Feds Lose Bid for Amazon.com Customer Records
November 29th, 2007Which Feds?
The Feds who point the business end of the NarusInsight Intercept Suite at our heads didn’t go to court. Since that program doesn’t officially exist, why would They go to court? So, no, those Feds weren’t in court, requesting sensitive information from Amazon, because those Feds already have it.
This story is a real mind f*cker because part of the U.S. Government obviously has the data already, but the Justice Department is going through the dog and pony show with the subpoena process. What happens? Hundreds of news articles are written about how peoples’ privacy was maintained by the valiant judge who rejected the government’s request for Amazon’s customer records.
Never mind the secret rooms in the carriers’ data centers. NSA employees on site. Purpose built supercomputers and networking gear for mass surveillance… The sworn testimony of AT&T employee Mark Klein, who helped install the equipment for NSA intercept operations. Just believe that the Justice Department’s request for your personal information was was rejected by the judge.
Ah, there, there. Feel better now?
Via: Cnet:
Federal prosecutors tried unsuccessfully to force Amazon.com to identify thousands of innocent customers who bought books online, then abandoned the idea after a judge rebuked them.
In an order that was sealed but has now become public, U.S. District Judge Stephen Crocker rejected the Justice Department’s subpoena for details on Amazon’s customers and their purchasing habits. Prosecutors had claimed the details would help them prove their case against a former Madison, Wisc., city official charged with tax evasion related to selling used books through Amazon.
“The subpoena is troubling because it permits the government to peek into the reading habits of specific individuals without their prior knowledge or permission,” Crocker wrote in June. Amazon filed the lawsuit to quash the grand jury subpoena.
The case is reminiscent of last year’s attempts by federal prosecutors to wrest sensitive search-related information from Google through a subpoena. A California judge eventually rejected the request for users’ search queries (and allowed only an excerpt from Google’s index of Web sites).
In both cases, the judges worried about public perception. California’s Judge James Ware was concerned about the “perception by the public” that Google search terms are “subject to government scrutiny.” In the Amazon case, Judge Crocker predicted that “rumors of an Orwellian federal criminal investigation into the reading habits of Amazon’s customers could frighten countless potential customers into canceling planned online book purchases, now and perhaps forever.”
Google: The Cornerstone of Clean, Green Fascism
November 28th, 2007So few people can see the big picture with regard to clean, green fascism. I’m going to make it painfully clear and simple with the juxtaposition of two of today’s stories about Google.
Story #1) Google Hopes to Undercut Coal with Cheap, Renewable Energy:
By now, everyone is familiar with Google’s corporate motto, “Don’t be evil.” In an effort to spread that message of not-being-evil, the search engine behemoth has announced a plan to develop sources of renewable energy that will be cheaper than coal. The new initiative, RE
Story #2) Google Terminates YouTube Account of Egyptian Anti-Torture Activist:
The video-sharing Web site YouTube has suspended the account of a prominent Egyptian anti-torture activist who posted videos of what he said was brutal behaviour by some Egyptian policemen, the activist said.
Wael Abbas said close to 100 images he had sent to YouTube were no longer accessible, including clips depicting purported police brutality, voting irregularities and anti-government demonstrations. YouTube, owned by search engine giant Google Inc
, did not respond to a written request for comment. A message on Abbas’s YouTube user page, http://youtube.com/user/waelabbas, read: “This account is suspended.” “They closed it (the account) and they sent me an e-mail saying that it will be suspended because there were lots of complaints about the content, especially the content of torture,” Abbas told Reuters in a telephone interview. Abbas, who won an international journalism award for his work this year, said that of the images he had posted to YouTube, 12 or 13 depicted violence in Egyptian police stations.
Abbas was a key player last year in distributing a clip of an Egyptian bus driver, his hands bound, being sodomised with a stick by a police officer — imagery that sparked an uproar in a country where rights groups say torture is commonplace.
That tape prompted an investigation that led to a rare conviction of two policemen, who were sentenced to three years in prison for torture. Egypt says it opposes torture and prosecutes police against whom it has evidence of misconduct.
I know. The allure of the touchy feely techno utopia is profound. You want to believe that the benevolent geeks are going to save us all. They’re not benevolent, and the only thing that they’re interested in saving is what’s left of the planet’s strategic resources for themselves.
Much More: Clean, Green Fascism
Man Arrested for Shooting Traffic Camera
November 28th, 2007Taking out tens of thousands of dollars worth of police state revenue collection equipment with a dollar’s worth of ammunition? Some would call it asymmetric warfare. Others would call it priceless. It will be interesting to see how this case winds up. If the state makes any link between the crime and politics, it will be prosecuted as terrorism. You know, like Jeff Luers, who’s doing more time for burning some SUVs than he would do if he had murdered someone.
I doubt that this kind of thing will catch on in the U.S., but check out the absurd lengths to which the fascists in the UK are willing to go to to protect the cameras. Yes. Security cameras to watch the speed cameras.
UPDATE: In UK, It’s War on the Cameras (Thanks, Jason.)
Via: AP:
Police have lost red-light cameras to traffic accidents but never to gun play. “This is the first one that’s been shot,” Capt. Gordon Catlett said of the wounded camera at the intersection of Broadway Avenue and Interstate 640 — one of 15 camera-equipped intersections in the city.
Clifford E. Clark, 47, was charged with felony vandalism and reckless endangerment for allegedly firing at least three rounds from a .30-06 hunting rifle at the camera, knocking it out of action.
He was arrested after patrol officers heard shots around 2 a.m. Sunday, spotted a minivan leaving the parking lot of a closed business and pulled it over. Inside they found Clark and the high-powered rifle.
Clark, now facing a $50 fine if convicted and loss of his rifle, refused to say anything about the incident to police, leaving the motive unclear.
Catlett, who oversees the red-light camera program, said 6,798 drivers have been photographed running the red light at Broadway and I-640 and ticketed since the camera was installed in 2006. Clark was not one of them, he said.
Portfolio Ideas
November 28th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Several readers are panicking and emailing me messages that go something like: “How can I protect my assets? I’ll pay you to devise a plan for me.”
Guys, I’m not a financial adviser. Financial advisory services are government regulated, like real estate sales and health care. It’s not that I wouldn’t like to accept your offers, or that I doubt my skills in this area, but it’s just not allowed.
I have been posting the best information I have on Cryptogon for you to consider on your own. The information is freely available to anyone. You are responsible for any decision to buy, sell or hold any financial instrument.
While I can’t give financial advice for a fee, I don’t see any problem with writing about what I am doing with our money. Maybe you will find the information useful, maybe not. None of this will come as a surprise to regular Cryptogon readers.
I encourage you to seek the help of a licensed professional. If what I have written below resonates with you, show it to your adviser. Personally, I would hope that he or she would think that this is nuts. If a licensed financial adviser thinks that this is a good plan, I should probably go back to the drawing board.
Although I don’t have as much to try to hold on to as some of you, we’re all being forced to eat soup with a knife. It’s not easy, and it’s definitely not pretty.
Let’s state some assumptions about what follows:
1) These portfolio ideas assume that you already have your shelter, water, food and security/community issues sorted out. If you haven’t made arrangements along those lines, please stop reading and work on those issues first. Regardless of the number of digits associates with your bank balance, if you don’t have those essentials squared away, you haven’t got much, in my opinion.
2) This post will discuss some confetti paper based investments. There are a few Cryptogon readers who are all in on gold. Practically no diversification. Physical gold only. Those bets have paid off stunningly well, recently. Personally, though, I never go all in on any one investment, asset class, currency, or anything. Diversification is good, especially when gross manipulation is evident in a market, as is the case with gold.
3) I don’t want to touch off another debate about personal physical possession of gold vs. professional services and vaulting. Enough already. For purposes of this post, I’m assuming that you are content to let professionals manage security for the bulk of your precious metal holdings. Hint: Most people who think that they are in a position to safeguard tens or hundreds of thousands of dollars worth of physical gold are flat out shitting themselves. Regardless of what the hard core personal-physical-possession crowd thinks about these issues, there are a lot of concerned people who don’t quite share that bunker mentality, rightly, or wrongly. So, this is not a post about stockpiling food, ammunition and booze, etc. (even though those are good ideas). Survival Blog is the best site, by far, for deep preparation information.
4) On time horizons: I’m assuming serious risks to global financial markets, near term, but an overall slow, grinding collapse/crisis of opportunity, which we are already in. This assumption has heavily influenced my choices. Event risk precludes the traditional “buy-and-hold major stock index” type strategies for me. If you are more optimistic, you’ll want to hold more individual stocks and stock index vehicles. Personally, though, I view portfolios that are heavily weighted in stocks and bonds as wreckless, risk of ruin gambles. If you are more pessimistic than me—and many of you are—you’ll want to hold even less of your portfolio in ETFs and more in cash, precious metals, guns, ammo, long term food storage, etc.
5) These ideas do not assume a portfolio size. You can implement the following strategy with a thousand dollars, or a million dollars. TradeKing is excellent. I execute all of my stock, ETF and option trades through TradeKing. I liked their service so much, I became an affiliate.
So, knowing that most of our wealth has been spent on our small farm and eliminating all of our debt, here’s how we’re holding on to what’s left over:
Cash: 65%
There’s a lot of shrill doom talk about fiat currencies collapsing (I’ve personally referred to them as ponzi scheme currencies on Cryptogon many times). The reality is that some number of currencies will collapse, while some number of them will increase in value (relative to their peers). Which ones will collapse, and which ones will increase in value? I don’t know. So, I go with a basket of them.
New Zealand Dollar: Happens to be our home currency, and a high yielding one as well.
Swiss Franc: Standard bunker currency. (But no longer backed by gold, as some people mistakenly believe.)
Canadian Dollar: In a word: Commodities. (Also consider Aussie Dollar and South African Rand. Check out Everbank’s Multi-Currency CD for currencies that are strongly tied to the prices of commodities.)
Euro: This is the global reserve currency, and everyone knows it—well, except for some Americans. See Making Sense Of The Euro/Swiss Franc Relationship for more on staying flat with EUR/USD/CHF.
U.S. Dollar: I hold VERY little USD, but I get USD exposure via the ETFs mentioned below. Since I’m a big advocate of diversification, I should probably add more USD, but I just can’t seem to convince myself to do that right now. YOU NEVER KNOW. The dollar could rally sharply; somehow, I don’t know how. But you never know.
A quick word on the Icelandic Krona: This one provides the highest yield on cash, by far (about 12%). I don’t hold any, but if you’re looking for more risk/more reward, the Icelandic Krona might be worth checking out.
Here are a couple of ways to diversify into foreign currencies:
Rydex Currency Shares ETF Products NOTE: For amounts greater than USD$10,000 on some currencies, consider using a Forex account to drastically reduce your costs. Make sure you read about your FX dealer’s “positive roll” policy, as this is how you will earn your interest. For our purposes, you would NOT be using leverage on these trades. (You could, of course, if you wanted to.) Many FX dealers will allow you to adjust your leverage to 1:1. You will have to use either mini lot (10,000 units) or standard lot (100,000 units) sizes. Obviously, I don’t have anything like these amounts of money to move into single currency pairs, so I use the ETFs instead. Here is a general criticism of the foreign currency ETFs re: the fees associated with them. The more money you need to diversify, the more important this issue will be to you.]
Everbank World Currency CDs Foreign currency CDs with accounts that are FDIC insured up to $100,000. Of course, you could make an investment decision that loses money, but at least FDIC applies to the account itself.
The Merk Hard Currency Fund: An outstanding option for diversification away from the dollar. The fund holds a basket of currencies, sovereign debt and gold. See: Fund Facts. Expenses: 1.3%. (Thanks to Eileen for the tip on Merk Hard Currency Fund.)
Gold: 20%
We hold our gold with BullionVault. I was so pleased with BullionVault that I became an affiliate. Totally satisfied. End of story.
Gold ownership and professional vaulting, however, isn’t for everyone (although it should be, in my opinion). While BullionVault offers an inexpensive method of owning and vaulting your gold, it isn’t a good option for people who are simply looking for exposure to the price fluctuations of precious metals. While I personally wouldn’t use investments that track the prices of precious metals, if you’re looking for an easy to trade, non leveraged vehicle (as opposed to gold futures contracts, which are for seasoned pros only), streetTRACKS Gold Shares ETF (GLD) is a good way to go. If you want exposure to gold and silver together, consider Central Fund of Canada. (Thanks to Eileen for the tip on Central Fund of Canada.)
I view the gold component of the portfolio as a strategic hedge to my fiat, ponzi scheme, confetti currency bets. For that reason, I believe that ownership of the actual metal is important. My gold is stored in a Viamat vault in Zurrich, Switzerland (the service provided through BullionVault). I sleep very well at night knowing that. But, if you simply want exposure to the price fluctuations, without the added level of security that comes with ownership, the ETFs are a much more cost efficient way of going.
Please understand the difference between metal that you own in a Swiss vault, and a bet on a piece of paper that tracks the price of the metal. As long as you’re clear on that difference, you’ll be able to decide for yourself how to proceed.
Narrowly Targeted ETFs: 15%
Food, water and energy… The focus of hundreds of stories on Cryptogon, served as my guidance here. I use the ETFs to spread risk far and wide.
Food:
PowerShares DB Agriculture Fund (DBA) NOTE: I am slightly overweight this one. If you look at the ongoing crises involved with food production, you see not just a perfect storm, but multiple perfect storms.
Water:
PowerShares Water Resources Portfolio (PHO)
Claymore S&P Global Water ETF (CGW)
Energy:
Energy Select Sector SPDR Fund (XLE) NOTE: Clip a clothespin on your nose for this one. I also have an individual pick on one of the major oil companies for long term hold. It will be the angriest stock recommendation you’ve probably ever read. I’ll post that soon.
First Trust NASDAQ Clean Edge U.S. Liquid Series Index Fund (QCLN)
PowerShares Global Clean Energy Portfolio (PBD)
These funds cover A LOT of the collapsitalism spectrum. Assuming we don’t go to an overall Mad Max system, these areas will probably do very well in a slow crash. I have made a point of mixing exposure between U.S. and non-U.S. companies. If you have been reading Cryptogon for any length of time, the logic behind my choices will be very clear.
One Final Category: Stock Options Lotto for Specific Tactical Situations
Segments of the economy could be about to experience extreme trauma. It might be worth risking very small amounts of capital on very high risk/high reward bets. While these plays are very risky on the one hand, on the other hand, the potential profits are large, and the amount of money at risk is limited to the cost of the premium paid for the option. Whenever I play options, I assume a 90% chance of losing my premium. But, there are rare times when the potential for disorderly moves increases dramatically. I feel as though the financial sector is in one of those periods right now. If I’m wrong, oh well, I’m out a few bucks. (No really, it’s just a few bucks.) Deep out of the money strikes are cheap for a reason. There’s very little chance of them being in the money by expiration. But that’s why I call it the Stock Options Lotto. If I’m right, it’ll be more juice to squirt into the main portfolio, barn, solar hot water system, etc. etc.
Conclusion
To sum it all up:
Many eggs. Many baskets. Many countries. Many currencies. Many sectors. Many types of assets. Put your money where your knowledge is, but realize that precision is practically impossible. For the most part, resist investing in individual stocks. Using the stock and commodity ETFs is like horse shoes and hand grenades. Close should be good enough.
CHINA FUEL SHORTAGES
November 27th, 2007Via: The Australian:
CHINA is running out of fuel. Police are guarding petrol stations in several inland provinces to prevent fights, as shortages of petrol and diesel are causing huge queues of trucks, buses and cars.
In Kunming, capital of the southwestern province of Yunnan, 1000 trucks are stranded.
A truck driver named Li told the Chuncheng Evening News he had been stranded at the Stone Tiger Gate petrol station for three days after searching for fuel in other places, but failing. He said his delivery date was way overdue.
Another driver, at Geiju city, said a job that would have taken one day in the past, now took three: one on the road, two queuing for fuel.
Nine days ago, a truck driver was reported to have been stabbed to death in central Anhui province after a row about queuing.
A few days earlier, at Ezhou in Hubei province, 100,000 people were stranded, unable to get to work, because city buses had run out of fuel.
Beijing has been insulated from the headache, and the wealthy coastal provinces are mostly better stocked, because the refineries are nearby.
The problem would intensify as winter approached, and was starting to affect exports, warned the Commerce Ministry, since diesel was crucial for shifting products to ports.
The system is suffering from pressure of demand to sustain its economic growth at the current 11.5per cent – with China now the second-biggest consumer of oil after the US.
Diesel imports rose 46.5per cent in the first nine months of the year, compared with the same period last year.
HSBC Finds $35 Billion to Bail Out Investment Outfits Caught by U.S. Mortgage Fallout
November 27th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
“The other one I like short is HSBC. Just look how far above zero it is… Flying so high in the 80s.”
Cryptogon November 14 vs. Goldman Sachs November 27. Hmm. I’m going to have to get an expensive suit and a pinky ring to update Cryptogon. The current arrangement of boxer shorts and baby-spitup-covered T-shirt doesn’t maintain the right appearance for all this high powered financial analysis.
* chuckle *
Via: Guardian:
Some analysts believe there is worse to come for HSBC, particularly from its US home loans business Household. The bank has already set aside $4bn in provisions against its sub-prime mortgage business in the last year, but Roy Ramos, of Goldman Sachs in Hong Kong, believes a further $12bn in losses is likely to be incurred.
Downgrading HSBC to a sell rating, he said: “We point out that 13% of Household’s sub-prime loan book was in negative equity as of June, with another 43% with a current loan to value ratio of 90-100%. This implies that a full 56% of Household’s sub-prime loan book may be in negative equity if the US property prices fall by 10% across the board – our US economists expect an average 14% fall in residential property prices through 2008.”
Research Credit: Tochigi
U.S. Mortgage Crisis Slams Property Values, State Tax Receipts
November 27th, 2007Via: Bloomberg:
The worst U.S. housing recession in 16 years will drive down property values by $1.2 trillion next year and slash tax revenue by more than $6.6 billion, according to a report by the U.S. Conference of Mayors.
California, the hardest-hit state, will suffer a $630.6 billion decrease in property values that will cut property tax revenue to local governments by almost $3 billion, the study found. The New York City region will see the greatest slowdown in the output of goods and services because of the mortgage crisis, according to the report.
The U.S. residential real estate market is faltering as rising foreclosures among subprime borrowers have pushed down prices and led to a record supply of unsold homes. Foreclosures among homeowners with subprime adjustable-rate mortgages have reached a five-year high.
“The real estate crisis of 2007 and 2008 will go down in the record books,” according to the report, released as the Conference of Mayors gathers in Detroit today for a special meeting to discuss the housing slump. “The wave of foreclosures that has rippled across the U.S. has already battered some of our largest financial institutions, created ghost towns of once vibrant neighborhoods — and it’s not over yet.”
Abu Dhabi Buys Citigroup Some Time
November 27th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
HAHAHA Priceless!
Instead of Helicopter Ben on the banner, I need some guys on magic carpets, flinging cash over lower Manhattan.
Anyone thinking about playing the put options lotto on some of the most screwed financials this morning? Deep out of the money December put options on Citigroup (C), JP Morgan (JPM), and HSBC (HBC). And/or puts on the Financial Select Sector SPDR Fund (XLF) will do the trick.
Remember, it’s the put options lotto. Gamble responsibly.
Via: Bloomberg:
Citigroup Inc., the biggest U.S. bank by assets, will receive a $7.5 billion cash infusion from Abu Dhabi to replenish capital after record mortgage losses wiped out almost half its market value.
Citigroup rose 3.7 percent in early trading today following acting Chief Executive Officer Win Bischoff’s statement late yesterday that funds from the state-owned Abu Dhabi Investment Authority will help “strengthen our capital base.”
Abu Dhabi will buy securities that convert to stock and yield 11 percent a year, almost double the interest Citigroup offers bond investors, underscoring the New York-based company’s need for cash. Fourth-quarter profit will be reduced by as much as $7 billion because of losses from subprime mortgages, which led to the departure of CEO Charles O. “Chuck” Prince III and a 46 percent slump in its stock this year.
“Clearly, Citi has a problem with capital adequacy after the subprime crisis,” said Giyas Gokkent, head of research at National Bank of Abu Dhabi PJSC, Abu Dhabi’s biggest bank by market value. “ADIA has seen an opportunity to get cheaply into a blue-chip stock.”
With the purchase of a 4.9 percent stake, Abu Dhabi, the largest emirate in the United Arab Emirates and its capital, would rank as Citigroup’s largest shareholder ahead of Los Angeles-based Capital Group Cos. and Saudi billionaire Prince Alwaleed bin Talal, data compiled by Bloomberg show.
College Requires Students to Carry GPS Enabled ‘School Phone’
November 27th, 2007Does the College of Knowledge issue dribble bibs to these twits to prevent accidents during lectures? You know, show up to How to Be a Good Slave 101 and Advanced Don’t-Taze-Me-Bro Strategies 400 with your xTreme dribble bib and your hip sKo0lEd phone.
Via: CBS News:
College students at Montclair State University are all talking about a new requirement that will require students to have a cell phone.
CBS 2 HD has learned more on this required feature that is forcing students to dig into their wallets.
At Montclair State, there is no excuse for being out of touch.
“‘School Phone’ I use for campus e-mail, different things like that,” freshman Angela Vuocolo said.
That’s right.
First-year student Vuocolo said ‘School Phone’ — as in a Sprint-operated cell phone — is now mandatory for all students. It’s the first program of its kind in the country.
The cost: $420 a year for a base plan which is bundled into the tuition bill.
It includes just 50 peak voice minutes a month, but unlimited text messaging to any carrier, unlimited campus-based data usage, and student activated emergency GPS tracking.
“What it does is allow students to have an extra pair or group of people watching over them when they’re going from one location to another,” Montclair Police Department Chief Paul Cell said.
Related: Mobile Phone Companies Provide Real Time Tracking Information to Feds; Probable Cause Optional
Related: AT&T Invents Programming Language for Mass Surveillance
Related: Introducing iPanopticon for Students
Hedge Fund that Shorted Subprime Assets Up Over 1000% this Year; Fund’s Manager Tells Clients, “Our Entire Banking System is a Complete Disaster” and Use Profits to Buy Gold
November 26th, 2007Lots of people have an opinion on gold. But how many of them are running funds that are up over 1000% for the year? Just one.
Via: Financial Times:
A Californian hedge fund has made more than 1,000 per cent return this year by betting against US subprime home loans, making it one of the world’s best-performing funds of all time.
Lahde Capital, set up in Santa Monica last year by Andrew Lahde, last week passed the 1,000 per cent mark, after fees, following the latest leg of the credit market turmoil. The fall in the value of subprime-linked securities has boosted a group of funds which spotted the problems in advance.
The decision to use derivatives to short, or bet against, low-quality US home loans taken by a select group of hedge funds last year appears to have become the most profitable single trade of all time, making well over $20bn in total so far this year. John Paulson’s New York-based Paulson & Co, the biggest of the group with $28bn under management, is said by investors to have made $12bn profit from the trade already.
However, Mr Lahde, whose fund is one of the smallest specialists shorting subprime, has now begun to return money to investors, telling them in a letter: “The risk/return characteristics are far less attractive than in the past.â€
In his letter, Mr Lahde said he expected the collapse in value of subprime mortgage-linked securities to be repeated for bonds backed by commercial property loans in a deep recession – which he also predicts.
“Our entire banking system is a complete disaster,†he wrote. “In my opinion, nearly every major bank would be insolvent if they marked their assets to market.†He also said he would be putting some of his own profits into gold and other precious metals.
Mr Lahde has used the phenomenal returns to boost his business, launching a fund to bet against commercial real estate this autumn – which made 42 per cent in its first two months – and is in the process of creating a third fund to short credits with a broader mandate.
Lahde’s first fund, US Residential Real Estate Hedge V Class A, soared 712.8 per cent in the year to the end of October, before this month’s sell-off pushed it past the 1,000 per cent mark.
There is no reliable data on how many other funds have made 1,000 per cent, or ten times the investment, in a year. But RAB Capital, London hedge fund manager, shot to prominence in 2003 when it returned 1,475.5 per cent in its Special Situations fund, which now runs $2.4bn and is the biggest shareholder in troubled bank Northern Rock.
Bigger subprime top performers include Paulson’s Credit Opportunities fund, up 550.8 per cent to the end of October, and the Subprime Credit Strategies fund run jointly by Texas-based Hayman Capital and Corriente Advisors, up 526.5 per cent.
