Tag Archives: DARPA

When inability drives fear

It is a dangerous place to be in. We all have been there and in most cases it is as innocent as it could ever be. You see, sometimes life throws you a curveball. Gamers tend to identify it most easily. In my particular case it was a game called Magic Carpet. It was a Bullfrog game and I was testing it on the PC. It played magnificently there, and soon thereafter I also tested it on the very first PlayStation. There, because of the controller it was good, but not great. Still, it was fun to play and I tended (in those early years) to really get into a game, so when the situation blew into my face, I got a little frustrated. The next two times were worse and the last time (on that day) I went slightly angry (with myself) and I kicked the door. The issue was not the door, it was my steel tipped boot and I went straight through the door, so, I was not merely ticked off, I had a hole in the door (which would require funds to repair) and the boss in Magic Carpet was still alive. We all have had these moments. Our car, our bike, the TV, things go wobbly on you and we sometimes react wrongly to this situation and in light of that get to reflect on our own ego’s a little.

These are the images going through me when I was confronted to new information when looking at the unrealistic response by America (and Australia) to Huawei. In the case of Australia it seemed the mere application of greed and fear as politicians cater to the greed of a large telecom company, which was not seemingly the case with America. Yet that tip was raised for me less than 24 hours ago. The article (at https://foreignpolicy.com/2018/08/15/botched-cia-communications-system-helped-blow-cover-chinese-agents-intelligence/), shows how the CIA got their own systems handed to them through ego and what I would regard as stupidity. The initial headline ‘The number of informants executed in the debacle is higher than initially thought‘ is rather unsettling. It gets to be worse with “The CIA had imported the system from its Middle East operations, where the online environment was considerably less hazardous, and apparently underestimated China’s ability to penetrate it. “The attitude was that we’ve got this, we’re untouchable,” said one of the officials who, like the others, declined to be named discussing sensitive information. The former official described the attitude of those in the agency who worked on China at the time as “invincible.” Other factors played a role as well, including China’s alleged recruitment of former CIA officer Jerry Chun Shing Lee around the same time.” This is the most dangerous of settings. The wrongful setting comes straight from Sun Tsu where we learn that all war is based on deception. China is not some place that is tinkering at the side of the road, the Art of War COMES FROM CHINA! It gets to be worse when you consider that that book was written long before Americans had adopted proper reading and writing skills, close to 1200 years before that, so that was their first error.

When we see: “But the penetration of the communication system seems to account for the speed and accuracy with which Chinese authorities moved against the CIA’s China-based assets. “You could tell the Chinese weren’t guessing. The Ministry of State Security [which handles both foreign intelligence and domestic security] were always pulling in the right people,” one of the officials said. “When things started going bad, they went bad fast.”“. The entire matter seems to be exponentially wrong. The big issue is not on how it was cracked, or even if it was cracked. My issue had been (for a much longer time now) that for too long, the deciding voices, all listening to some CTO, often with multiple sides lacking wisdom that the setting was not merely that there was ‘a security risk’, there was for the longer time a much larger security flaw. For much too long a time, we got the ‘slides of wisdom’ on how data in transit tends to be safe and data at rest tended to be in danger. Even when I started my CCNA, the amount of knowledge given in the Cisco books gave the rise to the consideration that data in transit is not merely as vulnerable, it was that a lot more could be done unnoticed (not merely by the Chinese mind you). It was some time before the Sony hack that I expected a setting where the routers themselves might be used against the owner, it went further when we consider Wired in 2013 (at https://www.wired.com/2013/09/nsa-router-hacking/). The headline is not merely ‘NSA laughs at pc’s, prefers hacking routers and switches‘. It is the setting where we see: ““No one updates their routers,” he says. “If you think people are bad about patching Windows and Linux (which they are) then they are … horrible about updating their networking gear because it is too critical, and usually they don’t have redundancy to be able to do it properly.” He also notes that routers don’t have security software that can help detect a breach“. This is where I was in 2011, when I started to comprehend the working of a router and router tables, I figured out that it is not the router they can see that is the problem; it is the one they cannot see. That idea came from a presentation by Thomas Akin, CISSP, Director, Southeast Cybercrime Institute who had a presentation for the Blackhat briefings. The 2002 presentation gave me the idea. You see apart from the lack of security, the +1 hop hack allows form something truly unique. Consider [.MIL Server], that server connects to <secure router 1> and things are set into motion. Now, we cannot direct all the traffic, yet materials from that location to let’s say ‘preferred consultant one‘ will go via certain paths, yet the first router after <secure router 1> tends to be merely one or two routers (depending on traffic) to that preferred consultant. It is easy to find a router that could optionally be a link to these routers and duplicate all packages that go to that specific next step. Not only is the task easily done, the path is not hindered, the router is not intervened with and a simple reset takes away whatever evidence existed in the first place. In addition, the additional part is that the compact flash in those routers is ‘The maximum storage capacity for the CF in Slot0 and Slot1 is 4GB‘, yet the only part here is that you only needed 32 MB, which is what most of us used then, but cards that small are no longer made, so most IT people just plug in what they have. You have well over 3GB of package storage, so all packages to that one location could be stored and redirected on the ‘off’ hours as not to leave any monitored spike. Until the CFlash card is ejected from the router and investigated no one will have a clue. That was 7 years ago and the systems are even more capable now, a 3GB glitch will not register on most systems, especially when those IT people do not block Spotify and/or YouTube. By the time they figured it out, the setting is already wiped, and this path can be adjusted on a daily bases so that most IT networkers never had a clue in the first place.

You think that I am alone in this, that I am this clever? No, I am not! There are plenty of IT Networkers running circles around me and that is now set into the stage of ‘we’re untouchable‘. The CIA was never that, they never needed to be touched, the opponent merely needed a clear line of sight to the router that is one skip from the secure router that they needed to get to. We see more in the Foreign Policy article with the quotes “Information about sources is so highly compartmentalized that Lee would not have known their identities. That fact and others reinforced the theory that China had managed to eavesdrop on the communications between agents and their CIA handlers” and “an encrypted digital program, allows for remote communication between an intelligence officer and a source, but it is also separated from the main communications system used with vetted sources, reducing the risk if an asset goes bad“. Now we merely add “But the CIA’s interim system contained a technical error: It connected back architecturally to the CIA’s main covert communications platform. When the compromise was suspected, the FBI and NSA both ran “penetration tests” to determine the security of the interim system. They found that cyber experts with access to the interim system could also access the broader covert communications system the agency was using to interact with its vetted sources, according to the former officials“. I believe it goes further than that. If we see the entire layer process and consider that in the end, certain systems merely replicate a process. Cisco (at https://www.cisco.com/c/en/us/support/docs/lan-switching/8021q/17056-741-4.html) gives us: “A device can determine which VLAN the traffic belongs to by its VLAN identifier. The VLAN identifier is a tag that is encapsulated with the data. ISL and 802.1Q are two types of encapsulation that are used to carry data from multiple VLANs over trunk links”, as well as “The DA field of the ISL packet is a 40-bit destination address. This address is a multicast address and is set at “0x01-00-0C-00-00” or “0x03-00-0c-00-00”. The first 40 bits of the DA field signal the receiver that the packet is in ISL format“, so as the destination was known, the people needing this could search very specifically. When we consider ‘It connected back architecturally to the CIA’s main covert communications platform‘, the connection back would enable those seeking to find the needed value of the DA field. That does not merely impede the CIA, it stands to reason that to some degree the NSA would be just as vulnerable.

The main course

In my case, I tend to go for the Bambi burger, ideally I watch Bambi whilst having that lovely slice of venison. You see when we get to “As part of China’s Great Firewall, internet traffic there is watched closely, and unusual patterns are flagged. Even in 2010, online anonymity of any kind was proving increasingly difficult. Once Chinese intelligence obtained access to the interim communications system,­ penetrating the main system would have been relatively straightforward, according to the former intelligence officials. The window between the two systems may have only been open for a few months before the gap was closed, but the Chinese broke in during this period of vulnerability“, I believe the setting is worse than that. These players still require their consultants. It does not matter whether you call them construction workers, members of Blackwater, Xe Services, or Academi. It is those places as well as Booz Allan Hamilton and other providers that still require to be informed, and that is where the interception could start. The setting is not ‘the Chinese broke in during this period of vulnerability‘, it is the long term flags that they were able to test at this point and that is the fear we see with their setting of Huawei and partners. Not that Huawei is the danger, but the fact that Chinese intelligence is just as able to get into nearly all systems, it merely can get into Chinese systems faster (for now). This is where it gets a little more complicated, because it is not about the now, it is about tomorrow and the tomorrows that are coming. The only ones who have a chance of getting things done are players like the Constellis Group and Palantir when they unite abilities. It is going to be about data and about the ability to forecast how traffic goes. Thomas Akin was teaching this wisdom 16 years ago. We see this when we are made to realise

  • Live system data is the most valuable.
  • Immediate shutdown destroys all of this data.
  • Investigators must recover live data for analysis.

And the loss is merely a reset away, in most cases if there is an automatic reset; the only data available is the last transgression at best. With the coming of 5G live real-time capturing data streams is what is more likely to set the stage of finding out what happened, in this the entire setting of ‘China’s Great Firewall‘, we are already looking at outdated Chinese technology and I do believe that those behind the article, as well as some DARPA people are aware of that. America and Europe are behind in ways that we cannot even perceive, because the players that need to move forward are doing so iteratively, that whilst the time of reengineering is now merely 10% of what the development time was. We see this with “Call this the IBM problem, which faced an existential threat as soon as Asian groups started churning out cheap PCs in the 1990s. But here IBM also provides a few tips to the future, with its pivot to software and solutions. By the time of IBM’s iconic “solutions for a small planet” ad campaign in 1996, the company was trumpeting voice recognition and ecommerce — producing the sort of digital enterprise backbone that ended up helping develop the internet economy” (source: Australian Financial Review). In the first instance the Asian market required 10-15 years to catch up, the second time around it took 2-3 years and now with Google and Apple working globally, it takes months. IBM (others too) took iterative steps to maximise the economic footprint, instead of truly leaping forward whenever possible, they lost the advantage and are now trailing the markets. Huawei is one clear example where the American market was surpassed. Samsung showed its supremacy by having 5G home routers ahead of everyone else and the advantage in Asia is only growing. It is seen with “Alternatively, authorities might have identified the system through a pattern analysis of suspicious online activities. China was so determined to crack the system that it had set up a special task force composed of members of the Ministry of State Security and the Chinese military’s signals directorate (roughly equivalent to the NSA), one former official said“. I do not read this part in the same way. I believe that with ‘set up a special task force composed of members of the Ministry of State Security‘, was not about cracking. I personally believe that the Cisco books were so illuminating that they decided to change the setting in their own game. I believe that the Chinese now have a more advanced system. They have done what players like Cisco should have done before 2014 and they did not. I believe that when we see a partnership between Constellis and Palantir, their findings will bear that out with in addition an optional link that shows part of the accusation that China let Russia in on certain findings (and the Russian evolution of certain networking devices). This and the next part is largely speculative, but it is supported to some extent. We see this in: “Once one person was identified as a CIA asset, Chinese intelligence could then track the agent’s meetings with handlers and unravel the entire network. (Some CIA assets whose identities became known to the Ministry of State Security were not active users of the communications system, the sources said.)“. I believe that he part given in ‘not active users of the communications system‘ gives us the third part. I believe that the system was not merely invaded. There is every chance that certain systems when activated also leave tags behind and that is where the intrusion would have paid off. You see, in the Cisco setting (as an example), the data frame has an optional 60 bytes of extension headers, yet is that always empty? More important, when were these data packages truly thoroughly checked? In this speculative setting I take you to the movie Die Hard 2. In that movie we see on how someone decided to get clever and uses the outer marker beacon to warn the planes that were in danger. The beacon can be used in other ways than merely give a beep. I believe that Cisco data packages have other optional parts than can be ‘reused’ to do something different, like the optional headers. They are to most merely empty pre-set ‘spaces’, but they could have more. That is the setting that America faces and the fact that they could get overwhelmed by Chinese intelligence because they did not rely on iterative parts. Huawei had been leaping forward, for example now offering a 128GB Android 8.1 phone (the Huawei nova 3i 128GB Handset), for 50% less than its competitors. A system that is just as advanced as anything Apple and Samsung offer; at merely half the price whilst Chinese Intelligence has been digging into that device for months, unlike the NSA that needs to queue up with all the other users to get to look at the Pixel 3 and the iPhone 8 on launch day. That is the setting we seem to be seeing and America is indeed and rightfully worried, not because Huawei has backdoors (which I never really believed) but because the players here had been held backwards through iterative technology. Apple is actually staged by Forbes that way with the quote ‘a minor point update for the iOS 11.1 iteration‘, even Forbes speaks about iterative changes. That is the setting that they are up against and they have been surpassed for years and with Huawei leading the 5G stage on a global setting the US authorities are merely getting more and more afraid that not only are they no longer the leading players, they are now sidelined by not being able to keep up with what will be presented ‘tomorrow’.

That part can be supported through the CIA with analyses reports (at https://www.cia.gov/library/center-for-the-study-of-intelligence/csi-publications/csi-studies/studies/vol49no3/html_files/Collection_Analysis_Iraq_5.htm), in here we see that Richard Kerr, Thomas Wolfe, Rebecca Donegan, and Aris Pappas give us (in a different context): “The analysis on this issue by the Intelligence Community clearly was wide of the mark. That analysis relied heavily on old information acquired largely before late 1998 and was strongly influenced by untested, long-held assumptions. Moreover, the analytic judgments rested almost solely on technical analysis, which has a natural tendency to put bits and pieces together as evidence of coherent programs and to equate programs to capabilities. As a result the analysis, although understandable and explainable, arrived at conclusions that were seriously flawed, misleading, and even wrong“. It is important to realise that this was on the WMD setting, so in a different context and on a different setting. Yet the information systems were all designed to upholster that flaw to an ‘evolved’ placement, the systems in their entirety are nowhere near ready, now even for the previous setting. The movement from a lot of staff to more fruitful consultant settings is now paying off in a negative way for the CIA (and the NSA too). This is where it gets interesting. You see, the previous setting that I gave should partially have been dealt with through the flashlight program that DARPA has. Raytheon BBN is working on that with Professor Richard Guidorizzi from George Mason University Fairfax. I think that the system is not entirely ready here, not if the packages can be duplicated via the router and as long as the original is not touched, that system will not get the alert lights ringing.

To get you on board on how far all the NATO partners are behind, let me give you two settings. The first is a DARPA Project called ‘Probabilistic Programming for Advancing Machine Learning (PPAML)‘, the man in charge is Dr. Suresh Jagannathan, yet the bigger brain might be MIT graduate Dr. Jennifer Roberts. The given setting is “Probabilistic programming is a new programming paradigm for managing uncertain information. Using probabilistic programming languages, PPAML seeks to greatly increase the number of people who can successfully build machine learning applications and make machine learning experts radically more effective“, whilst we also see the goods in the DARPA article by Dr Roberts with “If successful, PPAML could help revolutionize machine learning capabilities in fields from Intelligence, Surveillance and Reconnaissance (ISR) and Natural Language Processing (NLP) to predictive analytics and cybersecurity“, this is certainly leaping forward, but it is still based on a system. I believe that the Chinese decided to turn the funnel upside down. To illustrate this I need to get you to an app called Inke. The article (at https://thenextweb.com/contributors/2018/02/09/hidden-world-chinese-livestreaming-app-inke/), gives us ‘The hidden world of Chinese livestreaming app Inke‘, this is not a few people; this is a craze that has already infected millions upon millions. So with “he was actually doing a livestream, an extremely popular hobby for young people in China. China is way ahead of the rest of the world when it comes to embracing livestreams.” you are missing out and missing out by a lot. These streams are real-time and often geo-tagged. I believe that the Chinese have changed the setting, they are optionally collecting Terabytes of daily data and they are converting that to actionable intelligence. Facial recognitions in phones, geo-tagged and all uploaded and streamed, all converted on the spot, like the SETI screensaver, millions of affordable mobiles (this is where the Huawei nova 3i 128GB Handset and all other new handsets come in), parsing all that data into uploaded files and Chinese intelligence gets global information close to real time, whilst their learning machines are about efficiencies of collected data, it is not about the better application by making them more effective, it is about the massive amounts of data offered to get the systems to upgrade the efficiency of parsing data, because parsing data is where the bottleneck will be in 5G and they already have a larger advantage.

In the meantime, on any given day thousands of Inke users are filming life around them in malls and famous places looking awesome doing it. Yet, if you look at the CCTV settings, how many users would have passed 935 Pennsylvania Avenue, Washington DC, or at London SE1 9EL, UK walking towards London Bridge? How many people were merely assuming that they were tourists face timing with mom and dad? Are you getting that picture now? and also realise that Inke is merely one of more than 300 live streaming companies, all capturing that data all those tags that a smartphone allows it to capture and at the top of all this, Facebook and YouTube are eagerly pushing people to gain following by doing just that. So how long until the user realises that uploading the same stream to 2-3 providers gets them to gain a lot more following and optionally cash? Yes, the intelligence community is that far behind at present. So when we are worrying on “The system was not designed to withstand the scrutiny of a place like China, where the CIA faced a highly sophisticated intelligence service and a completely different online environment“, we need to consider that China is already ahead of the game and the CIA systems might be merely an option to scrutinise their own data, because that remains the Chinese bottleneck, the data will require verification and that is the one field where their opposition could gain the advantage if they set their minds to a different algorithm, one on reliability, not on likelihood. It is a setting where all the players involved have a second tier of consideration. They embrace a ‘not now, but soon‘ thought, when ‘I needed this yesterday‘ is the proper setting as I personally see it, because data without proper vetting is merely used space on any given storage device.

That final part can be considered when we look at the linked article that NBC had from last January. There we see: “When agents searched Lee’s hotel rooms in 2012, they found notebooks with the names of covert CIA sources, according to court documents. But not all of the agent arrests and deaths could be linked to information possessed by Lee, who left the CIA in 2007“, an issue I mentioned in an earlier blog. We get there when we consider his actions and ‘found notebooks with the names of covert CIA sources‘, do you think that anyone, especially in this setting would be that stupid? It’s like keeping the condom as a trophy after having intercourse, its useless and stupid. I believe that either it is not the ‘covcom’ system, or not merely the ‘covcom’ system. I believe that (if it is all correct) that Chinese intelligence got in further and deeper into acquiring the data required and the notebook is the proverbial red herring in all this, especially as Jerry Chun Shing Lee left the CIA in 2007. You do not hold on to that level of information 11 years after you might have had some level of valid reasons to have it in the first place. That is the part many overlooked, or looked away from.

In the end, I do believe that it is not merely the inability that drove the anti-Huawei waves, it is the fact that those decision makers have no idea where to navigate towards next is what drives their fears almost exponentially.

 

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On the ropes again

It isn’t often that I see a corporation setting themselves up for a fall, to do so twice in a short time span is almost staggering, but would you know it, Microsoft pulled it off!

Now, we need to consider the setting in the right light. They want to capture part of the Apple market and that is a valid jump, yet they are doing it whilst the Apple is sitting there with hundreds of thousands of apps, a setting that almost smoothly sets you up for your music, your photos, your face time and your data. I still have the very first 64GB iPad. It has been running 24:7 for close to 7 years. Only now, only this year did I get the first issue with my 1st generation iPad. This is the situation that Microsoft is facing up and guess what! They still fumble the ball. So the equivalent of the 128GB iPad (the new one) is $100 more expensive than the Apple edition. In addition, the Surface Go does not offer Cell next to the WiFi, which Apple does, making it more ‘on-the-go’ than the Microsoft version is.

The fact that they still screw around with 64 Gb in this day and age, whilst most consider 128 GB now a minimum for anything larger than a mobile phone was the first fumble. It goes beyond that and the editorial of NewWin gives the best voice in all this, they tell you ‘Microsoft’s Surface Go is not the tablet that can replace your tablet‘, no way is there an option for me to phrase it better. They do one better with “But the Surface Go doesn’t make sense as a tablet, because Microsoft hasn’t invested in building a decent Windows 10 tablet experience, and this goes beyond apps“, that in a setting where we need to look deeper at what Apple offers, the numbers that were released in LifeWire gives us that as per March 2018 2,100,000 apps have been released, as per March 2016 – 1,000,000 iPad apps have been released. This discrepancy is mainly as the separation between iPad and iPhone apps went away, the iPhone became larger and as such we can run most apps on both, in addition, as apps designer focused on iPhone apps, as they would work on both is pretty much the other reason. You can read more on these numbers (at https://www.lifewire.com/how-many-apps-in-app-store-2000252). That is the setting Microsoft was up against and whilst they mess around with a 64 GB and larger, the mere setting to just accept that 128 GB is the minimum norm would have been a clever step, the mere consumer difference is $70, that whilst Microsoft will always have a much better price, that is the given and the consumer feels cheated! It is even clearer when we look at the PC World views (at https://www.pcworld.com/article/3288206/tablet-pc/microsofts-399-10-inch-surface-go-rethinks-the-windows-tablet-for-consumers.html). As we focus on “Microsoft designed the Surface Go for people in motion: the sales exec who makes a quick edit or two to a presentation while at her daughter’s soccer practice, for example. A Wi-Fi-only model will ship first, followed an LTE model later in 2018“, yet when we consider ‘the sales exec who makes a quick edit or two to a presentation‘, whilst ‘at her daughter’s soccer practice‘, considering that she is in a place with flaky Wi-Fi and optionally out there with no Wi-Fi makes the absence of a cellular option even more confusing. Not unlike the Xbox One fiasco, it seems that Microsoft does not comprehend their customers, plain and simple. Instead of learning from Google and just hand everyone a 128 GB model even with merely 6GB would have made all the difference but the people setting the stage do not comprehend that rationing the gravy or ketchup merely gives the visitor most likely merely a dry meal, and today the people realise the power of storage, they see it every day, to just take storage doubt off the board they could create trust, Microsoft decided not to do this.

NeoWin gives even more (at https://www.neowin.net/news/microsofts-surface-go-is-not-the-tablet-that-can-replace-your-tablet) and with “Users have complained about missing features like multi-selection of tiles for improved app organisation, folder naming, requested a more touch capable File Explorer and more” they are showing us that they are before the moment that Apple surpassed at least two generations earlier in their devices. This is a level of non-vision that you expect from sophomore students, not in a Fortune 500 company, and I reckon it will all be to push them into the Azure cloud, because that is what brand X requires. I am actually puzzled how Microsoft is not losing market share in a much faster rate. Apple and Google are surpassing IBM and Microsoft at a better and faster stage than ever before, from what I can tell it is done by looking at the population that fits the board of directors, not in the setting that actually represents the population. A view set on corporate policies, not on what the people need, desire and prefers.

It escalates when we consider “while the Microsoft Store app ecosystem is a dead horse that’s been beaten over and over, it has gotten worse since the Surface 3. Microsoft is no longer pushing the Universal Windows App ecosystem as hard as it did in previous years and developers have subsequently jumped ship“, this now implies that the Surface Go is a system that goes nowhere fast and will reduce its own market and options faster still, so when we see that it is $100 more than the Apple iPad with cell and Wi-Fi, why would we consider a device that was surpassed by Apple by 2014, 4 years ago and the Microsoft version has not even been released yet. The only selling part might be Microsoft Office, but yet there we see that Google with Docs and Sheets is an equal in pretty much every way, so there we are with hardware that I dreamed off in 2003, Apple delivered 7 years later and Microsoft is only now getting to that point, and when you realise that you need a keyboard and pen to make the Surface Go decently usable, which is another $200, what direction would you take? Apple or nowhere? So what is Microsoft doing exactly?

Even when we consider other fields, the Microsoft Go will falter on no less than 5 given field settings against the Raytheon Tablet that is already pushing technological boundaries, some that would frighten Apple to a certain extent, others are not worthy of consideration when we consider the market Apple is in. In that my sense of humour takes over when we consider two developers, the first Steven Weeks, the Hydra Swarm program manager who gives us (in regards to the Raytheon solution) “Drop it in the water, you can do that.” and then there is Jeff Mazurek, the iConnect program manager who gives us “What the army is focused on is a single, central battery that will connect to the other batteries and trickle-charge them” , yes you can giggle all you like, Microsoft is THAT far behind, a military developer like Raytheon surpassed them not overnight, but in the timeframe where they (Microsoft that is) were all falling over one another on the ‘greatness’ of Azure cloud and all the logic defying marketing on the Surface pro (and how it was actually really overpriced) in that time Raytheon got a tablet past primary development that is surpassing whatever Microsoft is offering the consumer now. In all this, Raytheon has the basic setting of a field version of a table that would be interesting for pretty much anyone in the Middle East, Latin America, Canada and Rural India and China. By the way these populations surpass the 2 billion mark, 25% of the population on the planet. A group that Microsoft has always ignored and that is fair enough, because the bulk cannot afford a tablet, but to offer one that is already lagging in too many fields is just slightly too weird for my liking and I actually love weird at times.

In the end PC World gives us “The Surface Go enters a tablet space whose most popular players include the Android-based 9.7-inch Galaxy Tab S3 for a lofty $599 and the far more affordable Amazon Fire HD 10 for a mere $150, as well as, of course, the dominant Apple iPad, which starts at $329. It appears that Microsoft is shooting for somewhere in the middle“, I cannot completely agree. Not on the assessment of PC World, but on the path of Microsoft, if they were serious in any way, than they would have given us one model, the 128GB storage/6GB RAM model, allowing the people to get traction, allowing others to see what apps can grow the business whilst giving the people a device that has enough for all their office needs and entertainment value (music and video), that would have been a serious step, Microsoft faltered there (yet again). And whilst offering that for a mere $450 to the education community getting the growth of the next generation through loyalty growth they had a starting path. It seems to me that someone decided against that and they are merely a niche taste that had no distinctive taste and has the aroma that would have been accepted by the consumer 5 years ago. In today’s market it merely looks like an ‘1850 salt print’ in a 1.6 million colour digital marketing world. Some will love the nostalgia, yet a mere 5 minutes later they will be required to meet the updated deadline(s), and when Wi-Fi is flawed, those users will not have any real option.

In the end, is this the Surface Go or the Surface Go Away?

 

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Chaos, benefit or danger?

As an aspiring agent of chaos, I have always been in favour of chaos. There are two quotes from the movie The Dark knight (2008) that are important here. They seem meaningless, but they are not. Consider the events surrounding Brexit. The IMF, Wall Street, the ECB all desperate to scheme through fear mongering, and they are even at it today, all so eager to keep their status quo in place. So, the first quote is: “Y’know they’re schemers. Schemers trying to control their little worlds. I try to show the schemers how pathetic their attempts to control things really are“, that is only partially true. The evidence is all around us on how Wall Street is still largely in control. I am not giving you some conspiracy theory on how they did one or the other. The news as we read it in nearly every decent newspaper gives you that evidence and they call it ‘policy’. It is fun to make a second movie reference, especially as it also included Christian Bale. The movie the Big Short (2015) shows clearly the facts of the subprime mortgage issues that unfolded and became a reality. It was based on the book by Michael Lewis called The Big Short: Inside the Doomsday Machine. I was sceptic at first, not because of the actors involved. Yet the notion that it involved Steve Carell and Ryan Gosling made me a little wary. In the end, I saw a movie that showed a Steve Carell who shows us how brilliant he actually is, more than merely a really good comedian. Even as he had already worked together with his prospective son in law (a Crazy, Stupid, Love pun), as the narrator in part of the movie Ryan Gosling gives it that extra, that part that will make you remember the movie long after you have seen it. The movie ends up being not merely an entertainer, the movie becomes an educator almost to the degree that the book was. Together with Margin Call and Inside Job you get a real grasp of the economic wasteland that 2008 created.

This part is truly important, because when you consider those facts and the mere realisation that the US, EU and many other places still have no proper protective laws in place is just scary.

Part of this is seen in the McKinsey report on June 5th 2018 where we see: “That the effects of Pillar 2 add-ons and capital buffers should result in two widely different assessments, of €56 billion and €2.2 billion, is notable, highlighting the room for national discretion during implementation. In Sweden and Norway, for example, supervisors are reflecting higher risk weights for mortgage loans in Pillar 2 capital requirements. Some analysts are therefore expecting that these add-ons will be removed, given that they are already captured by an internal model floor for mortgages under Pillar 1“, the part ‘expecting that these add-ons will be removed‘ is the danger here. You see, Bloomberg reported in January 2018 (at https://www.bloomberg.com/news/articles/2018-01-25/banks-prepare-for-battle-as-europe-readies-rules-to-cut-risk), “banks are uncertain about how Pillar 2 capital requirements — demands set over and above legal minimums — will be imposed“, the statement is odd as they were already there in Basel 2, so why is there now ‘miscommunication’? (Perhaps ‘ignorance through intentional non-comprehension‘ might be a better term).

When we look at those two pillars we see:

First Pillar: Minimum Capital Requirement
The first pillar Minimum Capital Requirement is mainly for total risk including the credit risk, market risk as well as Operational Risk.

Second Pillar: Supervisory Review Process
The second pillar i.e. Supervisory Review Process is basically intended to ensure that the banks have adequate capital to support all the risks associated in their businesses.

You see, we have seen the game of CDO’s, derivatives in many forms, sometimes being ‘diplomatically’ called Bespoke Tranche Opportunities nowadays, the Big Short mentions it at the very end. Consider that this was a 2015 movie, and Bloomberg gives us last August: “Pacific Investment Management Co., Goldman Sachs Asset Management, Columbia Threadneedle and others are snatching up bonds tied to subprime mortgages and other home loans made before the housing crisis, while selling speculative-grade company debt. They say junk yields are too low for the risk investors are taking, and securities backed by mortgages — which have already gained as much as 6.9 percent this year according to Bank of America Corp. data — offer higher potential returns given the risk“, it implies that some could get rich by taking risk on junk. So when that collapses, considering Basel 3 pillar one and two, what are the chances that pillar one, the operational side does not include such events as it is not ‘operational‘ but based on non-operational settings? Where is the risk then? In addition, when we see that now, the banks are expected to ‘expecting that these add-ons will be removed‘ from consideration, how dangerous is the balance at that point? Did we not learn enough in the years 2008-2011? Why are we allowing these gambles leaving us with nothing twice over? Why are there no clear laws banning credit swaps and BTO’s? It might sound nice and soundbyte nice when the pope makes such a claim, yet it is still legally an option, so why was this not halted? The fact that the book and movie mention this gives rise to the fact that Wall Street knew for many years, yet they let it slide. So what happens when the people DEMAND from their president that the banks will no longer bailout banks involved in that? What happens when Wall Street faces the rage of the people and there is no continuance or replay of the Emergency Economic Stabilization Act of 2008? What happens when the people have had enough and in honour of the American Civil War (1861 to 1865) decide on the American Wall Street Clambake of (20xx) where 150 million Americans decide to lynch the 63,779 bankers on Wall Street in public, would that change a few noses to be more morally inclined (of those still alive that is)?

Agustin Carstens gives us a more diplomatic view in the Financial Times (at https://www.ft.com/content/720efbe2-75fa-11e8-a8c4-408cfba4327c) where we see “the future is not pre-ordained. The right policies can help. While the path ahead is a narrow one, it can be taken. We should seize the day to rebalance the policy mix and sustain the current expansion. That means regaining room for policy manoeuvre and reviving the flagging efforts to implement structural policies. Let’s use macroprudential tools to strengthen resilience where financial vulnerabilities are building up. Let’s ensure that public finances are on a sound footing“, yet he phrases it better, but as I stated in the beginning, I am an aspiring agent of chaos after all. This gets me to the second quote in the Dark Knight. It is applicable in two settings, the one we saw and the one we are about to see. The quote: “You know what I noticed? Nobody panics when things go according to plan. Even when the plan is horrifying. If tomorrow I told the press that, like, a gang-banger would get shot, or a truckload of soldiers will be blown up, nobody panics. Because it’s all part of the plan. But when I say that one little old mayor will die, well then everybody loses their minds!

This gets me to the situation where Israel made a choice to speak, but from where I am sitting, it seems like the wrong voice to raise and it is the setting of a dangerous strategy that could backfire in ways that we cannot perceive as yet.

You see, on Wednesday afternoon Netanyahu tweeted out a video praising the Iranian soccer team for its performance in the World Cup against Portugal with “The Iranian team just did the impossible. To the Iranian people I say: You showed courage on the playing field, and today you showed the same courage in the streets of Iran.

For soccer fans it was a remarkable day, most of them did not give Iran any chance of winning, not against Morocco, who has a team that can stand up to the likes of Spain, a nation devoted to soccer, so for Iran to win, that was a really big thing. Now consider the words ‘today you showed the same courage in the streets of Iran‘. This is a reference to the Iranian currency plunging to the depths of the Mariana trench, having a massive impact on the Iranian people. ABC gave us (at http://www.abc.net.au/news/2018-06-26/thousands-protest-in-iran-over-failing-economy/9909184) ‘Thousands protest in Iran over failing economy, forcing closure of Tehran’s Grand Bazaar‘, now we can acknowledge the event, yet from the lips of PM Benjamin Netanyahu, or in this one particular case ‘PM Be not a Yahoo‘ it seems to give notification that revolution needs to be on their mind. The problems is even as they currently have a lame duck in place (President Hassan Rouhani), who is merely accepted as the temporary voice of the Clerical and Military power in Iran. Such a revolution would merely empower the military and give rise to the Clerical side to end up supporting the military

Yet the setting in the frame whilst the nuclear negotiations are still going on, Iran is under pressure. The danger we are now exposed to is that the Iranian clerics and military will not place another ‘liberal’ minded person for another 4 years, so the danger of having some short minded version of former president Ahmadinejad on steroids as the next president of Iran is not out of the question. No one can tell whether the clerics and military have prepared the next one, but to get one in their years early tends to push chaos to a level of devastation and this is not the time to make this happen. So basically we see the feeding towards ‘then everybody loses their minds!‘ Could I be wrong?

Off course I can, yet the data and events seeping towards a more extreme new president was always coming, the acceleration in Saudi Arabia and the Iranian acts in Yemen clearly point that way. We see in some sources phrases like “Iranian Foreign Ministry spokesman Bahram Qasemi told a news conference that the ongoing offensive on Hodeidah has put the country on the brink of famine“, from my point of view, the Iranians achieved that last year with the aid of a tool like Hezbollah and pointing the Houthi rebels to cause maximum damage to the people of Yemen. So when we see: “The international organizations and the UN should make an effort to end the aggression against the oppressed Yemeni people“, the UN knows perfectly well that delivered missiles firing from Houthi positions into civilian targets in Saudi Arabia made that a non-option right of the bat. Yet, we must not forget that Foreign Ministry Spokesman Bahram Qassemi played his part very well, the main players are not new to this game and merely waiving their options away is not something the UN is willing to do, in that regard we all need time to get anything proper in place and Israel just changed that instance to some degree. Chaos in Tehran can unfold in ways that cannot be predicted because several players behind the scenes cannot be identified. Yes, the top two (Ali Khamenei and Qasem Soleimani) are known, yet their inner circle is not completely known and now we are in an upcoming impasse where we could be forced to wait until their moves are done, that whilst Iran is nowhere near on the ropes, so they have what might be seen as the field advantage for a little while and that is where chaos can go unbridled and cause actual long term damage.

There is enough evidence of that in Syria, Libya, Egypt and Yemen, none coming with short term solutions to get some actual productive. the Egyptian $500 million education reform bill is only two months old and took some time to get it all in the right shape. This is long term thinking, a true working strategy where the next generation will be more educated giving additional options for long term dialogues and giving a nation options to grow economically. Now consider that any prospective improvement is now optionally off the table for Iran until 2027. This gives a long term danger to sparks evolving in a very different form of chaos, one that no one can predict how it will unfold in the end. That is the game at present. Now consider such an event happening whilst Europe and the US go through another 2008 event, something that several predict and most seem to agree that it is pretty much unavoidable.

Almost like some used to say that the Great War (1914-1918) was the war to end all wars and we were treated to a very different reality in 1938. In that year we got the very first issue of Superman and Time magazine elected Adolf Hitler as ‘Man of the Year‘, do you remember how that ended, apparently all remaining 9 million Israeli’s definitely do!

Chaos can be good, it allows for true change. In this the quote: “It’s like knocking over an ant-hill. Every new generation gets stronger, the ant-hill gets redesigned, made better” is appropriate, yet the danger is that those ants have access to an arsenal of ‘solutions’ that can make a real dent ensuring long term chaos, that is why the Israeli push is not the beneficial push that the PM thought it could be, so tweeting that video was slightly too rash (for more than one reason). In that the earlier setting where we let the banks completely collapse might be the better options (if we had to choose between the two). In the second part, the Iranian debacle is also set on how China will react. Some are speculating that Iran wants to offer an oil solution if China is the saviour that they hope it will be. I cannot tell, I never looked at any data or papers giving real light to one path towards the other path. For china it might be an option, especially after the vitriolic actions against Huawei and ZTE, yet in the end that market is for now not large enough to cause truest concern, not whilst they have plenty of options to grow 5G in Europe with a population twice the size of the US and an overwhelming desire of the local populations in western Europe and Scandinavia to adopt it, there is enough for China to focus on, they might love to help out Iran, just to spite the US and to get under-priced oil, yet that is a separate play from what is on offer.

Scandinavia is also interesting as it allows Huawei to reach the bulk of Swedes through their three cities (Stockholm, Goteborg and Malmo). As Malmo is merely a bridge crossing away from Denmark’s capital Copenhagen a growth path for Huawei could show others soon thereafter what the rest is missing out on and with Swedish Telia on board, the setting for both Denmark and Norway becomes a reality. Even as the US is all up in arms, Reuters gave us merely 4 months ago on Huawei being “the company in prime position to lead the global race for next-generation 5G networks despite U.S. allegations it poses a security threat“. So even as we see newscasts like ‘Sprint, T-Mobile merger will generate 5G powerhouse, cut costs for users‘, that setting is definitely not a given. You see the chaos is not in getting the 5G, the chaos comes from 5G as governments and large telecom companies are nowhere near dealing with the setting that cyber threats can become. this is not merely phishing, scamming or abducting accounts, this is the realistic danger that for the first two years 5G facilitators become start points of all kinds of chaos though the facilitation of non-calibrated systems, architecture lacking equilibrium. the difference between ‘a holistic approach towards DDoS attacks and 5G networks, rather than relying on outdated defence tactics‘ (source: Wireless Week). Non-repudiation would have been a quality first step in that, in a time when too many are relying on authentication, we seem to forget that it remains relatively easy to get a ‘false positive’. Please do not take my word for that, merely visit 675 N Randolph St, Arlington, VA USA (address of DARPA) and ask Dr. Steven H. Walker if you can take a look at a massive archive of false positives that their previous research gave in all kinds of fields, it is an impressive read to get your fingers on and you’ll die of old age before you even get through 30% of the materials, even if you start as a teenager.

That was the ball game from the start. A mere setting of order versus chaos; a simple setting where order could have prevailed, if not for the economic setting of greed and speed over quality. In that 5G does not open up the super highway of data, it merely opened `15 highways next to the one we cannot even properly control now and we end getting 16 highways flooding us with false positives, chaos on a new level and not chaos of the good kind. It will be the wet dream of organised crime for close to a decade to come and the larger players remain is presented denial.

For that you merely have to search Google and use the search term “Telstra non-repudiation“, you get ‘Mobile Authenticator’, which states to be ‘Enhanced non-repudiation’. These two are not the same! Now, important that this is not anti-Telstra, the bulk of all systems on a global level have these issues. My issue in this particular case is “reduce the costs associated with robust user authentication for large populations of staff or customers accessing your online service” Non-repudiation is never cheaper (for now) and in the end the flaws are not obvious, yet they are there and it takes one sloppy moment to give access. Computer world gave us last year the article by Evan Schuman involved here is Steven Sprague is the CEO of Rivetz, this project that comes the from National Institute of Standards and Technology’s National Cybersecurity Center of Excellence (yes, it’s a mouth full) is giving us: ““Software code is easily altered, and memory can be copied,” he said. “The [whole] software process can be observed. You simply cannot hide a secret in the operating system. It’s time to finally do it correctly, with hardened keys within the device.”“. It is one step stronger, yet this is still not non-repudiation, where the setting is that you and only you could have done the deed. Some go for the ‘Dual biometrics may just be the authentication answer we need‘, yet that is still ways away and in the end on the mobile path not really a good solution. One player called Sensory is making positive headway, yet they are not there yet and time ran out close to two years ago to get something really good on the roadmap. So even as we see that authentication solutions are there, in the immediate setting where mobiles can now move billions, the game is now and has always been non-repudiation. At present we move over a billion dollars a day via mobiles and ecommerce, when we consider that this push is going to fivefold in the next decade, do you really think that authentication is going to get the job done securely and on time before the big bank download begins?

Is there a connection?

Consider Bank Melli Iran: $45.5 billion, Bank Mellat: $39.7 billion and Bank Saderat Iran: $39.3 billion. Merely three banks with a few billions. Now consider the following settings. In the first we get “While the standards of the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) are widely followed around the world, they are not enforced in Iran“, a mere setting of rules. Now we consider the resetting of Basel 3 pillars one and two, with the support from several financial sources giving us “The Central Bank of Iran has played a significant and effective role in implementing Basel II and III standards in the banking system“. Now we take those elements and add 5G, whilst non-repudiation is non-existent and some devious entrepreneurs help themselves to the $125 billion of cream. This fat cat, can we call them ‘organised cats’, could potentially use the 5G debacle to remain anonymous and sail away on their new yacht (by the way, if you guys pull that off, please remember my AU$20,000,000 consultancy fee through Riyadh, so I can use the legally available tax avoidance rules).

Do you still think I am joking?

We have heard all kinds of noise concerning security, so in addition to that, one source (Internet of business dot com) gives us “5G will enable IoT applications such as autonomous vehicles, healthcare solutions, and robotics. But the technology also poses a much larger security risk than the 2G, 3G, and 4G networks that came before it. Why is this?
Significantly, 5G represents an overhaul in the way that networks are run and managed. In contrast to the hardware-based networks of the past, the technology takes advantage of virtualisation and cloud systems, leaving it more vulnerable to breaches if not properly secured.
” There we see the connection, proclamation of proper security are at the foundation of it, whilst the systems are all about Authentication and not about clear non-repudiation, in an age where mobile hi-jacking is a reality of life, the authentications in place are often too easily avoided. In the time a person walks to the bathroom a highly jacked phone can now set up the vibe of 25 million transactions, all completed in 52 seconds, most likely at that point, the person going to the toilet barely sat down for the event to release, that’s what it took to set the Iranian coffers to ’empty’. Now, many will not react that it happens to Iran, yet the newly elected extremist will not let that slide; and what happens when it is not Iran, but another nation? What happens when we realise too late that our own banks are not up to scrap?

Only this month did we see: “Security breaches continue to be an ever-present threat for financial institutions. Defending against attacks and authenticating customers without creating undue friction is something financial institutions have not yet completely solved. Consumers seem to be willing to use more secure methods to access their accounts, but not necessarily give up on ease and speed of transacting“, and in addition ““Attacks haven’t died down,” said Will Lasala, director of security solutions at OneSpan, a cybersecurity firm. “The amount of loss is through the roof. Stopping losses and the need to analyze what’s happening in those transactions is important.”“. That was this month, whilst the FDIC (Federal Deposit Insurance Corporation) treated all willing to learn to “Internet connections establish a pathway for hackers and thieves to access and steal sensitive personal information, including the banking records that many customers store on their home computers. Phishing, pharming, spyware, malware, worms, nimdas, viruses, buffer overflows, and spam—all relatively recent entries to our vocabulary—have raised electronic/Internet banking risk levels to new highs, and financial institutions have had to increase security measures to address those risks“, that was in 2005, thirteen years ago. Welcome to the age of ‘if it costs too much, sit on the solution for now‘, you see, not much headway was made (clearly nowhere near enough) and in that result we are now on the edge of 5G where the speed and issues are driven upwards at least tenfold, so that is where non-repudiation was a solution, if only someone had gotten us there. It was a risk covered in my University IT classes in 2010, so it is not like there was no awareness, merely a path that was seen by too many decision makers as too unprofitable to consider.

Now we see chaos in its proper light. Chaos could have set the stage properly, if they only allowed the banks to collapse in 2008, yet that did not happen and some players are up to their ‘old’ tricks in a new jacket whilst the people are more likely than not having to pay for it all again.

 

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Go with a smile

OK, I will be honest, this morning, I saw news pass by and it made me giggle. It was the title, I swear, the title was enough, because below the surface it is actually a serious matter, yet the writer/editor of Arab News gives us “‘Spy cell’ in Saudi Arabia sought foreign financing“. In my mind, I saw the image of two freshman at Berkeley University in California, walk into a wealth managing corporation like Rothschild’s and tell the CEO, that they found a way to overthrow the government and if they could please get some funding (at http://www.arabnews.com/node/1306306/saudi-arabia).

I know, you are giggling now too, but that is what they title left me with, yet it is actually a lot more serious. You see, the Kingdom of Saudi Arabia is a monarchy. Like all monarchies there are set rules and regulations on what to do and more important what not to do. Anyone with a primary school education knows this, no rocket science involved.

Yet, below the title, under the image we see a caption that is very much a serious matter. With: “Saudi Arabia’s Presidency of the State Security arrested seven people for suspicious communication with foreign entities and actions against the state“, you see there are two elements in this the first is ‘suspicious communications‘, which is optionally an element, yet ‘actions against the state‘ is actually quite clear. The question is how it all fits together, and make no mistake, there is a clear setting that it applies to a hell of a lot more people than merely those in the KSA, so you better wake up fast.

The elements of worry are seen in the first paragraph. Here we see “sought to “incite strife by communicating with foreign entities hostile to the Kingdom and to establish a false legal organization, according to information received by Asharq Al-Awsat from informed sources“, it could impact a lot more people than you think. In light of the escalations of Vision 2030 as well as the setting in Neom, we are bound to get a few cowboys trying to strike it rich (I am definitely one of them), in a setting of a total amount of close to $800 billion, or $800,000,000,000, I too will happily try to pick up a few coins, I will as the non-greedy person that I am happily settle for 0.001% or $8,000,000. I have a weapon system, an idea to make an Iranian nuclear reactor do the runaway on its own operators (by using the principle of a snow globe), which is my way of telling Steven Walker from DARPA that his behavioural sciences degree is not that useful in a nuclear physicist setting (nyuk, nyuk, nyuk), no negativity on Steven Walker though, he is slightly smarter than most smart cookies, and in addition to the earlier two ‘solutions’, I also considered a solution that I thought up to solve the UK NHS issue, which actually has a lot more applications under 5G.

I am not digressing, you see, these idea’s all need funding, now there are a few players with ideas that are all good and proper and in the 11th hour one of the backers walks away (reason is irrelevant), so now this (young) upstart needs to fix things fast to get its fingers in the Saudi Arabian treasury till of Vision 2030/Neom. In this he reaches out and he finds an interesting backer and meets with an entrepreneur in Qatar, now we have close to the same setting as we just read. Qatar and the Kingdom of Saudi Arabia are not really on good terms. Now add a few emails that skates around the funding and we have a setting that might be seen by Saudi Arabia as a worry, when we consider that Qatar has its own ‘Smart Digital plan‘ for 2030 we get a setting that some people might consider selling their idea twice. It is not far-fetched and it is definitely on the minds of close to a dozen growth driven people in Silicon Valley. Now we have a very different ballgame and that is not even considering those people who have been working as 3rd party developers for places like Palantir; anyone of those developers when they approach both Saudi Arabia and Qatar might be seen as just such a transgressor.

We forget that each nation has its own set of rules and even as some think that they are ‘shielded’ as they are American or perhaps Commonwealth citizen, they better wake up fast and realise that in national interests, it is the nation where you are where you need to adhere to settings. This works in both directions. We see this with “Dr. Ibrahim Al-Nahas, member of Shoura Committee Council on Foreign Affairs, told Asharq Al-Awsat on Saturday that the Kingdom is capable of overcoming many security challenges due to the vigilance of its security apparatus“, I do not for one moment disagree with Dr. Ibrahim Al-Nahas, for the most merely due to a lack of data, yet what he optionally forgets is that this system is going to get tested more and more over the next 5 years from all the parties who are trying to get an option to what we should consider is the largest technological jackpot in the last 25 years. We have not seen the option to such opportunities since the beginning of Windows 95, so there will be a massive flock of cowboys trying to land a deal with numbers optionally up to 9 zeroes behind a number, so you better believe that thousands of ‘innovators’ will come with their idea of a lifetime, which could potentially swamp the security apparatus.

In case of the article, it is about seven people who have been active to facilitate by acts that are considered “hostile to Saudi Arabia, to receive financial support in exchange for continuing to incite trouble”, which seems to be a decently clear setting. Yet it will not always be that clear when we see “It said authorities detected coordinated activities by a group of people, who carried out organized work to violate the religious and national principles of the Kingdom“, in the setting as quoted, there are a number of issues, religious principles being the first one that carries weight, because most cowboys seem to forget that Saudi Arabia is a Muslim state, as such it acts on religious settings. That is also the case in America where they have the pledge of allegiance, which gives us “I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one Nation under God“, this is important, because many nations have something similar. So when someone noticed that McDonalds in Saudi Arabia advertised “We renew our allegiance and obedience for his royal highness, the servant of the two holy mosques, King Salman the son of Abdul Aziz Al Saud, and we support Amir Mohammed bin Salman, his son, to become Minister of Defence and Prime Minister and to be nominated as successor.  God give him wisdom and equip him to rule his kingdom. With peace and prosperity, McDonald’s“, in this the response by someone who appears to be a Canadian, we see “Ads in Saudi Arabia placed by @McDonalds pledging allegiance to the new crown prince….am I the only one that finds this totally bizarre?“, I think that he did nothing wrong, even as he thinks it is weird, but when you are so far removed from a true monarchy setting, you forget small things. I too when I was in my military time had to make the pledge of allegiance, which in my case was to pledge allegiance to the monarch, obedience to the law and subject to martial law  with: “Ik zweer trouw aan de Koningin, gehoorzaamheid aan de wetten en onderwerping aan de krijgstucht. Zo waarlijk helpe mij God Almachtig“. Even as martial law no longer applies to me, I still feel that my oath obliges me to come to the aid and protection of the Dutch royal family until my dying day. It is something we accept, it matters to us, to any monarchist. So it is the same in Saudi Arabia and you better believe that (roughly) 99.99992% of these citizens will comply and enforce that oath on all those (citizens) who think they need not do that.

I feel that global businesses forget about such settings and they are optionally shooting themselves in the foot by not educating their staff members when having to go to such places. It matters because we all make mistakes and there are transgressions which are usually forgiven (unless you make an error under paragraph 322(5) under UK immigration law, then you are truly screwed), yet when you make mistake after mistake, even unintentional, merely because you come from a very different environment, you could end up burning the brand you represent permanently in that nation, which might be a nice little challenge for Apple, Google and IBM to survive. Although IBM is more business strict, but the Apple and Google mindset might find it increasingly hard to adjust and that is where losses are made, really large losses I might add.

So even if you are laughing now on the ridiculous setting I am offering, you better realise that the law in not a funny matter in Saudi Arabia. It is set to be written as “Saudi Arabia is a state built on the foundations of justice and it enshrines the principal of equality for all before the law”, you better realise that within many nations there is a consideration on what defines ‘foundations of justice‘. According to some sources Saudi law in theory allows that the ruling of a death sentence is a real setting, now we can understand that we know not to commit murder, yet in that same setting Espionage and Treason also gets your head separated from your body just like in: ‘off with their heads!‘ (Quoting the Queen of Hearts from Alice in Wonderland), now in the technological setting that is happening at present in the beginning of the article, the involvement of Qatar (fictive example), treason and espionage are actual options now coming to the surface? Now we all know that being well prepared stops such things from happening, yet who knew that Adultery and Waging war on God are equally punishable? So when you think that you have a nice option for Saturday night in your hotel room, did you realise that if you live by ‘it doesn’t count in you are in another country‘, your future might end up a little more grim than when you got out of bed that morning? And that is even before we get to Waging war on God, which is an issue on several levels. You see unless you have a clerical mind, the dangers of waging war on God is an open field, you can be transgressing this unknowingly if you are a Christian and that is something one must be prepared for so that it can be avoided.

If I understood it correctly the ḥirabah is seen as ‘enemy of God‘. The reference is seen in verse 33 of Surah al-Ma’ida of the Qur’an. It sets punishment for “those who wage war against Allah and His Prophet and strive to spread disorder in the land“, yet ‘disorder in the land‘ is a much wider concept nowadays then when what it was in those ancient days. We see that wisdom when we look back to those days as ‘banditry in open country: a uniquely destabilizing threat to civil order in a pre-modern society’. You might think of it as folly, yet in those days when towns relied on commerce and traders, banditry could have far-fetching consequences for the entire town, perhaps even the region. You only have to look at the movie ‘Kingdom of Heaven‘ a Ridley Scott masterpiece to see what a massive destabilising factor the Christian knights and people tended to be in those days. They were basically whoring and pillaging whenever possible (basically every waking hour), and no one considers the impact that left the Muslim Arabic nations?

This all matters because when you are trying to tap into the wealth that Arabia as a whole is offering, you better know what you are in for, you better be prepared and you also better leave some of your values (or lack thereof) at home. The setting of this stage seems all too appealing, yet many nations have a clear legal directive and as I have been hearing some of the conversations around me, it seems to me that some have not considered the impact they are setting their perception, what they think is happening and what is perceived. So when I heard someone say “go there, smile a lot and make a fortune. It works in japan“. Now, I am not certain whether that would work in Japan to that degree, I am decently certain that they will lose a lot more than they bargained for when they are totally unprepared going to Saudi Arabia thinking that they strike gold with a mere presentation and a smile. Because the wrong presentation can easily be perceived and what you thought was a nice idea in the end brought chaos in the land, good luck setting up your defence at that point.

I believe that good business is always available in every nation; the wisdom is to comprehend the rules of that game in that nation and abide by them, not as best as you can, but completely. In the age of compromise I think the current generation is oblivious to that danger, they have been so used to go by ‘let’s compromise’, not everyone is willing to do that. In this considering John Braithwaite’s excellent work ‘Corporate Crime in the Pharmaceutical Industry‘, it is not about the pharmaceutical part, the issue is the setting of corporations. By the time that you have gotten to chapter 4 (fraud in the safety testing of drugs) or chapter 5 (criminal negligence in unsafe manufacturing of drugs), by that setting you will have seen close to a dozen issues that could perceive you as the party responsible for creating ‘disorder in the land‘. This is merely a academic setting, I am not an Saudi Attorney, I have no experience in practicing Muslim Law, but these were the questions that formed in my mind and In all this I see a clear element missing in all the presentations that passed my eyes, seeing them scrutinised in a setting of Islamic Law seems to be important, because the law in Saudi Arabia is not set in the Crimes Act, the Data Protection Act, the Human Rights Act or the Mental Capacity Act. It is set through the Quran and that is a very important distinction.

For the most, when people are going for the jackpot, they tend to be as prepared as possible, yet in all this, more than just a few have forgotten that it is not merely a presentation, they better be aware of the legal lay of the land, as well as the social and personal norms that are required in Saudi Arabia (as with every nation you want to do business), we seem to look at the EU where almost anything is valid and not illegal, as such they forget that there are places where that approach will not work.

Did I get all this from a mere reference to a Spy Cell in the Arab News? Well, not exactly! I had been looking at parts of this for a little while, merely because some settings require investigation on any level, and the more I had to dig into certain messages the more I was confronted with people quoting the Quran, which came to a focal point when I was confronted with ‘French Proposal to Change the Quran’, which was from early may this year in the Atlantic. Apart from the blasphemy that it represents, which passages from the Bible regarding slavery or women as servants of their husbands have been removed in the last 50 years?

Opposition of such views was given by Tareq Oubrou, the prominent French imam who oversees the Grand Mosque of Bordeaux. Here we see “the notion that anti-Semitism is built into Islam is “theologically false,” he added. As monotheistic “People of the Book,” Jews and Christians enjoy a special status in Islamic law. Historically, they were considered protected dhimmi communities, which meant they were allowed to practice their own religions, although they were subject to a tax and various indignities that symbolized their subordination to Muslims”, by the way, this was an act that Christians did to the Saracens in Italy (also seen in ‘Kingdom of Heaven’), so let’s not throw mud when we know that we have done the same thing.

In the end, wherever you go, feel free to go with a smile and be prepared for what you face, knowing the legal and religious lay of the land is a rather important step that most seem to ignore, it might not matter in all places, but not preparing in places where issues like that do matter is merely the greater folly.

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The sting of history

There was an interesting article on the BBC (at http://www.bbc.com/news/business-43656378) a few days ago. I missed it initially as I tend to not dig too deep into the BBC past the breaking news points at times. Yet there it was, staring at me and I thought it was rather funny. You see ‘Google should not be in business of war, say employees‘, which is fair enough. Apart from the issue of them not being too great at waging war and roughing it out, it makes perfect sense to stay away from war. Yet is that possible? You see, the quote is funny when you see ‘No military projects‘, whilst we are all aware that the internet itself is an invention of DARPA, who came up with it as a solution that addressed “A network of such [computers], connected to one another by wide-band communication lines [which provided] the functions of present-day libraries together with anticipated advances in information storage and retrieval and [other] symbiotic functions“, which let to ARPANET and became the Internet. So now that the cat is out of the bag, we can continue. The objection they give is fair enough. When you are an engineer who is destined to create a world where everyone communicates to one another, the last thing you want to see is “Project Maven involves using artificial intelligence to improve the precision of military drone strikes“. I am not sure if Google could achieve it, but the goal is clear and so is the objection. The BBC article show merely one side, when we go to the source itself (at https://www.defense.gov/News/Article/Article/1254719/project-maven-to-deploy-computer-algorithms-to-war-zone-by-years-end/), in this I saw the words from Marine Corps Colonel Drew Cukor: “Cukor described an algorithm as about 75 lines of Python code “placed inside a larger software-hardware container.” He said the immediate focus is 38 classes of objects that represent the kinds of things the department needs to detect, especially in the fight against the Islamic State of Iraq and Syria“. You see, I think he has been talking to the wrong people. Perhaps you remember the project SETI screensaver. “In May 1999 the University of California launched SETI@Home. SETI stands for the” Search for Extraterrestrial Intelligence,” Originally thought that it could at best recruit only a thousand or so participants, more than a million people actually signed up on the day and in the process overwhelmed the meager desktop PC that was set aside for this project“, I remember it because I was one of them. It is in that trend that “SETI@Home was built around the idea that people with personal computers who often leave them to do something else and then just let the screensaver run are actually wasting good computing resources. This was a good thing, as these ‘idle’ moments can actually be used to process the large amount of data that SETI collects from the galaxy” (source: Manilla Times), they were right. The design was brilliant and simple and it worked better than even the SETI people thought it would, but here we now see the application, where any android (OK, IOS too) device created after 2016 is pretty much a supercomputer at rest. You see, Drew Cukor is trying to look where he needs to look, it is a ‘flaw’ he has as well as the bulk of all the military. You see, when you look for a target that is 1 in 10,000, so he needs to hit the 0.01% mark. This is his choice and that is what he needs to do, I am merely stating that by figuring out where NOT to look, I am upping his chances. If I can set the premise of illuminating 7,500 false potential in a few seconds, his job went from a 0.01% chance to 0.04%, making his work 25 times easier and optionally faster. Perhaps the change could eliminate 8,500 or even 9,000 flags. Now we are talking the chances and the time frame we need. You see, it is the memo of Bob Work that does remain an issue. I disagree with “As numerous studies have made clear, the department of defense must integrate artificial intelligence and machine learning more effectively across operations to maintain advantages over increasingly capable adversaries and competitors,“. The clear distinction is that those people tend to not rely on a smartphone, they rely on a simple Nokia 2100 burner phone and as such, there will be a complete absence of data, or will there be? As I see it, to tackle that, you need to be able to engage is what might be regarded as a ‘Snippet War‘, a war based on (a lot of) ‘small pieces of data or brief extracts‘. It is in one part cell tower connection patterns, it is in one part tracking IMEI (International Mobile Equipment Identity) codes and a part of sim switching. It is a jumble of patterns and normally getting anything done will be insane. Now what happens when we connect 100 supercomputers to one cell tower and mine all available tags? What happens when we can disseminate these packages and let all those supercomputers do the job? Merely 100 smart phones or even 1,000 smart phones per cell tower. At that point the war changes, because now we have an optional setting where on the spot data is offered in real time. Some might call it ‘the wet dream’ of Marine Corps Col. Drew Cukor and he was not ever aware that he was allowed to adult dream to that degree on the job, was he?

Even as these people are throwing AI around like it is Steven Spielberg’s chance to make a Kubrick movie, in the end it is a new scale and new level of machine learning, a combination of clustered flags and decentralised processing on a level that is not linked to any synchronicity. Part of this solution is not in the future, it was in the past. For that we need to read the original papers by Paul Baran in the early 60’s. I think we pushed forward to fast (a likely involuntary reaction). His concept of packet switching was not taken far enough, because the issues of then are nowhere near the issues of now. Consider raw data as a package and the transmission itself set the foundation of the data path that is to be created. So basically the package becomes the data entry point of raw data and the mobile phone processes this data on the fly, resetting the data parameters on the fly, giving instant rise to what is unlikely to be a threat and optionally what is), a setting where 90% could be parsed by the time it gets to the mining point. The interesting side is that the container for processing this could be set in the memory of most mobile phones without installing stuff as it is merely processing parsed data, not a nice, but essentially an optional solution to get a few hundred thousand mobiles to do in mere minutes what takes a day by most data centres, they merely receive the first level processed data, now it is a lot more interesting, as thousands are near a cell tower, that data keeps on being processed on the fly by supercomputers at rest all over the place.

So, we are not as Drew states ‘in an AI arms race‘, we are merely in a race to be clever on how we process data and we need to be clever on how to get these things done a lot faster. The fact that the foundation of that solution is 50 years old and still counts as an optional way in getting things done merely shows the brilliance of those who came before us. You see, that is where the military forgot the lessons of limitations. As we shun the old games like the CBM 64, and applaud the now of Ubisoft. We forget that Ubisoft shows to be graphically brilliant, having the resources of 4K camera’s, whilst those on the CBM-64 (Like Sid Meier) were actually brilliant for getting a workable interface that looked decent as they had the mere resources that were 0.000076293% of the resources that Ubisoft gets to work with me now. I am not here to attack Ubisoft, they are working with the resources available, I am addressing the utter brilliance of people like Sid Meier, David Braben, Richard Garriott, Peter Molyneux and a few others for being able to do what they did with the little they had. It is that simplicity and the added SETI@Home where we see the solutions that separates the children from the clever Machine learning programmers. It is not about “an algorithm of about 75 lines of Python code “placed inside a larger software-hardware container.”“, it is about where to set the slicer and how to do it whilst no one is able to say it is happening whilst remaining reliable in what it reports. It is not about a room or a shopping mall with 150 servers walking around the place, it is about the desktop no one notices who is able to keep tabs on those servers merely to keep the shops safe that is the part that matters. The need for brilliance is shown again in limitations when we realise why SETI@Home was designed. It opposes in directness the quote “The colonel described the technology available commercially, the state-of-the-art in computer vision, as “frankly … stunning,” thanks to work in the area by researchers and engineers at Stanford University, the University of California-Berkeley, Carnegie Mellon University and Massachusetts Institute of Technology, and a $36 billion investment last year across commercial industry“, the people at SETI had to get clever fast because they did not get access to $36 billion. How many of these players would have remained around if it was 0.36 billion, or even 0.036 billion? Not too many I reckon, the entire ‘the technology available commercially‘ would instantly fall away the moment the optional payoff remains null, void and unavailable. $36 billion investment implies that those ‘philanthropists’ are expecting a $360 billion payout at some point, call me a sceptic, but that is how I expect those people to roll.

The final ‘mistake’ that Marine Corps Col. Drew Cukor makes is one that he cannot be blamed for. He forgot that computers should again be taught to rough it out, just like the old computers did. The mistake I am referring to is not an actual mistake, it is more accurately the view, the missed perception he unintentionally has. The quote I am referring to is “Before deploying algorithms to combat zones, Cukor said, “you’ve got to have your data ready and you’ve got to prepare and you need the computational infrastructure for training.”“. He is not stating anything incorrect or illogical, he is merely wrong. You see, we need to realise the old days, the days of the mainframe. I got treated in the early 80’s to an ‘event’. You see a ‘box’ was delivered. It was the size of an A3 flatbed scanner, it had the weight of a small office safe (rather weighty that fucker was) and it looked like a print board on a metal box with a starter engine on top. It was pricey like a middle class car. It was a 100Mb Winchester Drive. Yes, 100Mb, the mere size of 4 iPhone X photographs. In those days data was super expensive, so the users and designers had to be really clever about data. This time is needed again, not because we have no storage, we have loads of it. We have to get clever again because there is too much data and we have to filter through too much of it, we need to get better fast because 5G is less than 2 years away and we will drown by that time in all that raw untested data, we need to reset our views and comprehend how the old ways of data worked and prevent Exabyte’s of junk per hour slowing us down, we need to redefine how tags can be used to set different markers, different levels of records. The old ways of hierarchical data was too cumbersome, but it was fast. The same is seen with BTree data (a really antiquated database approach), instantly passing through 50% data in every iteration. In this machine learning could be the key and the next person that comes up with that data solution would surpass the wealth of Mark Zuckerberg pretty much overnight. Data systems need to stop being ‘static’, it needs to be a fluidic and dynamic system, that evolves as data is added. Not because it is cleverer, but because of the amounts of data we need to get through is growing near exponentially per hour. It is there that we see that Google has a very good reason to be involved, not because of the song ‘Here come the drones‘, but because this level of data evolution is pushed upon nearly all and getting in the thick of things is when one remains the top dog and Google is very much about being top dog in that race, as it is servicing the ‘needs’ of billions and as such their own data centres will require loads of evolution, the old ways are getting closer and closer to becoming obsolete, Google needs to be ahead before that happens, and of course when that happens IBM will give a clear memo that they have been on top of it for years whilst trying to figure out how to best present the delays they are currently facing.
 

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Two streams, one view

As I see the news pass by, events shown on separate media, I notice myself wondering if my life had any meaning at all. I was young and I went to the Middle East in 1982, I would return in 83 and 84 only to learn that there was change. Terrorists like Hezbollah and Hamas were only small and Hamas rose as I would see in 1984, yet I thought that change would be inevitable. I saw Hezbollah as nothing more than pesky small minded terrorists, a tool to be used by Iran and Syria. Yet even as Lebanon was trying to move forward, there were signs in media and some places that the US needed Syria too much, in their case dealing with Saddam Hussein and as such many of us thinking we would fight for peace, we only fought for the borderlines that the US decided needed to be in place. It must have been the late 80’s, I was not longer in the Middle East and not all clued in towards the events of the day there. You see DARPA had not rolled out the internet at that point; ARPANET was not available for the audience at large. So today I see that the more things change, the more they stay the same. Now we see another push against Hezbollah. You see Saudi Arabia has had enough of those terrorists and is pushing back hard, it is also willing to push against Iran. I see two issues. One is that this issue will be bloody and even as we hope for the victory of Saudi Arabia there, there are more than just a few markers showing us that the three largest players (US, Russia and UK) are not completely in agreement whether the Middle East should have one clear dominant party. The issues in Iran, Egypt, Saudi Arabia, Libya and Kuwait that have been going on for half a century should show that. If that had not been the case Hezbollah and Hamas would have been little more than an inconvenience and they would have been dealt with a long time ago. So even as I see certain steps being taken I need to wonder if Saudi Arabia is pushing for a resolution, what will the larger picture show as it shifts. As that unfolds where will the US and Russia stand? What actions, or inactions will they use to leave the Status Quo in the middle east in a place called ‘as is’? The evidence for the longest time has shown that they pronounce whatever allies they have, but in the end, they only care for their needs and options. Now, this is not wrong or immoral, it is merely the way any nation plays its game. It is not a new game, it goes back even before Nicola Machiavelli thought it was a god idea to write down certain options for politicians to be.

As per Friday morning, we see: ““Due to the circumstances in the Lebanese Republic, the kingdom asks its citizens who are visiting or residing there to leave immediately,” a Foreign Ministry source quoted by the news agency said, adding that Saudis were advised not to travel to Lebanon from any country“, so even as we can merely speculate on what comes next, the onus is now pushed on Iran and what it is going to do with its terrorist ally Hezbollah. There is one opposing side which was shown by Reuters (at http://www.reuters.com/article/us-yemen-security-saudi-insight/deep-in-yemen-war-saudi-fight-against-iran-falters-idUSKBN1D91UR). With: “The dysfunction is a reminder to Saudi Crown Prince Mohammed bin Salman that his campaign to counter arch-enemy Iran in the Middle East, including threats against Tehran’s ally Hezbollah, may be hard to implement” we acknowledge that Iran has resources and skills and they are driven, both sides clearly are. In my mind, is the additional theatre (read: change of scenery) a workable factor? It does put larger pressures on Iran to get the logistics and goods underway, which will be their weakness to some extent. It is equally an issue how Russia will react. They might not openly act in this placement, yet the clear support to Hezbollah and as the times of Israel states: “the truth is that since Russia began its open military activities in Syria, Hezbollah fighters are also learning Russian methods of war, becoming familiar with advanced Russian weaponry, coming to understand the latest Russian technologies, and in some cases, actually fighting alongside Russian special forces“, we might comprehend the skills and training of the Spetsnaz Malcheks, or the ‘Войска специального назначения’ as they call themselves. In one part Avi Issacharoff omitted or decided not to implement one view in his story. In the end when the Spads are not holding their hands, Hezbollah remains what they were trained enthusiastic terrorists, they are only an army in the smallest sense of the total concept, this also means that as logistics falters, as support dwindles the armed Saudi forces will be more than a match and should gain the upper hand. Now, this can only play out if there is a stalemate between Russia and USA, because if the USA backs down and Hezbollah gets open on the ground Russian support, it becomes an entirely different slice of cake and all bets are off at that point. Only the Russians could push Hezbollah in way that the Iranians could never do. You see, if Iran enters the theatre the game changes as they become a clear and present danger to the state of Israel, their vocal insinuations made that so, so as Iran is trying to get a foothold whilst Israel has a few ways to counter them, we will see a more underground event of escalations where Iran is unable to counter a war they never have faced. You see their words (Iran that is) might look good on the news and on PowerPoint presentations, yet in the true data parks there is no setting, because in the end, this generation of Iranians have never faced anyone like Israel before and their faith in their own internal governmental presentations will make them even less prepared. So at that point it is merely a scuffle between Hezbollah and Saudi armed forces and in that equation there is no option of even a remote stalemate for Hezbollah. Is that the goal? I believe that Russia saw Hezbollah as a tool for what they needed, the US has always been hostile and Europe requires high earnings, so the ECB is very much not in favour of any outspoken hostilities against anything that can downgrade their earnings, so they are seemingly steering away from these events as much as they can, yet I will admit that is just me speculating on European events in this case. Even as London is more and more outspoken anti-Hezbollah. Amsterdam and Stockholm are not taking that path. In my mind it is the liberal multicultural flag that they embrace, in that atmosphere a group like Hezbollah can easily hide under this ‘veil’ whilst hating multicultural events as much as possible.

This again has speculative sides, but it is based on solid data and events. You might think that it does not matter, but it does. As more and more nations in their liberal mindset hold off on an actual war on terror, being it for economic or philosophical reasons. Not being part of it is equally a problem down the track. So as we move back towards Lebanon and Hezbollah, we need to realise that not only will this become ugly to a larger degree, there is every chance that unless certain actions are taken the issues seen in Aleppo will be seen in Aleppo too, there is just no way to tell to what extent. In this we can look at Survival Analyses (or listen to the song ‘as time goes by’), where the point in time and the prolongation of all this is the setting on just how much Beirut will look like Aleppo in the end, time is the only factor required here and the people in Europe know this. So as we see the news prepare on how there should be talks and there should be armistices, they all better remember that it was their need for status quo that is pushing the consideration for a terrorist organisation.

Who in Europe would have ever thought that support of a terrorist organisation would be the cool thing to do on September 12th 2001? So consider that and now wonder why Europe is, for now, again sitting on their hands or even contemplating siding to the larger extent with Hexbollah? Yet there is also good news because with the actions by JP Morgan to push into large chunks of the Middle East and more notably the push towards the Kingdom Holding Company. You might think it is not related, but it is. It gives the view that JP Morgan is a facilitator for setting maximised profits and these profits are not to go towards France. There has been a thought that the US is not commitment, but as there is profit in war, the clear fallout of any war is opportunity. It seems to me that the US wants to get as much profit out of that as possible, so as the dominoes are pushed into place, we see a situation where the media proclaims JP Morgan to be a mere financial advisor. I believe that to be incorrect. Even as Reuters reported “JPMorgan is in early talks with Saudi Arabian companies about overseas listings“, that might be true, but JP Morgan has been pushing itself and its ‘friends’ into powerful places where lucrative revenues are not set in millions, but in billions. I cannot answer whether Credit Agricole did the right or wrong thing, they are pretty clever all by themselves. I think that the Saudi issues in play now are pushing for polarising fields of options and opportunity on a global scale. In this case my view will be proven over the next 2 years as we follow the money. They question is where the source will be set and who gets to fill their bucket list from that well. when the options are returned in billions there will be plenty of players, although in this instance I believe that the outside opportunities (non-Saudi based companies) are offered to the friends of JP Morgan and them only, which is again a speculation. Whether I am right or wrong will be initially shown in the next 20 weeks.

There are however facts available to see that there is a direction in place. Reuters show on part (at http://www.reuters.com/article/us-jpmorgan-saudi/jpmorgan-sees-more-saudi-firms-looking-at-overseas-listings-after-aramco-idUSKBN1D7107), some might think that “He said listings in New York, London, Hong Kong or Singapore might help increase the liquidity of these companies and make them attractive for international investors, he said” is the part that gives the goods, yet it is the part not seen and more interestingly not implied that gives power to it all. The implied part is seen with “Commenting on the anti-corruption drive, Pinto said: “If it is done in the right way and for the right reasons it is good to do for the future of the kingdom.”” It is however only the first part. The news given with ‘Saudi Arabia detains 201 princes, businessmen in $100 billion corruption probe’ (at http://www.abc.net.au/news/2017-11-10/saudi-anti-corruption-probe-finds-$100-billion-embezzled/9136608). This was not a sudden part, this had been in play for some time. It was not merely the fact that at present 201 people are now in custody. Even as we see mention of Iran and the Lebanon pressures, we see that there is a larger play. His Royal Highness King Salman bin Abdulaziz Al Saud and Crown Prince Mohammad Bin Salman Al Saud have been on a path to get the nation reformed and moved away from oil dependency. In this the pool of plenty does not last too long when 100 billion get lost one handshake at a time as more and more people are connected to unlimited resources and wealth. As the press seems to be focussing on the crown prince and the ‘wild ride’ he created, there is a larger issue that is not too much in focus. No matter what the sceptics state, There is a clarity that Saudi Arabia is seriously considering that the age of oil is dwindling, as this happens they need to be able to push into other directions and they do have the wealth to create vested interests in pharmaceuticals, consumer goods, consultancy services and educational advantages. Forbes has had its share of articles on the matter, and whilst some look at ‘Saudi Arabia Looks To The Private Sector To Meet Growing Healthcare Demands’ it seems to me that 5G facilitation has much larger and more profitable sides as other providers are considering what to do, Saudi Arabia has the option to facilitate to the largest 4 cities and exceed in opportunity what Sweden has for its entire nation. When there is such a population (9.5 million) in 4 cities, there is an option to grow and grow fast. Now we know that there is a lively market already, but the idea that other services could be added grows the Saudi options to add markets and manufacturing opportunities through investment. I all this JP Morgan is potentially the spider in the centre of the web, growing in value and wealth from all sides at the same time. There is no way to state why Crédit Agricole walked away from those opportunities, but I feel certain that they did not walk away, the merely moved to a place around the corner. Even as the Financial Times (at https://www.ft.com/content/0e629bab-494c-34d0-8fe0-f71c8b089118) show mixed results, yet I believe that this French bank is moving into different fields, acquiring other banks and setting new goals. I have no way to tell on the why of it but I feel that moving away was only one as the clever people in this bank have agreed on a strategy that allows to grow faster and on larger fields. How?

We will learn this over the next 20 weeks. Yet no matter what is done and how the banks react is not a given, the direct dangers on how things escalate in Lebanon and with Iran seems to be crucial in all of this and I reckon that we will see the shifts quite soon. These shifts will not be through armed conflict, but will rely on the pressures and stresses that exist at present. In this Europe seems to take a ‘diplomatic’ stance (at http://www.ecfr.eu/article/commentary_destabilising_lebanon_will_only_strengthen_hezbollah_7235), yet with “Europeans should veer the other way, taking measures that aim to preserve Lebanon’s stability and governance structures, and to prevent wider conflagration. Iran is clearly a key source of regional instability, and Hezbollah has become increasingly assertive in Lebanon” it seems to advocate a path of inaction, 3 decades of inaction have shown that there is no solution on that path, a stream of casualties, of non-actions and broken promises. Saudi Arabia (and the USA) both had enough, and as Iran seems to be an annoying thorn in the side of Saudi Arabia, they have seemingly decided to take Hezbollah out of the equation. This will be interesting, because the moment Hamas and Iran realise that the gig is finally up, I wonder how must tearful pleads of ‘negotiations’ will be shown on nearly every soft hearted news channel on the planet. Perhaps a recollection of March 2016 is needed. With: “Hamas on Sunday sent a delegation to Egypt in an effort to beseech Egyptian security officials to stop destroying its tunnels out of Gaza. These terror tunnels, employed by the terrorist group for nearly a decade, are used to store weapons, smuggle supplies, and infiltrate enemy territory – Israel – as well as carry out surprise attacks in which people are killed and soldiers abducted.” (source: Breaking Israel News). It reads like “please let us be terrorists a little longer, we need the tunnels to do naughty things”. There is every chance that this falls on deaf ears, because as Israel is optionally no longer pressured in possible two front wars, they can fully focus on Hamas whilst Saudi Arabia will only have to deal with Iran after that. It will truly change the Balance of Power in the Middle East with Saudi Arabia as the only true power in that region, all because to a larger extent, Europe decided to remain in a self-imposed state of inaction. After three decades they still haven’t learned that inaction against terrorists will never ever lead to any solution.

Yes, there are a few elements of speculation from my side, but it is based on gathered facts and it I do not believe it is less likely on the balance of probabilities, it is merely one optional setting in a larger game that has been played for much too long.

 

 

 

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Start making sense

I have been tossing and turning for most of the night. Something has been bothering me all day, and as it seems most of the night. You see, the Dutch NOS reported on Saturday 9th of March an interesting footnote in their newscast. They suddenly had this short part on the news on how this is possible. (Source: NOS http://nos.nl/artikel/482586-record-op-record-voor-dow-jones.html)

This is interesting, as I asked pretty much the same questions in an earlier blog called “It hurts every time, but we love it”, which I published on Feb 6th, so slightly more than a month earlier. The Dow index is currently at 14,397 (which was a 2007 record). The issue is that we had the crash of 2008; one in six in the US lost their house. So, the economy is not in a good place. There was also the mention in their radio cast (English and Dutch). They seemed to focus on two parts. First was the fact that Economic recovery is gotten through revenue recovery without staffing (so 5 do the work of 10, and they are happy to have a job). Second is that the Dow is based on only 30 companies. Yet, when we look at the number I wonder what game is being played as I look at a 2 year index graph. This graph is Stellar. My issue is twofold. One I am NOT an economist, but a data miner. Second is that the given ‘excuse’ feels wrong. Especially given that the news had this production line backdrop of cars, and none of the 30 seems to be in the car industry. So why not present this with a pharmaceutical backdrop?

So let us take a look at some of these Dow Jones Index companies.

1. Bank of America. A bank, and after 2008, we could wonder in what state it is in. This quote comes from Forbes and was written by Halah Touryalai, one of the Forbes Writers “No bank knows that better than Bank of America which has agreed to pay a jaw-dropping $42 billion, settling credit and mortgage-related legal battles in just the last three years“.

OK, if we take that into consideration, then seems a little weird that their stock graph has the same shape as that of the DOW. (As one of the 30, it would make sense that the graphs are shaped similar, however, such confidence after such a legal fee settlement bill?)

2. JP Morgan Chase. Another Bank! It had two more dips then BofA, yet overall it is in an upwards movement as well. It was also mentioned in the same Forbes article as before on settlement fees, but those fees were a lot lower. The Bank of America had to chew on 66% of the total settlement fees by itself, so for the other 5 big banks, the damage was relatively small in that regard. However, In April and May 2012 they had lost more than six billion dollars on derivative trades that had gone bad. There was a report of 9 billion in total, which also involved Bruno Iksil for part of the mentioned amount, he is also known as ‘the London Whale’. The numbers and the names vary when we look at UK and US papers, but overall they pretty much tell the same story. It is interesting that JP seemed to bounce back within 6 months to stock values higher than before the June 4th 2012 dip. Last on my list is Boeing. It is a giant, but we have all heard of the 787 issues and it’s now named ‘Nightmare liner’. The issue is all about batteries, yet the news from January as reported by Reuters : The new production forecast raised some eyebrows. Russell Solomon at Moody’s Investors Service was forecasting 100 787 deliveries and said Boeing’s forecast of more than 60 was “significantly weaker than we had expected.” Interesting that what analysts expect and what the vibe says Boeing will be delivering is off by almost 40%. Suddenly NOT meeting expectations has almost no impact? 40% less on a firm the size of Boeing should have a very visible effect (imho).

Now the DJI is about 27 other companies and there are only two banks in it. It is also a fact that these banks work with securities and values in the hundreds of billions, so are my concerns just a storm in a teacup?

It is a valid question, and I also ask myself this question. Let us take a look at the two following thoughts.

1. US debt. It is set at 16.6 TRILLION dollars. The total US debt is a lot higher. That one is $59.1 TRILLION.
Can anyone even imagine those numbers? Now consider that someone has that kind of money. To be honest is that really true? Is there a group of nations with that level of wealth? the only nation capable of owning that much is one with an abundance of oil, so basically the United Arab Emirates (UAE) is the only one that wealthy. Either the US is labelled UAE-west, or my thoughts are not that correct in this instance. So perhaps I am wrong (I will be the first one to admit that).
We know that most value trades are now done digital. It is the only way for the market to move such amounts of wealth. However, who checks this?

I have seen my share of digital forms of miscommunication by loads of people in several fields. Often they seem connected to the corporate headquarters of Bloated, Botched, Bungled and Baboon. An always newly formed enterprise, coming to a local public stock market near you. Consider that this is done on the electronic super highway. Now consider that Hackers come at a dozen a dime and greed is eternal, these last two are given facts. Also realise that ANY system can be gotten at. DARPA and the NSA proved that more than once.

The valid question loudly remains: “Who truly checks the validity of trade and the numbers they are traded at?”

2. LIBOR scandal. I wrote about it, the news has talked about it in abundance. Last week in an article by Mark Scott in the NY Times on March 5th the following was stated “The review published by the Financial Services Authority, the country’s regulator, said there had not been a major failure of oversight by local authorities, but it added that officials had become too focused on containing the financial crisis to analyse information connected with the potential rate-rigging

This is a fair enough statement (it did seem shallow in relation to the handed fines), and them be hefty fines, so why are these two events related? Well, in my mind there are two parts of the LIBOR that were in play. From my point of view there are two variables that might be played with. The first one we know. It is the interest rate; the second one is the bigger issue. You see, those percentages are linked to a total sum of $350 trillion in UK registered derivatives. That is 20 times the US national debt. If people play with one, there is every reason to suspect that they might have played with the other. So again, who controls those totals that are being traded in? If derivatives include hedge funds, swaps and forward rate agreements then we should be worried. Consider as well that the US Bank for International Settlements holds almost twice the value the UK seems to be registering.

So, we are now confronted with just in excess of 1000 TRILLION dollars. How can this even be monitored? Now let us add one more part. The US LIBOR rate is set by 18 banks. The two banks in the DJI are members. Are we all on the same page now? The third bank (Citi) is to be given a fine in regards to percentage ‘tweaking’. According to Reuters, later this year, a new set of settlements will be ‘delivered’. In their publication of March 8th by Kirstin Ridley and Philipp Halstrick it states that: “Deutsche, Citi and JPM are the banks named in regulatory circles as those candidates near the next settlements,” said the second source. So now we have both a DJI member and libor member in this illustrious ‘donation’ scheme. What else is at play?

What if the total value is not correct? What if they did not just play with the percentages, but the total package of the trade able amount? Let’s just take a fictive 5%. Mainly because I feel not so comfortable with the value they say they have and in part because I cannot even comprehend that much, as we get above the $200 trillion range. So, if 5% is taken off the total amount of over $1000 Trillion, would mean that we might all be devaluated by a total of 50 trillion dollars. That comes down to $8400 for every citizen on the planet. Did we sign up for that invoice?

It might be just be me (and I can happily live with that notion), but can bankers and financial corporations be allowed to continue on this track? We have seen clear evidence that those places cannot be trusted with even a small speckle of such amounts. Even though they NEVER broke any laws initially, LIBOR shows that some are very willing to do that. With the US on the edge of bankruptcy (or on the wrong side of a fiscal abyss), with the financial industry in such disarray, what can be done?

So when this all falls over (not if it falls over), what will we be left with?

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