That data and the analytic report could have, should have prevented 9/11.

“Top NSA management knew that. They knew that I knew that. I was immediately shut down. In spring 2002, the remnants of THINTHREAD were unceremoniously put on the shelf in NSA’s ‘Indiana Jones’ data warehouse, never to be seen again.

Cover-up

“Hiding the worst: In December 2001, Senator Saxby Chambliss, chair of a House Subcommittee on Homeland Security announced a preliminary investigation into 9/11. At a SIGINT Leadership Team meeting in February 2002, SIGINT chief Maureen Baginski directed me to lead a NSA Statement-for-the-Record effort for a closed-door hearing scheduled by Sen. Chambliss for early March to discuss what NSA knew about the 9/11 hijackers and their plotting before 9/11.

“As indicated above, the highly embarrassing answer was that NSA knew a great deal, but had not shared what it knew outside of NSA.

“After a couple of weeks Baginski rejected my draft team Statement for the Record report and removed me from the task. When I asked her why, she said there was a ‘data integrity problem’ (not further explained) with my draft Statement for the Record. I had come upon additional damaging revelations. For example, NSA had the content of telephone calls between AA-77 hijacker Khalid al-Mihdhar in San Diego, CA, and the known al-Qaeda safe house switchboard in Yemen well before 9/11, and had not disseminated that information beyond NSA.

“In short, when confronted with the prospect of fessing up, NSA chose instead to obstruct the 9/11 congressional investigation, play dumb, and keep the truth buried, including the fact that it knew about all inbound and outbound calls to the safe house switchboard in Yemen. NSA’s senior leaders took me off the task because they realized – belatedly, for some reason – that I would not take part in covering up the truth about how much NSA knew but did not share.

“When the 9/11 Commission hearings began, Director Hayden chortled at executive staff meetings over the fact that the FBI and CIA were feeling the heat for not having prevented 9/11. This was particularly difficult for me to sit through, for I was aware that NSA had been able to cover up its own culpability by keeping investigators, committees, and commissions away from the truth.

“I subsequently blew the whistle on the TRAILBLAZER fiasco, STELLARWIND, NSA’s hoarding of critical pre- and post-9/11 intelligence, and its cover-up. I shared this information via proper channels with the Joint Congressional Inquiry on 9/11 and the Defense Department Inspector General – to no avail.

Preventing 9/11

“Against this background, it is difficult to listen to the manufactured claim so frequently heard these days to the effect that, had bulk collection been operational before 9/11, it would have prevented the 9/11 attacks. The mantra is convenient for those defending NSA overreach; it is also bogus.

“It masks the reality that, as indicated above, NSA had already collected highly significant intelligence on the hijackers themselves but did not disseminate it outside of NSA before the attacks. At best, the claim about bulk collection is one part wishful thinking and nine parts red herring.

“Not only does it exaggerate the efficacy of a collection method with zero demonstrated successes to date, but it also blows smoke in the eyes of those genuinely interested in knowing what role NSA played, or failed to play, in the months and weeks before 9/11. Worse still, this specious claim amounts to a cruel hoax on the thousands who died on 9/11, and the hundreds of thousands who died when Bush/Cheney used the attacks as a pretext to invade Iraq.”

Former Vice President Dick Cheney is widely reported to have been principally responsible for suborning then-NSA Director Michael Hayden into violating what had formerly been the “First Commandment” at NSA – “Thou Shalt Not Eavesdrop on Americans Without a Court Warrant.” So it is no surprise to see Cheney come out of the woodwork and renew his contribution toward giving dishonesty a bad name.

On December 29, Cheney picked up where Senator Feinstein and former FBI Director Robert Mueller left off in promoting the disingenuous claim that had NSA’s bulk collection been in place before 9/11, the attacks that day would probably have been prevented. Adding to his unenviable record for credibility on Sunday talk shows, Cheney told Fox News Sunday:

“As everybody who’s been associated with the program has said, if we had this before 9/11, when there were two terrorists in San Diego – two hijackers – had been able to use that program, that capability, against that target, we might well have been able to prevent 9/11.”

Cheney was basking in the glow of Judge William Pauley’s ruling two days earlier that NSA’s bulk collection is legal, in contrast to Judge Richard Leon’s ruling on December 16 that it was “almost certainly” unconstitutional. Pauley simply bought into the NSA/Feinstein/Mueller mantra, hook, line and sinker. The mantra cannot bear close scrutiny, however, no matter how many leading lights of Establishment Washington sing it.

Former FBI Director Robert Mueller had prepared the ground for Cheney, when Mueller gave factually incorrect testimony to the Senate Judiciary Committee on June 13, 2013. Mueller said that we “could not know who was calling into that particular safe house [in Yemen]. We came to find out afterwards that the person who had called into that safe house was al-Mihdhar, who was in the United States in San Diego.”

Mueller was stretching the truth well beyond the breaking point in saying “we could not know.” His intent became abundantly clear as he proceeded to put his mouth around the Big Whopper: “If we had had this program [bulk collection of telephone records] in place at that time, we would have been able to identify that particular telephone number in San Diego.” Here was the FBI director kicking dust into the eyes of gullible Senators, in order to defend an NSA program of dubious effectiveness and even more dubious constitutionality.

More recently, the “outside” insider reportedly leading your Review Group, former CIA Deputy Director Mike Morell, recited the mantra in a December 19 op-ed in the Washington Post. Morell claimed that “had the program been in place more than a decade ago, it would likely have prevented 9/11.”

Khalid al-Mihdhar

The poster boy for this PR ploy is Khalid al-Mihdhar one of the hijackers of AA-77, who had been communicating from San Diego with people in a known al-Qaeda terrorist safe house in Yemen. Al-Mihdhar had been on the radar of U.S. intelligence at least since 1999, when NSA picked up communications from a “terrorist facility” implicating him. In early 2000 he lived in San Diego, California, with fellow hijacker Nawaf al-Hazmi.

NSA knew the telephone number of the safe house in Yemen at least by1996 and was, of course, keeping track of calls to it from the U.S. Would Mueller, Morell and Cheney have us believe NSA doesn’t know about caller ID? As William Binney has explained, automated systems take over when such calls are made and as long as you have one valid number you can obtain the other. Was it a case of gross ineptitude on NSA’s part; or was NSA deliberately withholding information linking al-Mihdhar to the known al-Qaeda base in Yemen?

Richard Clarke, who was White House counterterrorism czar from 1998 through 2001, has told ProPublica that NSA had both the ability and the legal authority to trace calls from Mihdhar to Yemen. Clarke is correct. The targeting had been done; the numbers were known. The necessary authorities already existed.

No warrant would have been required, had Director Hayden simply made use of the authorities available to him via Executive Order 12333, Part II, Section 2.C, by which he could have obtained approval from the Attorney General to target all communications with the safe house in Yemen regardless of origination or destination. It remains unclear as to why this was not done, especially in light of the recent revelation that Hayden did exercise that authority AFTER 9/11 in approving STELLARWIND.

Michael Leiter, Director of the National Counterterrorism Center from 2007 to 2011, later acknowledged publicly that while monitoring the al-Qaeda switchboard safe house in Yemen (run by al-Mihdhar’s in-laws), NSA intercepted and transcribed seven calls from al-Mihdhar to the al-Qaeda switchboard. Leiter claimed that NSA didn’t figure out that the calls were coming from the U.S. Was Leiter never told that NSA knew about the switchboard and the calls from the U.S., but failed to share the intelligence with others?

We have been focusing on NSA but would be remiss were we not to add that there were plenty of opportunities to alert the intelligence community to al-Mihdhar and al-Hazmi and their whereabouts before 9/11.

For its part, the CIA had plenty of intelligence about al-Mihdhar and al-Hazmi but withheld critical pieces of it from dissemination outside CIA. This was firmly established in a Justice Department Inspector General report. The DOJ IG report added that, despite an attempt by a FBI detailee working at the CIA to share critical intelligence on the two hijackers, “that information was not released by the CIA to the FBI. We were unable to determine why this did not occur.”

Richard Clarke was also deprived of the information. During an interview on August 11, 2011, he publicly accused former CIA Director George Tenet of personally barring the dissemination of intelligence on al-Mihdhar and al-Hazmi to him (Clarke) as well as to the FBI. Clarke suggested that CIA operations officers were planning to recruit the two terrorists to work for the CIA, and once the FBI learned they were on U.S. soil the CIA would lose jurisdiction and control.

Bottom Line

It should now be clear, for those who can handle the truth, that the problems at NSA run deep – in terms of effectiveness, integrity and respect for the Constitution. By withholding information and exploiting secrecy, NSA’s leaders past and present have pulled off an unparalleled coup in concealing the sad reality that NSA could have prevented 9/11 and didn’t. And Schadenfreude chortling by leaders at the top regarding the demonstrated bureaucratic advantages and success of such dishonesty has a tendency to be heard down through the ranks, corrupting even dedicated workers.

As you ponder more recent abuses, we hope you will address the deficiencies of NSA management past and present – those who have been in charge of tens of thousands of patriotic workers doing their best in an agency whose mission is critical to our national security. And we suggest that you might wish to avoid repeating the dodgy rhetoric aimed at “proving” to us all that tragedies like 9/11 cannot be prevented unless we collect every bit and byte of signals intelligence we can.

We are in a position to know that collecting everything makes very little sense from a technical point of view. And, as citizens, we are offended by the callous disregard of the Fourth Amendment of the Constitution we all swore a solemn oath to support and defend against all enemies, foreign and domestic.

Signed/

William Binney, former Technical Director, World Geopolitical & Military Analysis; Co-founder of the SIGINT Automation Research Center.

Thomas Drake, former Defense Intelligence Senior Executive Service, NSA

Edward Loomis, former Chief, SIGINT Automation Research Center, NSA

J. Kirk Wiebe, former Senior Analyst, SIGINT Automation Research Center, NSA

PREPARED UNDER AUSPICES OF AD HOC STEERING GROUP, VETERAN INTELLIGENCE PROFESSIONALS FOR SANITY

America's Black-Ops Blackout: Unraveling the Secrets of the Military's Secret Military

http://truth-out.org/news/item/21085-americas-black-ops-blackout-unraveling-the-secrets-of-the-militarys-secret-military

...

More than a month before, I had called U.S. Special Operations Command (SOCOM) with a series of basic questions: In how many countries were U.S. Special Operations Forces deployed in 2013? Are manpower levels set to expand to 72,000 in 2014? Is SOCOM still aiming for growth rates of 3%-5% per year? How many training exercises did the command carry out in 2013? Basic stuff.

And for more than a month, I waited for answers. I called. I left messages. I emailed. I waited some more. I started to get the feeling that Special Operations Command didn’t want me to know what its Green Berets and Rangers, Navy SEALs and Delta Force commandos -- the men who operate in the hottest of hotspots and most remote locales around the world -- were doing.

Then, at the last moment, just before my filing deadline, Special Operations Command got back to me with an answer so incongruous, confusing, and contradictory that I was glad I had given up on SOCOM and tried to figure things out for myself....



THERE FOLLOWS EXTENSIVE DETAIL ON THIS INVESTIGATION

[snot]

14. +1000!

[DemReadingDU]

22. +++

Thanks for all the documentation!

[Hotler]

32. .........

[Demeter]

2. U.S. FERC power-market crackdown targets Dreyfus-Highbridge unit

FIRE THE HEADLINE EDITOR!

http://in.reuters.com/article/2014/01/06/dreyfus-ferc-idINL2N0KG1LD20140106

Commodity merchant Louis Dreyfus Energy Services may have manipulated North Dakota power markets four years ago, U.S. regulators said on Monday.

In the latest example of the Federal Energy Regulatory Commission's crack-down on power market players, the agency's enforcement arm said it has made a preliminary determination that the firm had violated rules on market manipulation.

At the time, the unit was part of a joint-venture between privately held trader Louis Dreyfus and JPMorgan Chase & Co hedge fund Highbridge.

The firm had placed "virtual trades in MISO at a node in North Dakota to affect the value of its nearby Financial Transmission Rights (FTRs) during the period November 2009 to February 2010," it said, referring to the Midwest Independent System Operator (MISO) that runs the power grid in the region...

[Demeter]

3. ECB seen on hold, but wary of slipping into 'danger zone'

http://www.reuters.com/article/2014/01/07/us-ecb-rates-idUSBREA060JH20140107

A surprise drop in euro zone inflation will concern European Central Bank policymakers but they will likely do no more on Thursday than warn of their readiness to act in future.

The policymaking Governing Council meets after data showed annual euro zone inflation dipped to 0.8 percent in December from 0.9 in November. The ECB targets inflation of just below 2 percent.

Core inflation, which strips out volatile costs like food and energy, hit a record low of 0.7 percent.

The readout will heighten concerns at the ECB about entrenched price weakness taking hold, though strong company activity towards the of last year will give them some comfort...

CAN YOU SPELL "DEFLATION", BOYS AND GIRLS? THAT'S RIGHT: D-E-A-T-H-S-P-I-R-A-L

[Demeter]

4. U.S. urges Europe to take more action on bank backstops

TO MAKE THE DEATH SPIRAL EVEN TIGHTER...

http://www.reuters.com/article/2014/01/07/france-lew-idUSL6N0KH1W020140107

The United States would like to see Europe do more to build up its backstops and bank capital, U.S. Treasury Secretary Jack Lew said on Tuesday in Paris, insisting it would be good for the European economy.

The European Union agreed a blueprint last month to close failing banks. But most economists say the plan does not go far enough to shield governments from the huge costs of winding down dud lenders.

"We've made no secret over the years that we think having backstops in place is very important and we would like to see more action taken," Lew said after meeting with French Finance Minister Pierre Moscovici.

Lew welcomed the progress Europe has made over the last 18 months building its banking union of jointly managed supervision and resolution of lenders, but there was more to gain by being bolder....

MORE DRIVEL AT LINK

[Demeter]

5. U.S. spending bill negotiations may take until weekend -Mikulski

CONGRESS IS GONNA BLOW IT--BLOW UP THE ECONOMY AGAIN...

http://www.reuters.com/article/2014/01/07/usa-fiscal-idUSL2N0KH29V20140107

Democrats and Republicans on Capitol Hill may need a few more days to resolve differences over a $1 trillion U.S. spending bill, a top Democratic lawmaker said on Tuesday, pushing passage by Congress up against a government shutdown deadline next week.

Senate Appropriations Chairwoman Barbara Mikulski told reporters that her hope to unveil the bill funding thousands of government projects and programs on Wednesday was "a fading dream" amid the unresolved disputes.

After meeting with the top Republicans and Democrats on the Senate and House of Representatives Appropriations committees, she said that the "omnibus" spending measure may take until the weekend to complete.

That would allow little time to secure passage in the House and Senate by Jan. 15, when current government funding runs out. Without a new spending bill or a stop-gap funding measure known as a continuing resolution, the government faces a potential repeat of the shutdown that hit federal agencies in October...

MORE "MAD"NESS AT LINK (MUTUALLY ASSURED DESTRUCTION)

[Demeter]

6. Obamacare and Those Invincible Youngsters By Dean Baker

http://truth-out.org/opinion/item/21035-obamacare-and-those-invincible-youngsters

There is an ongoing media obsession with the number of young people who sign up for health care insurance through Obamacare...The story is that these young people will subsidize the rest of us by paying more for their insurance than they receive back from the system in benefits. The excessive payments from young people will cover the cost of the older sick people in the exchange... the story of the young invincibles has come to be a major morality play with some supporters of Obamacare arguing that these young people have a duty to sign up for their plan. Some have tried to appeal to self-interest, pointing out that even young healthy people can get in accidents or hit by serious illness.

Opponents of Obamacare have also picked up on the young invincibles, seeing them as their last desperate hope in undoing Obamacare. Some right-wing groups have even gone so far as to have rallies for young people to burn fake Obamacare cards.

The problem with the young invincible story is that almost every part of it is wrong. It is true that under the rules set up for insurers in the exchanges young people will on average provide somewhat of a subsidy for older people. However the size of this subsidy is relatively minor. It also is primarily a young male story since young women tend to do things like have children that raise their health care costs.

Furthermore, since the extent of the subsidy from the young to the old is relatively small, it really doesn’t matter much how many young people sign up for the program. The Kaiser Family Foundation did an analysis showing that even an extreme skewing of enrollees toward older people would only raise costs in the program by two percent. A two percent increase in costs is not close to being enough to produce the sort of death spiral that is the dread of Obamacare supporters and dream of Obamacare opponents... it does obscure the nature of the subsidies that occur under Obamacare and indeed any insurance. The subsidies are inevitably from the more healthy to the less healthy. And in fact those subsidies are much larger from the healthy old than the healthy young....

MORE

[Demeter]

7. Will Elizabeth Warren Oppose Obama's Pick for Banking Watchdog?

http://www.motherjones.com/politics/2013/12/will-elizabeth-warren-support-obamas-pick-banking-watchdog

In December, President Barack Obama nominated attorney Sharon Bowen to help run the Commodity Futures Trading Commission (CFTC), which regulates derivatives and futures markets. Bowen has little experience in derivatives, and she has represented big banks in court. Financial-reform advocates are skeptical that she is the right woman for the job—and are trying to generate opposition to the nominee. But the real question is this: Will middle-class crusader Sen. Elizabeth Warren (D-Mass.) oppose Bowen's confirmation? And if she did, would that derail Bowen's candidacy?

If Warren signals she will vote against Bowen, other key senators may follow suit, and that could cause a problem for the White House and Bowen. There's precedent for this. In September, Warren's no-vote threat helped scuttle the nomination of former Treasury Secretary Larry Summers, whom Obama was considering as chairman of the Federal Reserve.*MORE

THAT, LADIES AND GENTLEMEN, IS POWER. THAT IS LEADERSHIP. THAT IS OUR HOPE AND CHANGE PERSONIFIED.

[Demeter]

8. Yahoo malware turned European computers into bitcoin slaves

http://www.theguardian.com/technology/2014/jan/08/yahoo-malware-turned-europeans-computers-into-bitcoin-slaves?CMP=ema_565



As many as two million European users of Yahoo may have received PC malware from virus-laden ads served by its homepage over a four-day period last week.

Some of the malware would turn PCs into bitcoin miners - a huge drain on its computing resources - without users' knowledge. Yahoo has been criticised for not saying how many people could be affected or doing anything to help those with the malware, which attacked flaws in Java modules on systems.

In a statement, Yahoo said: "From December 31 to January 3 on our European sites, we served some advertisements that did not meet our editorial guidelines – specifically, they spread malware." Users in North America, Asia Pacific and Latin America weren't affected, Yahoo said. Nor were users of Apple Macs or mobile devices.

"We will continue to monitor and block any advertisements being used for this activity," the company added. "We will post more information for our users shortly."


MORE CUTTING AND PASTING AT LINK

[Demeter]

9. WEDNESDAY Stocks mostly lower after Fed releases minutes

http://www.latimes.com/business/la-fiw-wall-street-20140108,0,2497223.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+%28L.A.+Times+-+Business%29&utm_content=My+Yahoo

The stock market stumbled Wednesday as investors waited for the government's jobs report later this week and the beginning of quarterly earnings releases from corporate America.


Traders put aside a positive report that showed private employers created more jobs in December than economists had expected. The market had a muted reaction to the minutes from the Federal Reserve's mid-December policy meeting.

Wednesday's declines extend what has been a muddled start to 2014. Both the Dow Jones industrial average and the Standard & Poor's 500 index are down a little less than 1 percent after five days of trading.

The tough start should be taken in context of last year's exceptional performance, when the S&P 500 surged almost 30 percent...

MORE TEA LEAVES AT LINK

[Demeter]

10. I hope the sky is clear on the route

Solar Flare Will Hit Earth Thursday; Northern Lights May Expand South

http://www.npr.org/blogs/thetwo-way/2014/01/08/260854919/solar-flare-will-hit-earth-thursday-northern-lights-may-expand-south?ft=1&f=1001

...An intense solar flare is being blamed for disrupting and could force airlines to reroute some flights. That's the bad news. The good news is that the flare is also expected to expand the viewing field of the Aurora Borealis southward, perhaps down to Colorado and Illinois....



I DON'T KNOW IF I'VE SEEN THE AURORA BEFORE, SO I'LL BE LOOKING NORTH IN THE DARK SPOTS ON THE ROUTE...

[Demeter]

12. Time for Bed; Sweet Dreams, All!

[Tansy_Gold]

13. Saw the aurora several times in Indiana and Chicago

But the weather is always the iffy thing.

Here in AZ the skies are clear, but too far south.

Then again, I can't complain when we get an almost nightly skywide view of the Milky Way.

[Demeter]

11. U.S. Judge approves JPMorgan criminal settlement in Madoff case

http://news.yahoo.com/u-judge-approves-jpmorgan-criminal-settlement-madoff-case-222519870--sector.html

A federal judge on Wednesday approved an agreement between JPMorgan Chase & Co and U.S. prosecutors to settle charges that the bank violated anti-money laundering laws by failing to alert authorities to warning signs its employees encountered in dealings with convicted Ponzi schemer Bernard Madoff.

The settlement, which deferred the criminal charges against the bank until January 8 2016, requires JPMorgan to pay a $1.7 billion forfeiture and improve its anti-money laundering controls. If it meets the terms by the appointed date, prosecutors can dismiss the charges against it.

U.S. district Judge P. Kevin Castel approved the deferred prosecution agreement during a short hearing Wednesday, saying "I find the need to require judicial intervention to protect the integrity of the process is not necessary."

MORE

[Demeter]

15. Management cares!

[xchrom]

16. European Central Bank keeps rates at record 0.25% low

http://www.bbc.co.uk/news/business-25669663

The European Central Bank (ECB) has kept its benchmark interest rate at a record low of 0.25%.

There had been speculation that the bank might act to bolster fragile growth in the 18-nation euro bloc.

With eurozone inflation falling below 1%, there is also concern about deflation as consumers delay purchases in the hope of prices falling further.

ECB president Mario Draghi will hold a news conference later on Thursday to explain the bank's decision.

[xchrom]

17. China seeks more disclosure from banks

http://www.bbc.co.uk/news/business-25663545

China's major banks have been asked to publish data on 12 key indicators, including off balance sheet assets, to enhance their transparency.

Banks with total assets of 1.6 trillion yuan ($264bn; £160bn) will need to publish the data within four months of the end of each financial year.

China said the move was in line with rules published by the Basel Committee on international banking regulation.

There have been growing concerns over rising bad debts at Chinese lenders.

[xchrom]

18. India eases gold lending rules

http://www.bbc.co.uk/news/business-25663872

India's central bank has increased the amount that finance companies can lend in return for gold deposits.

Under the new rules, non-banking finance companies (NBFCs) can lend up to 75% of the value of gold, from 60%.

The central bank revised the rules because their gold loan portfolios were showing only moderate growth.

Lending against gold is a fast-growing business in the Indian economy, and the industry is valued at more than $20bn (£12bn).

[xchrom]

19. Japan To Officially Claim 280 Remote Islands In Latest Territorial Move

http://www.businessinsider.com/japan-to-officially-claim-280-remote-islands-in-latest-territorial-move-2014-1

TOKYO (Reuters) - Japan is set to clarify the ownership of 280 remote islands in its territorial waters and register them as national assets, a move that could rile China and South Korea, which are engaged in territorial disputes with Tokyo.

Japan's move to survey the islands and claim those with no apparent owners was announced this week and continues a plan first begun five years ago, an official at the country's Oceanic Policy and Territorial Issues secretariat said.

"Basically the idea is to register these islands as national assets," said the official, who declined to be identified.

He said the location of the islands remained unclear until the survey was completed, but they were all within Japanese territorial waters and the boundaries of the country's exclusive economic zone (EEZ) would not change.



Read more: http://www.businessinsider.com/japan-to-officially-claim-280-remote-islands-in-latest-territorial-move-2014-1#ixzz2puG5yIv4

[xchrom]

20. China Is Spending $100 Billion On 4,100 Miles Of New Railway Lines This Year

http://www.businessinsider.com/china-new-railway-lines-2014-1

BEIJING (Reuters) - China will spend over $100 billion on more than 6,600 km (4,100 miles) of new railway lines this year, Xinhua news agency said, citing a senior industry official.

The general manager of the state-owned China Railway Corporation (CRC), Sheng Guangxu, was quoted as saying that the bulk of the 630 billion yuan ($104.11 billion) investment would be in the underdeveloped central and western regions.

It said CRC had already put 5,586 km of rail lines into operation since its formation last March following the dissolution of the Ministry of Railways.

China abolished the ministry in March and transferred its regulatory duties to the Ministry of Transportation.



Read more: http://www.businessinsider.com/china-new-railway-lines-2014-1#ixzz2puGnqF5q

[Demeter]

21. Aurora Borealis

I doubt that I saw them, but there were some pinkish clouds in a direction that has no sodium vapor lighting.

The driver who brings the bundles saw them, out by the printing plant, which is in the middle of nowhere. I saw snowflakes.

Better luck next time.

[xchrom]

23. CHART: A Diminishing Fiscal Drag Will Be Bullish For Most Of The Developed World

http://www.businessinsider.com/reduced-fiscal-drag-in-us-uk-euro-2014-1

Efforts to shrink government deficits and debts have been economically painful and have held back short-term growth.

But in 2014, that fiscal drag is expected to ease significantly in the much of the developed world.

Here's Guggenheim Partners' Scott Minerd:

Reduced Fiscal Drag in Advanced Economies

Major advanced economies (with the notable exception of Japan) should in 2014 have significantly less fiscal policy drag on growth. Leading the way is the United States, where sequester-mandated budget cuts will decrease and the effects of higher payroll taxes should diminish. The euro zone should also benefit as budgetary austerity fades. Britain should also have a slightly smaller fiscal drag. Overall it’s a rosier picture for global growth in 2014, as economies around the world should benefit from faster growth, especially since demand is improving in advanced economies that make up over 40 percent of global GDP.

It's one of the more significant factors that has experts bullish about 2014.



Read more: http://www.businessinsider.com/reduced-fiscal-drag-in-us-uk-euro-2014-1#ixzz2puLpVAaP

[xchrom]

24. Europe Is Making Small But Significant Steps Toward A Banking Union

http://www.businessinsider.com/roadmap-to-a-banking-union-2014-1

In the ever-complicated effort to form a true European banking union, policymakers closed out 2013 with a notable milestone: The Single Resolution Mechanism announced at a Dec. 18 meeting of national finance ministers in Brussels established a long-awaited framework for winding down failing banks in future crises. Italian Finance Minister Fabrizio Saccomanni and others hailed the agreement as the most important shift in euro-zone economic policy since the creation of the single currency. Critics lambasted the deal’s shortcomings, and Credit Suisse’s European Economics team called it “a convoluted step” toward a banking union. But it’s better than nothing.
Under the agreement, the first line of defense against future bank failures will be a so-called “bail-in” shouldered by banks’ large depositors (those with more than €100,000 in their accounts), shareholders and bondholders. If enacted, that measure will take effect in 2016, and will require that shareholders and creditors take losses equivalent to 8 percent of a lender’s total liabilities before national authorities can step in to rescue a bank. Should that prove insufficient, policymakers also agreed to create a €55 billion fund that would rescue ailing banks, with the caveat that the fund would only be allowed to pay up to an additional 5 percent of an institution’s total liabilities. No more than 10 percent of the fund could be disbursed in a single year without special permission.

The plan for the new resolution fund calls for it to be created gradually over the next 10 years through a levy on banks, thereby placing the responsibility for funding future bailouts squarely on the financial institutions that might need them, rather than on taxpayers and governments. At first, national governments will collect and administer payments from their own banks. Over the course of the decade, the national funds will be combined into one common pool that will then be available to banks throughout the region. “One good element of the agreement is that in the long run the Single Resolution Fund will be fully European,” Credit Suisse’s European Economics team noted last month. That’s not to say that national coffers will not be tapped in future financial crises. But having both strict bail-in rules as well as a resolution fund to call on ahead of government funds would have the effect of limiting the public’s financial exposure to future bailouts.



Read more: http://www.thefinancialist.com/roadmap-to-a-banking-union/#ixzz2puMNX3pa

[xchrom]

25. Jobless Claims in U.S. Decrease to Lowest Level in a Month

http://www.bloomberg.com/news/2014-01-09/jobless-claims-in-u-s-decrease-to-lowest-level-in-a-month.html

Applications for U.S. unemployment benefits fell last week to the lowest in a month as improvements in the economy prompted employers to retain workers.

Jobless claims declined by 15,000 to 330,000 in the period ended Jan. 4, the Labor Department reported today in Washington. The median forecast of 47 economists surveyed by Bloomberg projected 335,000. The data can be volatile after the holidays as temporary workers are dismissed, a Labor Department spokesman said as the report was released to the press.

Employers are probably becoming more confident the economy will pick up as consumer spending improves and fiscal policy becomes less restrictive after lawmakers agreed on ways to limit budget cuts slated for this year. A report tomorrow is projected to show that the employment gain for 2013 was the biggest in eight years.

“The labor market is continuing to strengthen as we go into 2014,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut, who accurately forecast the drop in claims. “We should continue to see the unemployment rate go lower.”

[xchrom]

26. Funds With $100 Billion May Be Too Big to Fail, FSB Says

http://www.bloomberg.com/news/2014-01-08/funds-with-100-billion-may-be-too-big-to-fail-fsb-says.html

Investment funds that manage more than $100 billion in assets may be labeled too big to fail, global regulators said, as they seek to expand financial safeguards beyond banks and insurers.

Hedge funds with trading activities exceeding a set value of $400 billion to $600 billion would also be assessed by national authorities to gauge whether they need extra rules because their collapse could spark a crisis, the Financial Stability Board said in a statement yesterday.

The report addresses “the risks to global financial stability and economic stability posed by the disorderly failure of financial institutions other than banks and insurers,” Mark Carney, Bank of England governor and FSB chairman, said in the statement. “They are integral to solving the problem of financial institutions that are too big to fail.”

The FSB, which brings together regulators and central bankers from the Group of 20 nations, is ranking banks and insurers by their potential to cause a global meltdown and demanding bigger financial cushions to avert a repeat of the 2008 credit freeze. Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, was added to the FSB’s list of too-big-to-fail banks in November. Insurers such as American International Group Inc. and Allianz SE were deemed systemically important in July.

[xchrom]

27. Corn Pile Biggest Since 1994 as Crop Overwhelms Use: Commodities

http://www.bloomberg.com/news/2014-01-09/corn-pile-biggest-since-1994-as-crop-overwhelms-use-commodities.html

Stockpiles of corn in the U.S., the world’s top grower, are rising at the fastest pace in 19 years as a record crop overwhelms increased demand for the grain used to make livestock feed and ethanol.

Inventories on Dec. 1, the first tally since the harvest was complete, probably totaled 10.764 billion bushels (273.4 million metric tons), 34 percent more than a year earlier, according to the average of 24 analyst estimates in a Bloomberg survey. The biggest gain for that date since 1994 signals ample supplies may extend the slump in March futures by 10 percent to $3.75 a bushel, according to Newedge USA LLC’s Dan Cekander.

Reserves are recovering after a drought in 2012 sent prices to a record, sparking a surge in output from the U.S. to Brazil and Ukraine. Farmers probably harvested more corn than the government forecast last month, expanding a global glut, separate surveys showed. Corn futures tumbled 40 percent last year, leading a slump in commodity prices that helped send global food costs down 14 percent from an all-time high in 2011.

“We have moved away from a supply deficit after the 2012 U.S. drought to one of surplus corn supplies,” said Bill Tierney, the chief economist for AgResource Co. in Chicago. “It will take two or more years for demand to catch up to more-abundant inventories.”

[xchrom]

28. Portugal Said to Cut Borrowing Costs Amid Europe Bond Rally

http://www.bloomberg.com/news/2014-01-09/portugal-selling-five-year-bonds-as-its-bailout-exit-approaches.html

Portugal is taking advantage of a sovereign-debt rally in Europe to cut borrowing costs with its first sale of bonds in eight months.

The additional 4.75 percent securities due in June 2019 will yield 330 basis points more than the mid-swap rate, said a person familiar with the arrangement, who asked not to be identified because they’re not authorized to speak about it. That’s down from initial price talk of about 340 basis points.

“Portugal will have no problem raising the remaining funds it needs this year from the bond markets,” Justin Knight, a strategist at UBS AG, said in a research note today. “The imminent five-year tap via syndication will probably provide much of the 7.1 billion euros needed to be raised from the private sector in 2014.”

With the end of its 78 billion-euro ($106 billion) rescue program from the European Union and International Monetary Fund approaching in June, Portugal is following Ireland with a return to debt markets as prices rally this week. Ireland last month became the first nation to exit a rescue program since the euro region’s sovereign debt crisis broke out in 2009. Spain auctioned five-year notes today to yield 2.382 percent, the lowest on record.

[xchrom]

29. Currency Chiefs Tell New York Fed Probes May Change Practices

http://www.bloomberg.com/news/2014-01-09/currency-chiefs-tell-new-york-fed-probes-may-change-practices.html

Foreign exchange dealers from the world’s biggest banks told the Federal Reserve Bank of New York the global probe into manipulation of currency rates could prompt an overhaul of the way they handle customer orders, minutes released by the central bank show.

Currency chiefs from banks including JPMorgan Chase & Co. (JPM), Barclays Plc (BARC) and Citigroup Inc. (C) met with six officials from the New York Fed at a Nov. 13 meeting of the Foreign Exchange Committee -- an industry group sponsored by the New York Fed -- according to minutes released by the group.

“Private sector members suggested that any investigations and/or supervisory activity related to this subject could eventually result in recommended changes to best practice guidance,” according to the minutes from the meeting, which was hosted by JPMorgan.

Regulators from Switzerland to Washington are examining evidence reported by Bloomberg News in June that currency dealers had been front-running client orders and attempting to rig foreign-exchange rates by colluding with counterparts and pushing through trades before and during the 60-second windows when key benchmarks such as the WM/Reuters rates are set, known as the fix. They would share details with brokers and counterparts at banks through instant messages to align their strategies, two of the people said at the time.

[xchrom]

30. German Industrial Output Rises First Time in Three Months

http://www.bloomberg.com/news/2014-01-09/german-industrial-output-rises-first-time-in-three-months.html


German industrial production rose for the first time in three months in November, adding to signs that Europe’s largest economy is gathering pace.

Output, adjusted for seasonal swings, increased 1.9 percent from October, when it fell 1.2 percent, the Economy Ministry in Berlin said today. Economists predicted a gain of 1.5 percent, according to the median of 32 estimates in a Bloomberg News survey. Production climbed 3.5 percent from a year earlier when adjusted for working days.

Today’s reading reinforces recent economic data that point to strengthening growth in Germany. Factory orders rose more than economists expected in November and Ifo business confidence surged to the highest level in 20 months at the end of last year, underpinning a Bundesbank prediction that gross domestic product will increase “strongly” in the coming months.

“The recovery in the industrial sector in Germany has been gaining momentum toward the end of the year,” said Andreas Rees, chief German economist at UniCredit MIB in Munich. “We are getting more and more positive signals from the German economy but also from the European economy.”

[xchrom]

31. Banks May Have Mispriced Things That Had No Price

http://www.bloomberg.com/news/2014-01-08/banks-may-have-mispriced-things-that-had-no-price.html

There's not a ton of detail in this Wall Street Journal article about federal regulators' "wide-ranging examination of mortgage-bond sales by banks in the years that followed" the financial crisis but ooh boy is it interesting. The examination seems largely metaphysical, looking not so much into the banks' e-mails as their souls. Here:

Regulators are investigating whether traders exploited the murky pricing around residential mortgage-backed securities from around 2009 through 2011 to buy or sell the investments at artificially depressed or inflated values, the people close to the inquiry said. The other parties in such transactions would typically be rival banks, hedge funds and other large investment firms.

Unlike with publicly traded stocks, where pricing is transparent, investors in mortgage-backed securities markets often rely on traders to disclose honestly the prices paid and the commissions charged. It is generally illegal for traders to misrepresent to investors aspects of a transaction that are important enough to affect the decision to buy or sell.

So what aspects of a mortgage-backed security "are important enough to affect the decision to buy or sell"? A conventional answer would be something like "the creditworthiness of the underlying borrowers, the values of the homes used as collateral, etc." And there've been lots of lawsuits about banks that misrepresented those sorts of things in the pre-crisis period and have gotten in bad trouble.1

[Hotler]

33. One more recipe.

I shared this with Xchrom just before Christmas and I should share it with all you also.
This is really good and real easy. Great for pot-lucks.
Corn Casserole
20-24 oz. frozen corn
1-can cream style corn
1-stick melted butter or margarine
1-box Jiffy corn muffin mix
1-cup sour cream
Mix thoroughly
Bake in oven at 350 until center of casserole is firm, not soupy.
About 1 1/2 hr.

[jakeXT]

34. BlackRock agrees to end analyst surveys

(Reuters) - BlackRock Inc (BLK.N), the world's largest asset manager, agreed to end its analyst survey program worldwide, as part of an agreement reached Wednesday with the New York Attorney General's office.

The agreement stems from an investigation by New York Attorney General Eric Schneiderman into the early release of Wall Street analyst sentiment, which can move markets.

BlackRock agreed to pay $400,000 for the cost of the investigation, but no fine or penalty, and to cooperate in any investigation related to the probe.

"BlackRock deserves credit for recognizing the need for reform when it comes to the dissemination of information that can move markets," Schneiderman said in a statement. He called the agreement "a major step forward in restoring fairness in our financial markets and ensuring a level playing field for all investors."

http://mobile.reuters.com/article/idUSBREA0808S20140109?irpc=932