Tag Archives: Wall Street Journal

March 1, 2017 · 09:15

Showing your bad hand

There was an article that nagged me, on the surface it felt like a waste of space, one of those….the government did something that does not affect most people. Now that is not an attack on the press, because that is what they do, they report things. Now, there is nothing about this report that is wrong, there is however a clear indication that a few people did not think this through, even more so, the actions give rise to a tactical blunder that should keep the members of the Special Forces Club in Knightsbridge snigger for some time to come. You see, the article called ‘Man charged in NSW town of Young over alleged missile advice to Isis‘ (at https://www.theguardian.com/australia-news/2017/feb/28/man-arrested-nsw-town-young-alleged-missile-advice-isis) is more than just a tactical blunder. Solar technician Haisem Zahab at present in Junee Correctional Centre after being arrested in Young charged with terrorism offences. So how is this person a terrorist (he is in legal definition)? Haisem Zahab, 42 was according to the info on Facebook a Solar technician. When you see the quote “acted with intent to provide Isil with the capability, with the technical capability, and high-tech capability, to detect and develop missiles“, howls of deriving laughter wash over me. I was trained with NATO gear and I reckon I would be a better fit here (even though I know how uselessly limited my knowledge is). Now consider for a moment the next article (at http://www.iran-bn.com/2016/11/29/us-iranian-citizen-convicted-for-trying-to-buy-missiles-for-iran/), which was last year, when an Iran-United States dual citizen named Reza Olangian was trying to acquire these items, not develop them. So instead of someone alerting someone at ASIS to see if a sting can be devised that allowed for Haisem Zahab to start his ‘mission’, ASIS professionals could monitor him and start setting up the operation to drain the IS bank accounts by introducing IS and Haisem Zahab to a technology salesperson with actual blueprints (perhaps ever so slightly altered) and sell this to Islamic State, the quote “the man arrested has sought to advise Isil on how to develop high-tech weapons capability” is still making me snigger, because the credible part is that he was an ‘electrician’. Oh, the tears of laughter are rolling down my cheeks! I am not sure if AFP commissioner, Andrew Colvin got Nick Warner involved, but when you consider the following quotes it might sound serious: “He said the man was allegedly involved in “researching and designing laser warning devices to help warn against incoming guiding munitions used by coalition forces in Syria and Iraq” and helping Isis develop its own long-range guided missile capabilities“, we will need to take it apart into the components.

Laser warning devices to help warn against incoming guiding munition. So how advanced is that? To give you a viewpoint. Israel has the Arrow 2 which took almost 13 years to complete (it had been completed earlier, but the tests were done over a longer period of time). The Arrow 2 is what people call an ABM (Anti-ballistic missile systems), now this was designed by group of around a dozen experts in rocket science, electronics and aerodynamics. It was a multi-billion dollar event. Even if this electrician got to a missile completed to a certain degree, which is actually not that far-fetched, because missiles have become more precise, but like mortars, the foundation goes back a long way and that part is not that complex, yet here a Dragster mechanic will get a lot further than an electrician. Now, to introduce a hidden electronic switch that turns the detector into an attractor is not that large a call, so we give IS 2-3 ‘wins’ and when we see that they implement the detection solution, ASIS throws the switch and the detector will instantly attract missiles, so with one volley their detection system is gone and likely a lot more hardware on the side as well.
as for “helping Isis develop its own long-range guided missile capabilities“, I will now take 5 minutes to roll on the floor, my stomach is giving me waves of cramps from laughter. To help you understand that part, the missile technology is not that hard. You can make a missile in your garage, but consider that HAMAS has been firing (with Iranian help) thousands of actual missiles, which included the FAJR-5, based on the Chinese exported model WS-1 MLRS. A rocket that took close to 13 years to get right and that one has had not one tactical success on Israel, how long do you think it will take to get anything up to scrap? Especially when you consider the Arrow 2 part? It would be a lot easier to develop a high tech mortar. The foundations of the mortar have never changed, to some extent, the 1450 version of the mortar is still the foundation that was used in Vietnam, what changed is that electronics allow mortars to be a lot more accurate and efficient. Now we have computers that help the aim, but it is to some extent still an art to get it right in one shot. To get the missiles correctly aimed takes a lot more and in that regard, the tactical option to have IS waste loads of cash might have been a much better approach, so when I see the photo with Malcolm Turnbull, pictured with AFP commissioners Andrew Colvin and Ian McCartney, I see a mere political quick fix! Now, we need to acknowledge that this is in all legal settings, so in that regard he had been correctly arrested. This we see in the Criminal Code Act 1995, where in 101.2 we see:

101.2 Providing or receiving training connected with terrorist acts
(1) A person commits an offence if:
(a) the person provides or receives training; and
(b) the training is connected with preparation for, the engagement of a person in, or assistance in a terrorist act; and
(c) the person mentioned in paragraph (a) knows of the connection described in paragraph (b).

This gives him a maximum 25 year governmental hotel voucher and as I personally see it, the line between consultant and trainer is thin enough to make it stick.

So we know he is going down, yet the quote “charged with two foreign incursion offences which carry a maximum penalty of life imprisonment” is different. You see that gives us “prepare to enter, or for another person to enter, a foreign country with an intention to engage in a hostile activity. Recruit persons to join an organisation engaged in hostile activities, or to serve in or with an armed force in a foreign country“, which should be fun, because the expert knowledge he offered (basically consultancy), here the Mens Rea might be satisfied, but the Actus Rea is not. Missiles are set to not need ‘another person to enter, a foreign country‘, which might happen, but is not a given, so the intent to never enter a foreign country could be achieved by the defence of Haisem Zahab, the ‘with an intention to engage in a hostile activity‘ would be proven, yet the text is ‘for another person to enter, a foreign country with an intention to engage in a hostile activity‘, the moment that the foreign border was not surpassed, the issue becomes vague and a legal victory becomes a little blurred, basically Islamic State is already a transgressor in any nation they are in, but if those governments will not speak out against that, the issue might not legally be won.

So we get a lot of press, all cameras with cowboy stories and in the meantime Director General Nick Warner was denied the option to deal Islamic State a severe body blow. Yup, there will be laughter in Knightsbridge tonight. And should you consider that I am awfully wrong (always a valid consideration to have) than take a look at the case of Omar Succarieh, which was set to 4.5 years, the appeal to get him in there longer is being heard (at http://www.abc.net.au/news/2017-01-31/omar-succarieh-sentence-inadequate-court-hears/8227068), with the quote “Justice Philip Morrison said the case appeared to be in the middle range for the offence which carries a maximum penalty of 10 years’ imprisonment“, which now gives the option of another change. You see, in the case of Omar Succarieh it was mere funds made available. If any defence of Haisem Zahab comes with words like ‘delusional‘ (an electrician making missile systems), or gets any missile expert from Raytheon or Northrop Grumman to show how complex missile systems actually are, the quote “the research he was alleged to have been doing was “credible”” could be thrown out of the window. By the way, this 18 month investigation, what INTEL did ASIS (if any) supply? I still think this was an option to do something long term against Islamic State.

Now, here we get to the title of today ‘showing your bad hand‘. You see, from where I sit, the entire situation gives rise to another matter. If we see actions as given, we are seeing a setting where political players have to admit that there is no short solution. The papers on a global scale, actual newspapers like the Wall Street Journal, The Australian and others have published papers on this and they gave us this in 2015: “But no strategy intended to defeat Islamism can succeed if Islamism itself and its violent expression in jihadism are not first named, isolated and understood“, which is at present not achieved, so this entire IS, is a long term game and there is no end in sight at present. This is extremely important, because as I personally see it, these little arrests with loads of camera’s will not bring resolution, the ability to set up shop and make IS spend their funds in all the wrong places is the first step to prevent IS to set up a successful long term strategy to develop larger weapon systems. And if you think that it stops here in Young, New South Wales, you would be wrong, because at some point, an Islamic State person will meet with dodgy types in Eastern Europe and broker a deal there. There are too many players willing to not care what happens in the Middle East and there is plenty of Russian goods all over Eastern Europe. This now implies that as some people go shopping elsewhere, and in that place they might not get a basket full of junk, they might actually end up with something useful, an idea we need to actively dread.

Because the bad hand shown and the fact that others will also realise that some players have a bad hand, only opens the doors to some places outside of our sphere of influence. I see this as a tactic badly played, but that might be just me. I will leave it up to you to decide how wrong I am and when you get a moment, ask your electrician how good his missile designs are, it could make for an interesting day and that is always a win for any person.

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Tagged as ABM, AFP commissioner, Andrew Colvin, Arrow 2, ASIS, China, Criminal Code Act 1995, Eastern Europe, FAJR-5, Haisem Zahab, Hamas, Ian McCartney, INTEL, Iran, Islamic State, Junee Correctional Centre, Justice Philip Morrison, Knightsbridge, Malcolm Turnbull, Nick Warner, Northrop-Grumman, Omar Succarieh, Prime Minister, Raytheon, Reza Olangian, Russia, Special Forces Club, the Australian, Wall Street Journal, WS-1 MLRS

January 25, 2017 · 13:20

Missed it by THAT much?

It started last night. Actually, it started a little earlier, yet I get information from so many sides, that I have to make a choice what I focus on (my final assignment for my master degree being the big number one). So when I initially heard about a missile issue I had no real interest. You see, the things PwC is up to with added narration of missed issues on Tesco, BHS and two others is a lot more interesting to me. Any missile issue tends to be a simple engineering problem. At times it is about other matters, but that is once properly tested a mere 9% of the time, with 91% being engineering or interfacing, which is basically another realm of interfacing. Oh, for the underlying entertainment. I am writing this whilst listening to The Tales of Hoffmann, which is applicable to all this on more than one level.

So back to the Lockheed Trident we go. Let’s start with the BBC (at http://www.bbc.com/news/uk-politics-38719346) with “Theresa May finds herself under pressure for refusing to answer whether she did, or did she not know that something had gone wrong with our nuclear weapons, when she asked MPs to vote to renew the costly Trident system?”

So when I see “So the simple “who knew” question will keep being asked. And for as long as the opposition parties keep pushing for clearer responses, ministers will keep looking like they are awkwardly, even shiftily trying to evade a straight question“, I feel that asking the question is a loaded canon to say the least. In this day and age, regarding any issue on nuclear facilitation, do you really want the other players to openly know that UK defence does not work, so Russia and/or China only needs to work about each other and the USA? With pressures at present it is not the best idea to say the least.

My issue is with “A missile test involving Britain’s Trident nuclear deterrent system ended in failure off the coast of Florida last year, a US defense official with direct knowledge of the incident told CNN on Monday“, so not only are US defense officials sanctimonious on the best of days. It seems that they have no problems revealing certain classified events when it concerns their allies.

OK, I can accept that, so how about I reserve a little space at the end and let the public at large know on the storage issues that PRISM is still bringing, not the observation part, but the fact that the storage as it had been one and how the list of people with access was a lot larger than anyone realises. With the New York Times bringing the people on June 6^th 2013 ‘U.S. Confirms That It Gathers Online Data Overseas‘ (at http://www.nytimes.com/2013/06/07/us/nsa-verizon-calls.html), but that the quote by Josh Earnest “has been a critical tool in protecting the nation from terror threats as it allows counterterrorism personnel to discover whether known or suspected terrorists have been in contact with other persons who may be engaged in terrorist activities, particularly people located inside the United States.” is missing one important element, which is “it equally allows the better hackers to alert certain people of red flags they can scan for“, which is not something they wanted us to know. I’ll get back to that later.

Let’s focus on those Lockheed cigars named Trident. You see, there is a question why the US spokesperson opened his mouth in the first place. When we consider (at http://www.businessinsider.com/upgraded-trident-ii-missile-being-tested-from-us-nuclear-submarines-2016-9), the quote “This was the 161st successful Trident II launch since design completion in 1989“, now I have no idea how many test launches we have seen, but 161 good strikes sounds like a good deal, so why suddenly this ‘revelation‘? I am all for fair display of facts, including failures, but the air that this one flaw gives give in addition other considerations, so if this US spokesperson thinks that the UK is grateful for him opening his mouth, I think it is time we make sure his bosses make sure he never considers that ever again. This all gets us to the reasoning of that US spokesperson.

Brown University is/was housing a Nina Tannanwald, who had an interesting essay. Titled ‘Renewing a Regime of Nuclear Restraint‘, we get “the non-nuclear weapons states of the world are growing increasingly impatient with the failure of the nuclear weapons states to move toward what are seen as their moral and legal obligations to eliminate their nuclear stockpiles. The humanitarian consequences movement, a globally popular movement barely discussed in the United States, is one reflection of this frustration with the slow pace of nuclear disarmament. A similar tension plays out in the United States, as the Obama administration committed to move towards a world without nuclear weapons while concurrently authorizing a multi-decade, trillion-dollar modernization of American strategic nuclear forces“, there is a truth in this, there is also the realisation that even as most want to move into a non-nuclear era, with Iran and North Korea in the mix, that is a reality that will not come any day soon, if ever. Time has taught us that putting the genie back in the bottle is not an option. If that is not an indication, try to interview Pandora on what happened to hope. Good luck with the answer to that one in this day and age!

Yet when we consider Tannanwald, there is more and more the need to consider Robert McNamara’s presentation to NATO in Athens laying out flexible response doctrine. I think that Robert McNamara is one of those essential Americans that show the American spirit. Serving under both John F. Kennedy and Lyndon Johnson, he has been confronted with the need to alter perspective and a dimensional scope that has been almost unheard of ever since. He is almost the founding father of policy analysis. In addition he is the person who consolidated functions that is amongst others now known as the Defense Intelligence Agency.

So you might think of him as a spooks Yoda, with a flair for pragmatism. Which gets us to the opposition in all this, namely Dr Julian Lewis, who in the Guardian stated yesterday (at https://www.theguardian.com/uk-news/2017/jan/24/commons-watchdog-criticises-unnecessary-surreptitiousness-trident-missile-malfunction) “chairman of parliament’s defence watchdog has criticised the government’s “unnecessary surreptitiousness” over the Trident missile malfunction, as Michael Fallon declined an invitation to appear before his committee“, in this we congratulate Dr. Lewis for his ability to employ a 17 letter word, yet the issue in all this is twofold. the first is that as far as we can tell this is a 1 in 161 cases, making it an outlier that could have been addressed outside of the view of the public, second that the Government had already clarified a need much earlier (which I will point out a little further, with a link off course) that there was a certain need, that need is now directly undermined. Perhaps there is a political need to get something else started and scuttling one solution will open up a set of new problems onto which certain people with interests can throw a lot of money at, they would only need to get rid of 4 submarines. We know that a new HMS Dreadnought is coming, but what is possibly less known is that a refit of the Vanguard Class should start in 2019, which will impact the defense budget because an overhaul of this kind really requires a serious amount of coins. Now, the latter part is speculation, but is it far-fetched? It is 2017, these matters take time, there is no doubt about that, so there is a gap where certain actions have a lot of impact and the misfire is just a lucky break for some people. In all this I could be, and I am probably wrong in all this. Yet when you look at the facts as they are clear, as we know that our cold war opponent has satellites, so they know about the event, calling this into the open only serves another platform. I have no idea which one, but the visibility of these events call a lot into question, especially the actions of a blabbing yank. Now, for some this might actually be one of those democratic losers with no prospect considered ingratiating himself to optional future employers in the media as this person could be democratically replaced by the new party in charge if his function was high enough and the CNN quote “US defense official with direct knowledge of the incident told CNN on Monday” implies that he is higher up the ranks to some degree.

So how does this reflect back to Trident? Well, if we accept that regional tensions are made worse regarding nuclear policies by unstable regimes where the mental balance of the one in charge leaves a lot to be desired (examples: Kim Jong-un and Mahmoud Ahmadinejad, when he was in office) , we should consider that the solution does not work, tension is not eased, it only invigorates that person to consider pressing the famous red button. This comes mainly from the premise of the thought ‘theirs might not work initially‘, which would only instigate a false sense of ego of that person pressing the button. I am going one step further stating that such a person could call in some simpleton cook, asking him ‘Can you press this button? My hand hurts!‘, so that unsavoury character now has the genuine option of remaining in denial.

Even as we consider that 2 out of 161 might not work, the stats are extremely unkind on the chances for the receiving party. Still the issue remains, what was that US spokesperson thinking off when he/she considered speaking on the matter at all was a good idea? Don’t get me wrong, I am not stating that we should be lied to, but there were clear security considerations in play and I wonder if that person was even high enough on the pay scale to make have this consideration, speaking out regarding an allied nation (read: the UK).

My view?

Well, personally, when I look into the error, I am considering that it was not a simple flaw, you see, when the missile is off by a degree, or even less. When it is that small it becomes an issue because that takes time. When the direction is off by a maximum dart score round (180), it tends to be a simple construction flaw, an interface that was not properly checked, basically, the kind of flaw that requires Lockheed (on average) to send the next missile at $0 (and they also have to pay for postage, packaging, gift wrapping and shipping too). Which would be another reason for some people not to speak, unless officially ordered to do so, as it would start an entirely different debate on the Trident Project. So in this light, as we see that 1 out of 161 went wrong, the dust cloud is very much disproportionate to the events as we see them. Even when we see the connected views on Jeremy Corbyn, who has been for the longest times in the light of ‘Jeremy Corbyn says he will put nuclear disarmament at the heart of his leadership re-election campaign‘. which is what we saw in July 2016, in September 2016 we see: “to put to one side any attempt to reverse Labour’s support for renewing Trident in a bid to reduce tensions with unions and rebel MPs“, yet that ship has sailed, so he can ‘revive’ his lifelong view of being the soul that is anti-Trident. We might see that as a decent view, yet in all that we see evolve is it the correct one? I think that there is no clear answer and this is not on Jeremy, but it all now shows to be a valid political attack, which he cannot be faulted for. Yet how to proceed?

What makes a cigar a cigar?

So this Lockheed device has several elements. I will not some conceded jerk telling you what went wrong. We can speculate that the electronics were wrong, yet what if that is actually not the case? Consider the following sources. the first (at http://www.publications.parliament.uk/pa/cm200506/cmselect/cmdfence/986/98605.htm) gives us at [40]: “‘De-targeting’ and ‘State of Readiness’: The SDR stated that the Trident missiles aboard the Vanguard-class submarines would not be targeted and would normally be at several days ‘notice to fire’. However, the SDR also noted that “we will… ensure that we can restore a higher state of alert should this become necessary at any time”. In the course of our inquiry, we were told that targeting the missiles does not take very long“, in that is it not interesting that an actual metric was not given?

In addition we get “Dr Rebecca Johnson, of the Acronym Institute for Disarmament Diplomacy, argued that both de-targeting and the reduced state of readiness were essentially meaningless since they could be could be easily overridden“, which was in the same paragraph and it gave me the part that is soon to come. You see (at https://www.gov.uk/government/publications/uk-nuclear-deterrence-factsheet/uk-nuclear-deterrence-what-you-need-to-know) we see ‘A minimum and credible deterrent‘, with the quote “we require a fleet of 4 submarines to maintain 1 continuously on patrol and retaining this posture is essential to assure the invulnerability of the deterrent“.

So, this is me speculating, the triviality that we saw regarding the ‘we were told that targeting the missiles does not take very long‘. So what if the targeting could be messed with? In this day and age, is that such a leap? If that is true and if the targeting can be messed with, the issue now becomes that Her Majesty’s Navy now has 4 cigar boxes that could potentially be regarded as useless, making them extremely expensive non-deterrents. Let’s not forget, this is pure speculation, so it becomes only the smallest of options if the missile was not malfunctioning in a normal way.

So how does this reflect on me making some other case earlier and why mention it?

Well, let’s take you through the motions, it will take a few paragraphs. First there is “NSA whistle-blower Edward Snowden has denied he committed treason with his revelations that the US had been hacking Hong Kong and China since 2009. He said his revelations did not disclose military targets – a treasonable act – only civilian infrastructure“, try and focus on the red parts in all this. The next part is “Without asking for public permission, the NSA is running network operations that affect millions of innocent people. In a previous interview with the South China Morning Post, Snowden said he was releasing the information to demonstrate “the hypocrisy of the US government when it claims that it does not target civilian infrastructure, unlike its adversaries““, which gets us part of the first part. The source is the IB Times (at http://www.ibtimes.co.uk/nsa-whistleblower-edward-snowden-479709) and they are only one of several sources.

From that same source we get “Internet companies – including Facebook, Google, Yahoo, Apple and Microsoft – were reported to have given the NSA “direct access” to their servers under a data collection programme called Prism” as well as “US government agency had access to the raw databases of these companies. “They can enter and get results for anything they want [such as] phone numbers, email, user id, cell phone handset id,”” and “Additionally, audits are cursory, incomplete, and easily fooled by fake justifications. At GCHQ, the number of audited queries is only 5% of those performed.” now we need to consider that “He was employed by several outside contractors including his current employer, defence contractor Booz Allen Hamilton“.

Now I make one step back to a statement I made some time ago. You see, there is a part that never rang true, especially as the amount of data he allegedly took with him, yet this data never saw the light of day. In addition, for one person to have this level of clearance and access is something I always questioned! On the 23^rd June 2013 I wrote ‘Who are the real watchers?‘ (at https://lawlordtobe.com/2013/06/23/who-are-the-real-watchers/), in there I wrote “his account is broken down and thousands of dollars on internal communications, price agreements, customer’s details and many more details are now duplicated. It would be worth quite a few coins for the right competitor. As such the quiet student will have all his University debts paid off long before he gets his degree. So, what is this about?“, which I bring on January 18^th 2014 in ‘Diary for a wimpy President‘ (at https://lawlordtobe.com/2014/01/18/diary-for-a-wimpy-president/) with “The government will no longer store the phone call information of millions of Americans. But he did not say who should maintain the information, instead giving the intelligence community 60 days to come up with options” as well as former Presidents Obama quote “What I did not do is stop these programs wholesale, not only because I felt that they made us more secure, but also because nothing in that initial review, and nothing that I have learned since, indicated that our intelligence community has sought to violate the law or is cavalier about the civil liberties of their fellow citizens“, the point in all this is not just the traitor Edward Snowden, who decided to become the judge, what also happened is that several sides of this went to private contractors, some of them very much greed driven. It is my belief that one event is linked. It was given on October 5^th 2016, I wrote about it, but I will not give the link. The Telegraph (at http://www.telegraph.co.uk/news/2016/10/05/nsa-contractor-charged-over-alleged-theft-of-secret-us-governmen/) gives us the parts we need. “Harold Thomas Martin, 51, was secretly arrested by the FBI in August for allegedly stealing classified information. The US Department of Justice says it found Top Secret documents in Mr Martin’s home, vehicle, and two storage sheds on his property in Glenn Burnie, Maryland during a search on August 27^th” as well as “Those documents were reportedly “source code” developed by the NSA to hack its adversaries. The codes would allow the NSA to covertly place malware in the computer systems of foreign governments and to monitor or even attack the networks“. Now, the part that comes next remains speculation!

I think that is exactly what has been happening. I think that whatever Harold Thomas Martin did get out before the NSA/FBI could lock down on it. I think that these contractors have been doing their job, but I also believe that someone has been getting access because part two gave access to part one and those people aren’t sworn in executives of agents of any government. What if we consider when we combine the ‘claimed facts‘ as published, where other parties have been gathering information from selected mobiles, and where users have been interfered with. You see, we all got the messages as seen (at https://www.nytimes.com/2016/12/13/us/politics/russia-hack-election-dnc.html), where we see “At least one computer system belonging to the D.N.C. had been compromised by hackers federal investigators had named “the Dukes,” a cyberespionage team linked to the Russian government“, so even if we question whether this is a Yay or a Nae, the issue is that the DNC is not the gemstone. Yes, most foreign governments want to see in what direction policies are likely to go. Which is why people like Marine Le Pen are getting monitored and not just by the French. You remember the earlier quote “giving the intelligence community 60 days to come up with options“? What if that has been rolled out, don’t you think that both the Russians and the Chinese are a lot more interested in access to those systems (read: that data)? Now we see the dangers that Harold Thomas Martin brought to America, the fact that these intrusion tools are in the open and possibly in Russian hands. We now see that tools can be used against their collection points. They only need to open one port and slowly siphon data away. How much damage do you think that this brings. In addition, and this last part is pure speculation, as those Tridents rely on ‘targeting the missiles does not take very long‘ yet if the specifications come from the outside, can these tools interfere with that? Do not forget that “would normally be at several days ‘notice to fire’” implies that there is a track that the targeting goes through and only the final step is the most secure one. Can we even know how secure those previous steps are? Which tools have been pushed to less controlled civilian hands due to the entire Snowden debacle? What dangers has he placed us all in? We now see via the Wall Street Journal and The Australian that what is now published in 2017, I already covered to some degree in 2013, I was correct to the largest degree all along. We see the quote “According to a unanimous report declassified on December 22 by the house permanent select committee on intelligence, the investigation showed Snowden had “removed” 1.5 million documents“, with added “based on, among other evidence, electronic logs that recorded the selection, copying and moving of files“, another issue I raised due to my knowledge of SE-UNIX. The fact that he had done this over a period of 6 weeks implies that there is a level of what should be regarded criminal negligence concerning Intelligence matters which is truly unsettling. The fact is that this stuff went into the open void, the question was who else got a hold on that stuff? The Wall Street Journal gives one part I never had (due to a lack of specific knowledge). That part is seen in the quote “Since the NSA was created in 1952, Russia and other adversary nations had been trying to penetrate its Level-3 secrets without great success“, he fact that they clearly have access to some degree, both Edward Snowden and Harold Thomas Martin have made that a near certainty.

This now reflects back to the Lockheed devices. Consider that the UK has a different methodology regarding its missiles. If a test was performed through the normal track and if we accept that the Russians have to some degree Level-3 documentation ‘access’, when we also accept that they have a clear understanding on the PRISM system now and we already know that both China and Russia can interfere with data packages (read: transmitted data) whilst in motion, is it really far-fetched that they intervened (read: corrupted) the data meant for the failed Trident test? Let me reiterate, I am not stating they retargeted that missile as there are too many components they do not control, the package just needed to be corrupt to the smallest degree, which would get the missile into a wrong destination and then self-destruct. Now, as stated, this is speculative, yet based on data which after 3 years is now proving to be utterly (read: mostly) correct. Is the speculation that far-fetched? And Russia has every reason to scuttle the UK Vanguard units now before the newer and totally unknown entity HMS Dreadnought comes into play, as stated by other academics in this field that it is ‘essential to assure the invulnerability of the deterrent‘, when that invulnerability is gone, what remains?

I can tell you that I might not be entirely correct, but I can tell you that based on 3 years of data coming true that my aim is a lot better than the latest Lockheed Trident missile, which was allegedly off by almost 180 degrees.

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Tagged as Apple, BBC, Brown University, China, Cigars, CNN, Defense Intelligence Agency, Dr Julian Lewis, Edward Snowden, Facebook, GCHQ, Glenn Burnie, google, Harold Thomas Martin, HMS Dreadnought, Jeremy Corbyn, John F. Kennedy, Julian Lewis, Kim Jong-un, Lockheed, Lockheed Trident, Lyndon Johnson, Mahmoud Ahmadinejad, Marine Le Pen, Maryland, Michael Fallon, Microsoft, New York Times, Nina Tannanwald, North-Korea, policy analysis, Presidents Obama, PRISM, Robert McNamara, Russia, SIGINT, Tales of Hoffmann, the Australian, the Guardian, Theresa May, Trident II, UK, US defense official, Vanguard Class, Wall Street Journal, Yahoo

January 19, 2017 · 14:24

Up for grabs

Have you ever considered a deal that is almost too sweet to consider. Have you ever walked straight into a room seeing that one special item thinking that the price is off, too good to be true. Yet, you look again, as inconspicuous as possible and as you do the maths in your head three times over, you start to realise that you are there, others are there but they either missed the deal, or they were looking at something else. That is where I find myself this morning. Not unlike a day in 2001, as I walked into a small obscure bookshop where I noticed the original 7 hardcover books of Tolkien’s the Lord of the rings with his autograph, the price? £39, I felt like a thief when I paid the man, he sold it with a blank expression in his eyes. I walked out shaking like a leaf and I remained in denial for at least two more days. This is how I feel now when I look at Handelsblatt Global (at https://global.handelsblatt.com/finance/goldman-sachs-weighs-deep-london-cuts-amid-brexit-concerns-685516), where I see ‘Goldman Sachs Weighs Deep London Cuts amid Brexit Concerns‘, could they actually be this stupid? Could I get my fingers on Goldman Sachs for almost literally an apple and an egg? That is a Dutch expression for selling or purchasing something for anything massively below expected price. Like buying the Ducati 1299 Panigale for only £99.95. It’s a world gone mad, and in this case Goldman Sachs will end up doing their own devaluation. Consider the facts. They move away from the central Hub London, which has been there for a lot longer than the Euro, they are now moving to Germany where there is a civil law system and the KWG (Kreditwesengesetz) is Iron Law. Whilst at the same time, its two nephews German Solvability Directive (SolvV) and German Mindestanforderungen an das Risikomanagement (MaRisk) can rock the foundations of the Goldman Sachs board in Germany in ways they have never comprehended (or so it seems). That is the move they are ‘advertising’? That article, with a picture of Lloyd Blankfein, the CEO of Goldman Sachs, like he is looking out of a window wondering where the hell his retirement is at. At that same move, we see the quote “Personnel in Goldman’s trading business who develop new products as opposed to advising customers would move to the bank’s headquarters in New York, the sources said“, so those making new products will move away from the area of the people buying it, so they either fly back and forth (impacting contribution) or work remotely alienating their customer base. So is this a serious considered move?

If so, than Goldman Sachs needs to realise fast that once their UK base is deflated to the size they claim, and when the Frexit vote passes, Italy and Germany will not have any options to keep it all afloat. More important, with logistical options diminished and having pissed off France and England, they would have to face conditions to move to France and they end up not getting a foothold into the UK to the degree they once had, because the competitors of Goldman Sachs, like Morgan Stanley would have gobbled up a few of the London links Goldman Sachs lost, in addition, CITIC who took a few body blows will be hungry for whatever Goldman Sachs left in the air as they moved to the mainland, lowering the value of Goldman Sachs overall. In that atmosphere Lloyd Blankfein needs to realise that the move is more than just a bad idea. Perhaps he does know, perhaps this is another shot over the bough to the UK telling them to play nice or else. This from a firm who in a 639-page report was accused of misleading investors and setting out to depress the US mortgage market, ensuring that it would win high stakes bets that the market would fall. That firm is playing footsie and chicken with the UK? Well, that is one that they will not just lose, it will be the act that any person with an apple and egg (preferably boiled hard) could walk into the board of directors offering that as payment for the firm. I wonder who in that board of directors will take the offer first. For the Macquarie group the move would be very nice, that group could grow a lot. They might resort to taking the small fish that Goldman Sachs left alone, but those 800 firms might not have stellar results, but they have remained stable for at least half a decade and even as we agree that stable is not sexy, it does make for a very nice secure foundation to grow on, good luck getting such results from Poland, France or Spain. and as France and Spain are founded on the local markets for language reasoning, the Frexit groups will see Goldman Sachs as a remnant of dire pasts, is that regard there is (a speculation by me) the chance that Goldman Sachs would, through the move facilitate the customers they had to port away as those clients are no longer represented through London, which still has a sizeable value to the clients they had whilst in London.

You might think that this is all untrue and that Goldman Sachs will continue in London in a diminished capacity. Well, consider that one of the largest greed driven entities is downsizing by 50%, do you think that this is merely a corporate downsize? the 50% moving away had its jobs to do, by doing it somewhere else, it is not doing in an additional location, it is doing it in another place, with a different set of admin laws and goals. If you had an accountant, and he is sacking 50% of its staff, do you think you get the same level of service, or is it possible that whomever remains in London needs to look at twice the amount of clients? And if we accept that, how much care will you receive at the same amount of annual contribution? With its posturing Goldman Sachs forgot the cardinal rule, it needs clients and clients in the UK remain, clients remain but their perception on begotten service will diminish and they will seek the firm giving them the service that they expect to receive, the time they expect to receive and GS will be only half its size with other offices in different time zones. So yes, there will be a consequence for Goldman Sachs. The offer that seems too good to be true. So as CITIC, Morgan Stanley start their campaigns, their visibility with advertisement like: ‘the firm that has been in London for the longest of times remains, and we will give the same amount of attention and resources, dedicated to you, your business and what you need‘. That firm could start up softening the Goldman Sachs clients and the moment the announcement of the move comes they just need to invite those clients to a nice breakfast meeting with a deal ready to be considered for signing. You see, the moment the move is announced and the moment Frexit will seriously start, the investors will realise that the UK market was a lot more important and when XNYS:GS hits (-4.62%), I’ll just walk in holding an Apple and an Egg seeing who in the board of directors will take the deal.

As HSBC and UBS are closing ranks with Goldman Sachs, you have to consider that I am wrong!

That is only fair. Let’s face it, I have no economic degree. Yet, when Brexit came, when it became something serious, these people were all ignoring it, they were all claiming that it would never go this far. I was proven correct and now the Financial Gravy Train is changing gears as it’s not as profitable as some expected it to remain, those people are trying to restore their Status Quo and their amount of gravy per pay check. Yet, the unfounded move, the emotional outcry of these people making no less than 50 times the average income, those people are trying to force open a dialogue and a new place of exploitation. The quote: “UBS chairman Axel Weber said that about 1000 of the Swiss bank’s 5,000 employees in London could be affected by Brexit, while HSBC Chief Executive Stuart Gulliver said his bank will relocate staff responsible for generating around a fifth of its UK-based trading revenue to Paris” is actually a lot more funny than even he realised (at http://www.afr.com/business/banking-and-finance/goldman-sachs-hsbc-ubs-all-warn-of-moving-jobs-from-london-on-brexit-20170118-gtu8cj). You see, Frexit is still growing and it is slowly becoming a realistic prospect. So when the Wall Street Journal stated 15 hours ago “A “Frexit” would likely unleash chaos across the currency union and undermine the broader EU in a way Britain’s departure wouldn’t“, we now see that those 20% revenue generating people from UBS will be on the shores of a Civil Law country whilst the confusion is only increasing. As for the other part of me being correct, we’ll have to make this small sidestep. On May 15^th 2013 (yes 3.5 years ago), I forecasted in ‘A noun of non-profit‘ (at https://lawlordtobe.com/2013/05/15/a-noun-of-non-profit) “Consider a large (really large) barge, that barge was kept in place by 4 strong anchors. UK, France, Germany and Italy. Yes, we to do know that most are in shabby state, yet, overall these nations are large, stable and democratic (that matters). They keep the Barge EU afloat in a stable place on the whimsy stormy sea called economy. If the UK walks away, then we have a new situation. None of the other nations have the size and strength of the anchor required and the EU now becomes a less stable place where the barge shifts. This will have consequences, but at present, the actual damage cannot be easily foreseen“, I made the prediction of loss of stability, in addition, a quote not from me “Movements in sovereign spreads affect CDS spreads and bond yields of Italian banks, and are transmitted rapidly to firm lending rates“, this was predicted by Edda Zoli at the IMF. Do some of you remember the issues in Italy on losing the credit rating it had is now a clear marker to consider. Even as the parameters for the Italian downturn are not matching completely the elements in play include the ones I and Zoli stated, meaning that Italy will get a few more negative bumps to deal with (not major ones though).

You still think I am that wrong? I have been involved with data cleaning for decades, I have seen the ‘weighting games‘ some played and now that the party is over, they are running for the high ground, whilst making boasts of clearing away from the market like horse traders. This is all fine, yet the players that are not as big can now shore up their levels of stability growing their overall value by a massive amount, because that is where the UK now is, its economic forecast is growing and the rash statements are doing the opposite as the competitive peers of Goldman Sachs are almost volunteering their free time to help Goldman Sachs pack up and leave the UK so that they can move in on the Goldman Sachs share, because there is no way that Goldman Sachs will not lose a fair chunk of it.

So as Frexit grows (I never expected it to be this strong at present, just a really serious factor), we now see that Marine Le Pen is now leading the polls for the first time after taking advantage of Fillon’s declining popularity among France’s working class voters. I think that this is not the only part, the increased forecast of the UK is doing equal reinforcement of the end of the Euro and perhaps even the end of the European Economic Community. Not because that was the goal, but the fact that all these small nations were too deep in debt and Italy, the third anchor is in massive problems, that large barge cannot remain afloat with only the German anchor in place. My view of 2013 is now showing to be the correct one.

Is it a done deal? No it is not. Someone with actual power in Goldman Sachs could realise that these boast fests are counterproductive and that the boasts only achieved that some doors can no longer be opened by Goldman Sachs. They would have to call, make a proper appointment and they would have to sweeten whatever deal they are hoping for, impacting their dividend in the process. Goldman Sachs played a hand that held a few Trump cards (pun intended) and without those the next few hands will need to be played extra careful and cautious. You see, they lost a little more because those playing now might not have considered 2012 Amsterdam. There we see: “De bank verloor in de nasleep van de crisis veel klanten door negatieve berichtgeving over de rol van Goldman Sachs in de kredietcrisis van 2008. De bank wil deze klanten nu terugwinnen. Het nieuwe kantoor moet vooral de dienstverlening naar klanten toe verbeteren” meaning “translated: The bank lost in the aftermath of the crises many customers through negative messaging on the role of Goldman Sachs in the Credit Crises of 2008. The bank wants to regain these customers. The new office will have to increase the service levels to clients“. This part has two sides, not only regarding clients they will lose in London, in addition, the Dutch clients had a benefit in time zones regarding London, and they will not have that with Germany. So there is more than one fish on the Barbie (read: BBQ) and the impact will be felt and smelled. You see, Amsterdam was never an option for Goldman Sachs, yet as more important reasons GS frowned at the capping of bonuses in 2013 as mentioned by minister Dijsselbloem at that time. Which is rather funny as Germany in this 2017 election year is actually moving in hard on to cap executive pay. This we got from Handelsblatt Global Edition just a week ago, so the move could potentially come with a few nasty sides for those working through the move.

OK, I will admit that Goldman Sachs might not be up for grabs, but it should be clear that if they do move, they will be receiving a few body blows and those come at a price for many at Goldman Sachs. The question however is not, if that is the hard part, the hard part comes when the winner is announced in merely 16 weeks, at that point we will see how realistic Frexit has become. You see, it is not just Marine Le Pen and Front National, Independent Emmanuel Macron, former economy minister will also hold the referendum and together they represent a lot more than a mere majority of the French population, the fact that this reverberates with the populous is an issue for too many as he is not proclaimed left or right, he places himself in the middle making the Fremainers a minority with less and less people in it. Making the move of Goldman Sachs to Germany lacking wisdom as France and the UK will have to unite in whatever trade deals they can have meaning that the UK forecast will grow faster and faster, whilst the French forecast will be less and less dire. The only one who gets to look at that label will be Goldman Sachs.

What a difference a boast makes! Could be a nice future Goldman Sachs slogan, if they survive the ordeal!

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Tagged as Australian Financial Review, Brexit, CITIC, Dijsselbloem, Ducati 1299 Panigale, Edda Zoli, Emmanuel Macron, Frexit, Front National, Goldman Sachs, HSBC, IMF, Italy, Jeroen Dijsselbloem, Kreditwesengesetz, KWG, Lloyd Blankfein, Macquarie group, Marine Le Pen, Mindestanforderungen an das Risikomanagement, Morgan Stanley, Stuart Gulliver, UK, USB, Wall Street Journal

November 3, 2016 · 09:02

I know a Japanese joke

An Englishman, and Irishman and a Japanese industrial walk into a bar, which could be the start of a joke, yet there is a very serious issue behind it. You see, when we see (at https://www.theguardian.com/politics/2016/oct/31/nissan-assurances-over-brexit-cannot-be-published-says-business-secretary) on how “the stark warning from Haruki Hayashi, president of the Japanese chambers of commerce in Britain and the European CEO of Mitsubishi, who said businesses needed more than “general reassurances” if his country’s investment presence in Britain was to be maintained” needs to take a little lesson from a firm called ‘Hypocrisy Inc.‘, when we see (at http://www.thisismoney.co.uk/money/news/article-2230999/Nissan-sells-UK-cars-Switzerland-tax-ruse.html), which is from 2012 “Nissan Motor Manufacturing, which has received tens of millions of pounds in Government grants to build cars in the UK, is a contract manufacturer for another Nissan company based in Rolle, Switzerland. The Swiss company buys the raw materials and owns the finished cars. It pays the UK business a fee that is slightly higher than the manufacturing costs, limiting the amount of profits that are declared in Britain”

In addition, this is a game that Japanese car makers have been playing on a global scale, including Australia, getting millions in grants, getting what was calculated as a $2,000 discount per manufactured car, whilst shipping tens of thousands for sale overseas. The comedy team Kim Carr and Bill Shorten (the honourable BS) from the Australian Labor party were on that merry-go-round, that whilst in week 3 of the new government blaming the Liberal party for ‘losing‘ the automotive industry. I discussed this in May 2016 (at https://lawlordtobe.com/2016/05/22/tuesday-evening-quarterback/), the UK is facing a similar situation, basically, Japanese firms are trying to strongarm a better deal, which is business minded and all fine, yet the Brexit scaremongering thing is getting on my nerves because I am fed-up with this category of ‘wanker‘ (or is the term ‘tosser‘ more correct?) that they represent. For those people I state, there was no Brexit in Australia, Japanese firms will do whatever they can to broker an increased profit any way possible, Brexit is just their latest excuse (whilst we admit that some raised items are a valid concern, there is still no certainty whether the set changes will actually impact). In interesting side that was not mentioned in this comes from Reuters (at http://www.reuters.com/article/britain-eu-nissan-support-idUSL8N1CY3QI). “The support that the UK government has promised carmaker Nissan in return for building new models in Britain could prove expensive, but the Japanese carmaker’s complex structure makes it hard to estimate“, so like Australia, whatever grant the Japanese receive, could be seen as legalising slave labour, for that is basically the setting when the grants add up to work whilst having no cost for the manpower employed. The Reuters article lights up a few additional issues, yet it also gives view that the Bremain group is still playing and pulling lines to scare the population in making them believe that Brexit was a bad idea and as such trying to swing a way to undo Brexit.

So whilst you contemplate those elements, think back to my September article (those who read it) ‘For Only the Messenger‘ (at https://lawlordtobe.com/2016/09/05/for-only-the-messenger/), where we see the Japanese Prime Minister making demands, whilst we also have the added information that he is making demands for companies that funnel sales through Switzerland, so that paying taxation is kept to an unrealistic minimum. Having cars built in the UK, whilst the grants exceed the cost of labour, whilst in addition, sales are funnelled through Switzerland giving them a 10% taxation option, gives voice to the findings of Reuters. The prestige of having cars build in the United Kingdom does not seem to bring the bacon home, the cost for this prestige is a lot more than the UK governments bargained for. So, when I see the quote “The strong intervention from the Japanese came as the business secretary, Greg Clark, claimed the government’s letter to Nissan cannot be published because of commercial sensitivity“, or is it actually a simple reason? Mainly that any person with an abacus or calculator could work out that government administrations have been giving in to car makers for too long a time at way too high a cost to both the consumer and the taxpayers?

This debate on Japanese demands is actually interesting, because the French political left is now more and more on the side of Frexit, so with Frexit now a realistic issue for 2017, we see that 128 million consumers could fall out of reach to these car makers, should they push for certain options. If Japan wants to play around and endanger an optional 18% European consumer base, that’s fine by other car builders. In my view, the push for non-taxability at any cost could be the more expensive one for Japan in the end and with their economy even more on the edge than America is, it is a gamble that they could actually end up losing. The question becomes, how scared are the UK politicians at present and have they done the clear and correct calculations on what the costs are, because paying for people to be employed is not what job creation is about.

We see similar issues with Honda, from the Wall Street Journal (at http://www.wsj.com/articles/honda-net-profit-jumps-39-1477896050), where we see net profits to $1.7 billion for the last quarter, whilst we see that tax breaks are on the clear side of delivery here. The Wall Street Journal also states “The party may grind to a halt once those tax incentives go away“, in my view the question should be, why on earth are we giving tax breaks to any player making 1,700 million dollars of net profit on a quarter?

In addition, when I see “net profit is expected to increase by ¥25 billion yen to ¥415 billion yen as a result of lower costs“, I ask here: ‘How much tax breaks represent the annual 25 billion in increased profit?‘, which is a question we should all ask, especially when we see unrealistic demands from an industry, where a single player in this industry is expected to be making 2 billion a month more. Would you not agree?

This all intersects with the exit strategies from the EU. Brexit is actively an issue, Frexit is currently a realistic change, yet the silent player in this is now Italy with a December 4th vote coming up. This vote is regarding a constitutional referendum regarding the appointment and powers of the Parliament of Italy. In the background however, the changes could also simplify any referendum on leaving the EU if that becomes an issue. The Italeave group is currently not that big, yet grew when Brexit became a reality, also the right wing groups are not that strong at present in Italy, a change that could become a lot more intense when Frexit becomes real, because it would push Germany as they, together with Italy would be the only two anchors leaving the Euro in a somewhat stable state. As I stated before, two currencies will not be able to do that, making Germany and Italy run for the hills soon and fast. Beware! I stated when Frexit becomes a reality! So there is no given, merely an increased level of likelihood, which is no less threatening.

This now strikes back to the Japanese side, because with these changes over the coming two years, any change the Japanese market makes will have other consequences as well. Consider that they suddenly get that ‘special offer’ from Slovenia or Poland. What will happen when France and the UK are out of that single market? They could make a deal together where the UK and France markets support one another whilst pushing other markets to the left. Suddenly certain Japanese dignitaries will need to explain to certain bosses of the Japanese International Trade that their hand of poker backfired, that whilst they only had 3 of the 5 cards to play. That should make for interesting newscasts in Tokyo, I just hope that NHK News will be airing those news cycles with English subtitles.

Are my thoughts realistic?

Well, that is part of the issue. The other part is that politicians on a global scale are always willing to give away the kitchen sink to be able to boast that they secured 100,000 jobs. The fact that nobody is asking what the costs were makes it even easier for them to do this. Yet overall, the consideration of cost is actively being pushed to the foreground by others, giving me a stronger case, but is it strong enough? I honestly cannot tell, but time will tell as we see the publications of concessions given to the car industry.

The question now becomes, who offered what and for what reason, because at this stage, the Bremain group and especially those with political power are eager to make certain promises (within the office they hold), whilst knowingly undermine the continuation of Brexit at the same time, so that hurdle is one we will see a few times more soon enough. So when we get back to the statement that several newspapers reported on ‘Japanese companies have already begun receiving offers to relocate elsewhere in the EU‘, isn’t it interesting that no one is making any claim that they made the offer and no one is making any report on where they might go to. In this place where ‘leaking’ reports is at the core of scaremongering, that fact does not see the light of day. The clarity is, is that the only place where there is a clear benefit to go to apart from the UK, is the Netherlands, because in the end, manufactured cars need to get delivered somewhere, so as the infrastructure goes down, the costs go up by a fair bit. That part is not given consideration to the extent it needed to have. As 50% of the created cars go into export, consider when the factory is in (for example) Germany, what additional jumps would be needed to get the cars to the same location? Sweden has a similar deal, however with out of control weather 3 months a year and additional issues with extreme cold and an additional delivery distance of 1100 miles, what costs would Japan face in addition?

Just questions that impact the decision, there might be answers, or not. What matters is that people are suddenly demanding decisions, taking away the rights that the British voters had. Is it not interesting that this all happens, whilst Wall Street is in absolute fear that Donald Trump might win? The reason to mention this (at http://www.wsj.com/articles/investors-consider-a-brexit-times-10-trump-win-1478111985) is very applicable as the Japanese profit needy corporations rely on stability, something we see here “In the past week or so, the Vix index of volatility has risen from around 13 to just under 20 points; the S&P 500 has fallen for six trading days in a row, for the first time since February 2015; and the Stoxx Europe 600 has fallen for seven days, for the first time since February“, under these conditions, Japanese car makers will resettle somewhere else?

So these three men were in the bar, the Englishman orders an English Chapter 6, the Irishman a glass of Paddy and the Japanese gentleman ordered tea. As all three look at the tea, the Japanese states: ‘If you are not drinking alcohol, then neither am I!‘ (a reference to Awamori)

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Tagged as Australian Labor party, Awamori, Bill shorten, Bremain, Brexit, Donald Trump, Frexit, Greg Clark, Haruki Hayashi, Independent, Italeave, Japanese International Trade, Kim Carr, NHK News, Nissan, Paddy, reuters, Rolle, S&P 500, Stoxx Europe 600, Switzerland, the Guardian, United Kingdom, Vix index of volatility, Wall Street Journal

September 17, 2016 · 16:11

The Taxing Delicious

Taxing delicious is a new sweet tasting Apple, even sweeter than the golden Delicious, and it is to be regarded as healthy for body, mind and government. Yes, in this case it is not a new Irish Cider (which would be a nice idea too), this is about a company getting a bill. You see, the funny part of it was that if there had been no EU, Apple would have been 13 billion wealthier. How doesn’t that beat the odds?

These are some of the thoughts rising within me again as I read ‘Apple tax ruling must be overturned, says US business group‘ (at https://www.theguardian.com/business/2016/sep/16/apple-tax-ruling-must-be-overturned-says-us-business-group).

As I see it, if it is such an issue, why not do an appeal? You see, this entire issue is as convoluted as it is ever likely to get. When I see ‘Ireland Doesn’t Want Apple’s Back Taxes, but the Irish Aren’t So Sure‘ in the New York Times (at http://www.nytimes.com/2016/09/12/business/international/ireland-doesnt-want-apples-back-taxes-but-the-irish-arent-so-sure.html), my initial response to Enda Kenny would be “Are you out of your bloody mind?” Now, let’s be partially fair. There is a method to the governments madness, yet even as giving in to big business might seem appealing, but the US is changing its taxation parameters (as well as tax accountability) and after the elections there is no way to tell how the US governments hats will be pointing, so getting what you can now is not the worst idea. In addition, when Apple et al will make the jump away and to other places, they will leave you with buildings that remain empty and will not have been paid off, so you will have a billion in real estate, whilst not having any return on investment, just empty buildings wasting away. That situation is not as unimaginative or as surreal as you might think. The idea that a government is appealing against a tax bill on behalf of a Forbes 500 company is entertaining, upsetting and obscene all at the same time, but that is sometimes how the cookie crumbles.

What is interesting in all this is how the EU courts will act, you see, if they give in now, it should be regarded as the utter uselessness of that court to begin with. It gives weight that not being part of that very expensive club is indeed the way to go, which will now give weight that Brexit was not a bad move and it will in addition fuel Frexit too. All that over a mere 13 billion invoice. Less than 5% of the costs of Greece, which fuelled Brexit to begin with. This is at the heart of the matter of what the Americans just cannot comprehend. They just received the massive blowback on the lesson that you cannot win every fight and that Economic Status Quo is an illusion that will collapse upon those believing in it.

So as we see the idiotic roundtable threaten those European leaders “In an open letter to the leaders of the 28 European Union countries, the Business Roundtable group defended Apple over its tax dispute with the European commission” and “US businesses have warned European leaders they risk a “grievous self-inflicted wound” unless they overturn Brussels’ demand that Apple pay the Irish government €13bn (£11.4bn)“, I just wonder if they even considered the stupidity of their actions. On the other hand, should those leaders cave, how stupid are the European elected officials to begin with? So as we wonder whether Randall L. Stephenson has looked into the long term issues of his act, when we see that these actions drive Frexit and possibly even Italy’s act on a referendum (although the major influences would be Brexit and Frexit), will Randall respond with a ‘this is much more complex and should not have been pushed by our, what we regard to be a righteous act‘, or will we see a spokesperson state ‘Our Chairman is currently unavailable and is taking his personal time teaching the Youth how to do a proper sheepshank‘? I will let you decide, but consider that tax accountability has been an issue for over a decade and now we finally see an actual result against a large corporation we see people backing down? Perhaps they thought it would never get that far? Just like Brexit was never going to be a reality!

Yet the Irish Times did not remain quiet and less than 24 hours ago reported (at http://www.irishtimes.com/business/technology/apple-fined-in-japan-for-under-reporting-earnings-sent-to-ireland-1.2793469), ‘Apple fined in Japan for under-reporting earnings sent to Ireland‘. So when we read “The Tokyo Regional Taxation Bureau determined that the unit, which sends part of its profits earned from fees paid by subscribers in Japan to another Apple unit in Ireland to pay for software licensing, had not been paying a withholding tax on those earnings in Japan, according to broadcaster NHK“, I just wonder who the Tax Auditor was here.

Now I am not out to make Apple the bad guy, even though they screwed me over twice! What is important is that through all the presentations and all the boasting and ego based actions, there are now 4 groups in play all trying to get Brussels to back down on a legal verdict. We need to wait the appeal on this, yet should this remain and if the US makes noise we will have clear evidence that the EU is no longer something with validity, even stronger, these events are clear signals that the TTIP is an even worse idea than initially thought of in opposition. The one sidedness aside, the fact that American business has basically become the corporate ‘bully’, we need to reassess the situation and remain clear on where our priorities are. I personally remain with the belief as I always have that the Commonwealth nations need to stick together. In these times we now see the Democratic Party under leadership of President Obama do the following “The Obama administration on Thursday took action to limit the use of foreign tax credits by American multinational companies to reduce their U.S. tax bills, a move that followed an EU order that Apple pay back taxes to Ireland“, which I think is not a bad idea. You see, Apple et al might claim how they are so investing everywhere, but that is only done (as I personally see it) to avoid paying tax in America. It is one of the massive reasons why America is so deep in debt (apart from their impossibility to manage a budget) and something has to give. If those tax dollars are used to lower that debt then I would state: “Barack, you legend you, well done!“, because an America with low debt (read: no debt), would be again the superpower it once was and currently pretends to be.

In the end, nations that have a minimal debt, these nations get to decide for themselves, not having their actions overruled by financial institutions or Large Corporation, or by Randall L. Stephenson for that matter. Yes, we can see that those moves will have impact all over Europe and not in a nice way, but that is part of the game. You cannot have it both ways that was never a reality to begin with. Now they only need to fix the holes that Mario Draghi has in his hands and we are possibly perhaps on route to get something sorted.

Yet there is one part we need to get back to and that is the verdict. You see, what is in play here is the statement “an agreement allowing Apple to pay a maximum tax rate of just 1%. In 2014, the tech firm paid tax at 0.005%. The usual rate of corporation tax in Ireland is 12.5%“, this implies that Apple didn’t just get preferential treatment, all the other players were discriminated against. When we see the parts we had already known for a long time, the fact that “Ireland’s tax arrangements with Apple between 1991 and 2015 had allowed the US company to attribute sales to a “head office” that only existed on paper and could not have generated such profits“, which was a given and the result we saw on a global scale “Apple avoided tax on almost all the profit generated from its multibillion-euro sales of iPhones and other products across the EU’s single market. It booked the profits in Ireland rather than the country in which the product was sold“, gives way that a single market is perhaps not the best solution for all but one nation and in addition to this we must realise that the solution I mentioned 5 years ago to set the tax laws that taxation should be set into the nation of the buying consumers physical location could have avoided this and many other issues. A simple taxation change that made all the difference, yet it seems that no one in legislation in those nations as well as those political players ever considered changing that simple law that could have made all the difference.

You see, as the Guardian by-line offers, this case could have another escalation soon enough “Charlie Harrington, 53, a paramedic in Cork, expressed frustration that the Irish government penalized small taxpayers but seemed ready to protect Apple“, which is exactly how millions feel in both France and Italy. If this tax case caves and Apple ends up not being due this invoice, the jump to anti-EU sentiments will go up massively and very fast so. At that point President Obama will only have himself to thank for the mess he started to create when he went 180 degrees on the corporate tax issues discussed in the ‘The Hague Summit of 2013’. That was the first step that could have avoided a few things, this case being one of them.

Cause and Effect

The question becomes ‘What will happen now?’ This is something not easily answered. At present Apple has a few other issues knocking at its door and the iPhone 7 is one of them. The population at large is less money blessed, so paying $1295 for a new phone that according to Forbes is “Purchasing the iPhone 7 this morning from my local Apple Store I found a device that is remarkably similar to last year’s iPhone 6S and the iPhone 6 from 2014. The external design cues remain, the chips inside are faster, and iOS 10 is more polished but is fundamentally the same operating system. Nothing ‘feels’ news even though the package is professional and projects a revolution that is hard to find“, this is at the heart of the matter. Trying to create waves by limiting the system, whilst overall the system is still the same is an issue and at nearly $1300 a very expensive one. That whilst Android competitors are coming into the field with comparable devices, including a headphone jack at 50%-60% of the price of the iPhone 7 and the world is starting to consider the non-IOS alternative. What Apple should fear is not just the market they are losing, the dangers that people could, in regard to the tax pressures they have and the pressure that Apple seems to be able to avoid, is one that could make them feel frustrated and vindictive. The idea that a person could think ‘If the need not pay taxation, they do not need my business either is not that far a stretch‘. People are starting to see the ethical imbalance that large corporations have impressed upon nations and in Europe where the quality of life is not that great at present, seeking the much cheaper alternative that Huawei and LG are offering is one worth considering. That could bring considerable consequences for Apple soon enough. Now I am not stating that the iPhone 7 will be a flop, but for Apple in this stage, should they lose even as little as a 2% market share, the consequence for apple will be intense to state the least. In addition, the fact that the iPad has remained a success for so long could equally be the next problem child for Apple. In that regard releasing the iPad Pro was a really good idea, yet the tablet contenders are starting to realise what it takes to be a contender and if that knowledge is applied properly, there too non-IOS devices (read: android) could start to make a killing and as such undermine that market Apple has at present. The origin is not the device makers, but Google. As Google has been pushing ‘the year of mobile’ for two years, the shift of usage is also growing. There is a growing visibility that at times the mobile screen does not cut it and it gives more and more opportunity to both Phablet and Tablet. These are all examples showing quite clearly that there is no status quo to rely on and the temporary nature of devices shows that Apple needs to really push forward in an innovative way, preferably before the makers of tablets realise that an affordable 128 GB version of an Android tablet is every bit as appealing as the iPad Pro, especially when the Android version could be a lot less than the IOS edition. With Android having its own set of quality games, Apple has more to lose than they are willing to admit to and time is slowly running out for their streak of ignorance to continue. However, it is important to note that Apple has been pretty super innovative with the iPad pro, so there is still a gap to overcome for the competitors. In that regard it is equally interesting that the Android device market have ignored that side of the consumer’s need (read: desire). In all this, it was about taxation and not on markets. Yet one is linked to the other, mainly because if there is no market there is in equal measure no taxable revenue, which gets us to the final part. You see, I have written about these issues before in one form or another and now we see that the Wall Street Journal is finally waking up to this (at http://www.wsj.com/articles/lew-is-right-on-eu-tax-grab-but-lacks-credibility-1473962171), when we read “The Obama administration has had 92 months to tackle corporate tax reform. Now that Europe is making a grab for taxes on profits held by U.S. companies overseas, President Obama is ready to use his last few months in office to address tax issues that were ignored or made worse under his watch“, my response is that neither was done, as stated in earlier blogs in April 2016, when I wrote ‘Ignoranus Totalicus‘ (at https://lawlordtobe.com/2016/04/24/ignoranus-totalicus), he refused to act (as voiced by “Senior officials in Washington have made it known“), so the non-actions are now back firing as event are now escalated. Another iteration of status quo.

What now?

This now all related to the issue at hand. IT corporations decided to maximise their profit by a consumer iterative annual approach of products. The IT market in the US nearly collapsed as it allowed for what was once regarded as a Taiwan Clone (a cheap alternative) to a quality A-brand to catch up. This is the problem with iterative thinking, when you are not in a niche market like Northrop Grumman (who at one stage actually there software patches ‘Iteration version’ I believe), you allow the market to catch up with you. ASUS caught up so and soon thereafter surpassed the original market owners. This lesson was not learned and the Telecom market decided that the profit was good in this way. So, please feel free to correct me. What happened to Ericsson and Nokia? Apple came and overwhelmed everyone and instead of truly remaining innovative, they started to largely iterate their device and called it innovation, now that LG, Samsung and Huawei have caught on and pretty much caught up, they are now offering equal, if not better options at lower prices. So how long will it take Apple to learn that status quo is merely an illusion? I reckon will see that revelation close after Christmas, after the annual sales are gone (and they will be improbable but not impossible a bit disappointing this year).

I reckon we will know in about 15-19 weeks!

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Tagged as Apple, Asus, Brexit, Business Roundtable, Charlie Harrington, Enda Kenny, Ericsson, Eu, Forbes, Frexit, google, Huawei, Irish times, LG, Mario Draghi, NHK, Nokia, NY Times, President Obama, Randall L. Stephenson, Samsung, tax evasion, taxation, the Guardian, Tokyo Regional Taxation Bureau, TTIP, Wall Street Journal

February 13, 2016 · 14:51

Looking for an Exit sign

You are on board the EEC. There are four emergency exits, Brexit on the left, Frexit on the right, each marked with a red EXIT sign overhead. All doors except the overwing doors at 3 left and 3 right are equipped with emergency funds. These funds will keep you debt dependant for decades. Yes, it sounds like the speech a flight attendant might give you as you travel from the gates of the fake economic upbeat information towards the airport of Conturbare Gentem.

There is the impulse to state ‘the real issue is’, but that is not the case here. As we see ‘Brexit ‘will be the first step of the definitive decline of the EU,’ says former Prime Minister of Italy’ (at http://www.independent.co.uk/news/world/europe/brexit-will-be-the-first-step-of-the-definitive-decline-of-the-eu-says-former-prime-minister-of-a6861326.html). You see, I have been trying to warn my readers for well over 2 years on this danger. In a few cases it was laughed off loudly, but those ‘economic wannabe’ agents are not laughing now. When I was feeling a little evil. I asked them (as they honed me in public), to explain last week’s events, how it will lead to new prosperity. They basically told me to ‘f*ck off’. They are no longer laughing. I proclaimed these events, whilst also clearly stating that I am not an economist (a fact I did not deny). This situation was for the most a simple exercise of math, basic high school math actually, interesting how an economist missed that part.

The subtitle here is also interesting ‘Enrico Letta warns London ‘would lose a lot of influence’ on world stage‘, actually, it will not. As the UK turns their economy into a stronger engine, as we see this impact, we see that both Germany and the UK will get ahead faster and faster. Italy because of their election timing could end up with the worst deal (which sucks for Italians). You see, all that rattling we hear is empty and hollow. The financial markets might threaten to leave, but they will not, should they do so, than they end up in an even worse situation. Yes, they have options, but when the system crashes, their only option for now is Germany. If they select Paris, their issues will fossilise into a brittle solution, one that impacts their markets for decades.

In Germany they will be too isolated. In all honesty, their only decent alternative is Amsterdam, yet that comes with other perils. The Dutch DNB has stronger rules in place, so in that regard Paris seems a better choice, but overall that move isolates them from a few places down the road. London will remain the better option. And it is not even close to any decision. When we see the AFP article (at https://au.news.yahoo.com/world/a/30812452/cameron-confident-of-reaching-eu-deal-to-avoid-brexit/), we also see second rate top people go all out with quotes like “pragmatism and courage… and their ability to compromise” or “my wish is that the United Kingdom is and remains an active member of a successful European Union“, which are unique examples of misdirected communication. The “a deal could be reached allowing Britain to remain in the European Union and avoid a so-called Brexit” sounds so nice, but in the end, there is still a referendum and because too many European players were sitting on their thumbs creating ‘ease and inaction’, maximising their gravy train. The people have caught on and they are not playing nice anymore. Just 9 days ago in my article ‘Intimidating the Euro‘ (at https://lawlordtobe.com/2016/02/04/intimidating-the-euro/), I mentioned the BBC article (at http://www.bbc.com/news/business-35122710), which was claiming that “Now the experts are predicting once again that the economy will return to growth in 2016, unless something else gets in the way“, so how ‘lame’ are these experts? Only a weak later we see in the Guardian (at http://www.theguardian.com/business/2016/feb/12/eurozone-recovery-falters-greece-recession), giving us “Greece fell back into recession“, oh really Captain Urban Funding? So cheap oil and the ECB stimulus was kind of pointless, was it not? So when we get these aggregated levels of bad news, explain to me how a united economic Europe is anything other than a really bad idea? One the UK should seriously consider getting out of and that will drive the immediate departure of France and Germany. The scenario I predicted all along. And for 2 years experts, the media and political players remained in denial.

Now we see added ‘news’ on how Brexit works for Putin, which clearly reads like an American, ‘communist fear’ as pressure for keeping the UK right where it is now. That does make sense, because the collapse would have an impact on US economy. The Dow Jones Index would be hit a lot harder than it was in 2004 or 2008. In my view, the EEC has no future because it will not correctly deal with the legislation to prevent the non-accountable acts of some, which was the direct reason of this mess in the first place. Greece was never held to account the way it should have. The news on ‘new’ Grexit fears as we see that there is no solution where we see that the Greek government and European creditors have come up with a credible plan to make the country’s debt sustainable. Yet the established situation that Greece cannot be evicted gives rise to additional worries, which fuels both Brexit and Frexit. The Financial Times (at http://blogs.ft.com/brusselsblog/2016/02/08/brussels-briefing-back-to-turkey/), gives more on Frexit. Yes, all parties agree that this will only happen after a referendum, yet what is not given directly is that this would be the first act by Marine Le Pen if she gets elected. Both the Hollande and Sarkozy fronts are scared there, because Marine might only get elected with a clear majority, when that happens, neither party will have any options to stop Frexit from becoming a reality. Which gets us back to that ‘Greek news’. I believe that the parties have all come to an arrangement with the fears that Brexit brought. Because the EEC exit cannot be made enforced under current EEC legislation (discussed in previous blog articles), the article, in my personal view implies that Greece will volunteer to opt out of the Euro on the concession of debt relief, with total debt forgiveness being a possibility (my speculation). What will remain unspoken is that those parties who would, if successful to keep the EEC alive, will only do so when the price is right. That implies taxation not relief on several fronts (for non-Greece nations), realistically it will be a tax that will last generations. Did the people of Europe sign up for that? A Europe that is even less accountable to a chosen few (who forgave debt)? That path basically spells out that these ‘providers’ will get their money’s worth in the form of grants and non-taxability, but at the expense of all the other European citizens. So how is Brexit anything else but a really good idea? In addition, the Financial Times reports, or better Christian Oliver alerts us to the fact that Greece took a fall for Schengen (at http://blogs.ft.com/brusselsblog/2016/02/12/greece-takes-a-fall-for-schengen/). The quote “Athens has received a list of 50 measures that it should undertake to improve its handling of the tide of refugees“, which sounds great, but it is extremely short sighted. The quote “The EU insists that Greece needs to take the 50 steps, citing “serious deficiencies” in the management of the country’s external borders” is even more hilarious. You see, that risk has forever been there, there used to be some level of control, but now we have a bankrupt nation, its requirement to cut staff by almost 66% and the need to build a collapsed infrastructure. There are mere matters of fact. Greece has thousands of miles of borders that are a nightmare to watch. With the inability to get the Syrian matters under control people are running like crazy, they either run through Turkey or the swim from island to island (either way they have a 50% chance to make it). So, how are these requirements anything but a joke, anything but a hollow requirement from the Greek government? The mere logic (and any cheap world map) shows us that those refugees had to get around Cyprus and get either via Turkey, or take the waterway directly, which is well over an 800 Km trip, taking them past Turkey most of the way. So when we consider speeds, on smaller loaded ships, it would be a 3-5 day trip past the Turkish navy, so why is the Schengen council not having this discussion with associate EEC member Turkey? You see, we can blame Greece for many things (actually, just their politicians), but the refugee wave is something Greece got overwhelmed with, even with a functioning economy it would have overwhelmed Greece. More important, how are the refugees getting to the Greek islands? This can only be done with Turkey either ignoring refugee transgressions on their territory (which is weird as they shot down a Russian jet after it allegedly invaded their airspace for 14 seconds), yet refugees that have travel past Turkish waters for days are casually ignored.

It seems to me that we are watching a new game, one that is burdening Greece on many sides, only to allow Greece to cast themselves out of the EEC/Euro for a price. A price the other taxpayers must pay for and they still hope that Brexit will be averted? Good luck with that notion!

So as the Brits and the French are looking at the exit signs to get off the plane, they are still confronted that the pilot of that plane has been massively irresponsible. Its maintenance crew has maintained the plane on the foundation of their ego and as such certain best practices, practices that a real engineer would have taken were ignored. This has led to today’s predicaments. The Brits are of mind that even in flight, getting off is more likely to lead to a survivable situation that silently staying on the plane will. When the Brits get off, the planes integrity will be permanently compromised, which leads to the events I predicted.

So now the media is giving us more and more articles on the crew giving us horror stories on what happens when someone opens that door. Yet, some of them are exaggerated. In the end the opening of the door could just force the plane down to the nearest airport where the passengers who no longer trusts the pilot could disembark. We do not deny the risks, but the current pilot is taking the plane to places the fuel reserves cannot reach.

Yet in addition to what I already claimed, the British City A.M. (at http://www.cityam.com/234438/ignore-eu-scaremongers-why-britain-would-thrive-post-brexit) gives us ‘Ignore EU scaremongers: Why Britain would thrive post-Brexit‘, which is partially the view I have. Ruth Lea, economic adviser to the Arbuthnot Banking Group gives us “a timely reminder that we are a crucial market for EU exporters – £89bn of the total £125bn goods deficit for 2015 was with the EU, £31.6bn with Germany alone. For every £3-worth of exports to the EU, Britain imported £5-worth from the EU. It is quite simply inconceivable that any German car exporter or French wine exporter would wish to see any impediments to their trade with Britain“, which I see to be a partial truth. You see, that is what it is and in the future it is what it was, but for a time, we will see European resentment and anger. Several European nations will take part of the £3-worth of exports and they will find another place in Europe to get between £1 and £2 of that export and find another source. That element is equally ignored. It will be up to that current UK government to make quick and lasting agreements that would diminish the losses, but it will again be in the hands of the UK, not squandered by EEC inaction. Should you think that my view is exaggerated, then consider recent news! How the economy grew 0.3% yet billions were pushed into it for the ‘reasoning’ of stimulus. Now consider that stimulus refers to attempts to use monetary or fiscal policy to stimulate the economy. Stimulus can also refer to monetary policies like lowering interest rates and quantitative easing. So, how was the economy stimulated? If we consider the Wall Street Journal (at http://www.wsj.com/articles/ecb-announces-stimulus-plan-1421931011), we see ‘European Central Bank to Purchase €60 Billion Each Month Starting in March‘ that amounts to over 400 billion for 2015 (6 months, Mar-Sep). The quote “the ECB will buy a total of €60 billion a month in assets including government bonds, debt securities issued by European institutions and private-sector bonds“, so how did this benefit the UK or people in general? Now to get back to stimulus, where we saw the inclusion of quantitative easing. Let’s take a look there too: “A central bank implements quantitative easing by buying financial assets from commercial banks and other financial institutions, thus raising the prices of those financial assets and lowering their yield, while simultaneously increasing the money supply“. with ‘references’ in play, in my view, the Stimulus by ECB President Mario Draghi is nothing more than a catch and refund net for bad investments, buying back a paper tiger that was not worth the paper it was printed on, allowing governments to spend again. How does that benefit the people?

These elements are all in play, because as people realise that this economy is so that the large corporations go on not being tax accountable, governments spend money on so many things that benefit everyone except the people in general. Consider how many actual problems 400 billion could solve, not some joke called ‘the EEC economy’ but broken things we could actually fix!

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Tagged as AFP, Arbuthnot Banking Group, Athens, BBC, Brexit, Christian Oliver, City A.M., DNB, ECB, EEC, Enrico Letta, France, Frexit, Germany, Greece, Hollande, Italy, Marine Le Pen, Mario Draghi, Netherlands, refugees, Russia, Ruth Lea, Sarkozy, Schengen, the Financial Times, the Guardian, Turkey, UK, Wall Street Journal

November 28, 2015 · 20:58

Fuelling a Fire that fools no one

Today we watch again how escalations in the political field are moving in separate directions. It is SBS (at http://www.sbs.com.au/news/article/2015/11/28/turkeys-erdogan-warns-russia-not-play-fire), that gives us a few items for concern.

At 1:32 we hear that cooperation between Russian and Turkish forces have been suspended. In light that a Russian plane was downed, I kind of think that cooperation was never a big thing here in the first place.
At 1:42 we hear (what I regard to be an outspoken lie) that if the Turkey had known it was a Russian plane, it would have warned it differently.

The title ‘Turkey’s Erdogan warns Russia not to ‘play with fire’’ adds to the entire article. the added quote “Moscow said it would suspend visa-free travel with Turkey” should read like sunshine in Greece, because with all the hardship, whomever from Russia can afford a vacation would usually desire the Mediterranean, which now means that they could end up visiting Greece by the boatload, which would be OK with the Economically stricken Greek population.

All this because some power players did not think things through. Turkey wanted to play games and now they are realising that they woke up an angry bear, all whilst the protection Turkey expects from USA might not come. No one wants to come to the aid of a partner as stupid as Turkey.

No one denies that the Russian flight might have taken it over Turkish soil, yet the response of a transgression of 17 seconds is beyond ridiculous, especially in light of the fact that Turkey or its citizens were not under attack. I will be the first to give way to downing any actual opponent, yet in all this, Turkey was never an objective or target. In all this, the lie (as I see it) shown on French TV gives us another side. As stated in my earlier blog (‘The additional price of War‘, November 25^th at https://lawlordtobe.com/2015/11/25/the-additional-price-of-war/), where we got the data from the Guardian that the Russian plane had transgressed over Turkish space for 17 seconds. Now understand that it should take a plane in the vicinity 5 seconds to get into position and fire the kill shot, with an additional 2-3 seconds for the missile to hit the plane. This gives the minimum required time of almost 8 seconds. Which means that in 9 seconds, the planes had to be there, information through the chain of command had to be given for the Russian plane to be shot down, which give us only one option, the planes were send out with a definite kill order from the start. This invalidates what I consider to be a massive public lie by President Recep Tayyip Erdogan, in addition, it also disposes the ‘thread’ that there was any communication between Turkey and Russia, so that red phone was massively useless. Turkey has been a joke for the longest time. They showed that when they expected a 30 billion pay off in 2003, now we see that the times Turkey became active, we can doubt whether this was against Syria or against Kurdistan. Which now take us to the introduction of the debate on the demons of idiocy that we seem to find behind some of the European charters. The first one was shown a year ago when Greece did not keep any of its promises and weaselled itself away from any agreement. It was only months later, after papers of innuendo and false rattling. I dealt with that part on July 6^th 2015 in ‘The mere legality’ (at https://lawlordtobe.com/2015/07/06/the-mere-legality/), basically the lawmakers as stupid as they were seem to forget the cancellation clause, no matter how bad Greece behaved, Danuta Hübner, Chair of the Committee on Constitutional Affairs, European Parliament, with the added paper by Phoebus Athanassiou ‘Withdrawal and expulsion from the EU and EMU‘ gave clear view that a nation cannot get expulsed from the EEC, no matter how bad they behave. Now we see with Turkey in regards to this overreaction that expelling them from NATO seems to be equally impossible. Which makes me question the stupidity of any politician who was connected to the request. How stupid will people get?

You and I cannot answer that question, we can only watch the fallout and see what happens next.

Yet, this is only the beginning. The NY Times (at http://www.nytimes.com/2015/11/28/world/europe/russia-turkey-tensions.html), gives us ““I would like to meet Putin face to face in Paris,” President Recep Tayyip Erdogan said in a speech on Friday, referring to President Vladimir V. Putin of Russia. “I would like to bring the issue to a reasonable point. We are disturbed that the issue has been escalated”“, I am not that surprised, you see, the total lunacy of shooting down a Russian plane whilst Turkey was not under attack, or even under any form of threat made the downing of the Jet an act of utter stupidity. It is not unlikely that President Obama told him that he would be on his own against Russia, so Turkey gets the play the submissive joke it should have been regarded as from day one. It is the final ‘statement’ that makes it all hilarious. He stated: “He warned Russia “not to play with fire” in reacting to the downing of the plane, adding, “We really attach a lot of importance to our relations with Russia, and we don’t want our relations to suffer in any way”“. First of all it was Turkey playing with fire, this close before Thanksgiving, now we see the added part “Turkish prime minister, Ahmet Davutoglu, said that Ankara would “work with Russia and our allies to calm tensions”“, so what tensions are they Mr Davutoglu? Apart from Turkey, NATO members are not in any dangers, as you started hostilities NATO has no need and no interest in getting involved. In the worst case scenario, Turkey will get a different flag, they will just replace the crescent moon and replace it with a hammer and sickle. The one bright spot could be that Constantinople will get its original name again and it will have its original Cathedral once more (a Coptic version I reckon). None of that should read as disastrously bad news.

Will this become the new flag of Turkey in 2016? That is the question, because no matter how we seem to stand on ego, you don’t just shoot down any plane like that, not in the frame of 17 seconds, not when there is no threat of any kind against that sovereign nation. In addition, there would not be enough time to warn the plane against transgressing on Turkish airspace and then fire on the plane. 17 seconds is not enough time and warning a plane whilst still over Syrian air seems pointless. Yet, like Greece, Turkey might bank on the fact that he can’t get thrown out of NATO, just like Greece could not get thrown out of the EEC. This makes for a much larger issue, because if the smaller players are suddenly resorting to ego based activities whilst they indiscriminately continue to target their own political ‘opponents’ we have to start asking the serious questions no one tends to ask at present.

How could this have been allowed in the first place?

That answer is a little too complex to answer, yet I feel certain that part of this is linked to the fact that not governments but large corporations are in growing command of the nations involved does have something to do with this. The entire financial debacle is at the centre of this, as Turkey would never have don that if the US would have been in a much stronger economic position, but it is not and as I see it, which is part of the problem.

In addition there is an article from April 2015 which was in the Business insider. The title ‘Turkey is ‘making NATO very uncomfortable’’ (at http://www.businessinsider.com.au/turkey-is-making-nato-very-uncomfortable-2015-4). the issue here is “Turkey’s push to carve out an independent foreign policy and purchase arms from countries outside of NATO is raising concerns among members of the defensive military alliance, Emre Peker reports for the Wall Street Journal“, so even as there are certain rules to this game, turkey has been ignoring them for well over 7 months, so why should Turkey be regarded as a NATO nation? It’s not like they are connected to the Atlantic Ocean is it? The additional “a military deal with a Chinese company could open NATO’s door to espionage, especially given that the company is on the US proliferation list“, which might not account for much, but China has been regarded as a ready wielder of industrial espionage on many levels and not just by the US, so we have more than one issue with Turkey and as such, the question becomes why allow Turkey in NATO? I wonder if NATO might be better off with Russia and not Turkey in NATO (yes, just allow for the idea for a second, the hidden gem might just pop up). It is not even the worst of the transgressions according more sources than just the Business Insider. There is the sponsoring of Hamas, the support to hunt down Kurds and ignore ISIS altogether. All of these facts bring into question the reasoning of keeping Turkey as a NATO ally. As far as I can tell, should this come to blows, once Turkey loses its EEC and NATO privileges, once it realises that ISIS oil is not reliable and as it realises that other funds mainly came from Moscow, whatever is left will not sustain the Turkish Nation, that part might become food for thought soon enough, even as winter is coming, next summer will show the consequence on irrationally and irresponsibly downing the Russian jet. Consider that the Turkish Deficit is partially contained by tourism, with the 25% of its tourism in danger (Russian tourists) how will Turkey get by in 2016, because that deficit would grow beyond expected percentages. The Russians have always been very nationalistic, which would drive them towards Greek shores with the greatest of ease. So a loss of 3.3 billion is only the beginning. If Russia employs a Turkish border ban and those trucks end up having to go via Iran or Armenia/Azerbaijan, the profit margins will evaporate giving additional blows to the Turkish economy (source: http://www.bloomberg.com/news/articles/2015-11-26/turkey-without-russian-tourists-strikes-economy-where-it-s-weak). In addition we see the speculation that Russian suitcase trade (tourism purchases) exceeds 6 billion, which is 0.8% of their current GDP, which will push debts even further. So as we get to 2017, the Turkish economy might not be close to breaking even. All this for mere ego? That remains the question because there was no tactical reason to down the Russian plane, there was no defence reason for downing the plane, in that light only ego seems to remain. In final addition to this, it is of course only the beginning. As Germany and the US removed their patriot systems from the Turkish borders, those Chinese defence systems will become very essential to the defence of Turkey and they are not that cheap. The Chinese HQ-9 (if that is the one they ordered) has a price tag that is around 3.4 billion for Turkey, which is according to the latest gossip 3 billion for the missiles and hardware and roughly 370 million for an English/Turkish translation of the operating manuals. So even in the world of weapons, knowing additional languages pays off nicely.

So how are we fuelling events? That question becomes a lot more pressing when we consider the original ‘The North Atlantic Treaty (1949)‘. Here we see in article 4 “The Parties will consult together whenever, in the opinion of any of them, the territorial integrity, political independence or security of any of the Parties is threatened” and article 5 “The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defence recognised by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area” (at http://www.nato.int/nato_static/assets/pdf/stock_publications/20120822_nato_treaty_en_light_2009.pdf). Now consider article 5, no armed attack occurred, at no point was Turkey even under attack or under the impression of attack, a 17 second border transgression is not an attack. That remains in the core of this. This means that if Russia retaliates now, Turkey might stand alone, which is not what they hoped for and gives rise to the question “How could Turkey have been this stupid?”

That is for you the reader to ponder on, so enjoy your thanksgiving as the Russian are. They are apparently having Turkey, both deep fried and roasted!

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Tagged as Ahmet Davutoglu, Business Insider, Chair of the Committee on Constitutional Affairs, China, Chinese missile, Danuta Hübner, EEC, European Parliament, HQ-9, Industrial Espionage, Kurdistan, NATO, NY Times, Phoebus Athanassiou, Recep Tayyip Erdogan, Russia, SBS, Syria, The additional price of War, The mere legality, The North Atlantic Treaty (1949), Turkish prime minister, Vladimir V. Putin, Wall Street Journal, Withdrawal and expulsion from the EU and EMU

September 27, 2015 · 00:26

What news is news?

There are several pieces, not just in the Guardian, the BBC, the Independent or the Times. They all tell us that they have news, but do they have any actual news? The Guardian shows us a tech article (in the Tech section) called: ‘the node pole: inside Facebook’s Swedish hub near the Arctic Circle‘, all innocent news, one could surmise that it is just a space filler. Or was it done to give extra view to the article ‘Facebook is making more and more money from you. Should you be paid for it?‘, or perhaps to give extra light to ‘Facebook case may force European firms to change data storage practices‘, which I gave my views on in my previous blog. You decide!

In the business section we see VW to get some centre stage, which makes perfect sense and that is just the Guardian. The independent also has a go at Facebook, but now has a go at its users, well, actually it is not the Independent, but the employee tribunal. Now the article shows all kind of signs of bullying, which is never OK and in that regard Rachael Roberts has a real case, but in light of the events, Mrs Bird does not seem to be a friend of Mrs Roberts, so why is the act of unfriending on Facebook the killer? Yet it is the quote “But employment lawyer Josh Bornstein told ABC news the unfriending incident was found to be workplace bullying in the context of several other issues“, which baffles me, if they are not friends, one or the other could unfriend the other party, that part seems clear cut to me, not bullying. So out of the 18 allegations of bullying in total, the unfriending in Facebook took the cake? It does not add up to me!

In addition we see two whole articles on Facebook being down and oh yes, the new iPhone is for sale! Let’s not forget the fact that the iPhone now allows for sextracking. So, parents buy your boy or girl on of these bad boys so you can find new ways on how you are about to become a grandparent! Really? You need to keep scores on your phone now? Didn’t Ashley Maddison teach you anything regarding sex that is on the internet, everyone will know soon thereafter?

Finally they also gave visibility to ‘Hospital apologises for removing RAF sergeant from A&E because uniform could ‘upset’ patients‘, which is a can of worms in its own right. In that light I expect the NHS to move all drug and binge drink casualties to their basement as not to invoke bad thoughts from the Presbyterian community. How insane was the idea to move a wounded RAF sergeant in the first place!

All these events, some are actually news, but no one seems to have any balls. No one is looking at Pricewaterhouse Coopers. Which of course ties in nicely with the words of the Dalai Lama ‘Dalai Lama on Britain’s policy towards China: ‘Where is morality?’’, the answer might not be such a high moral one, it goes a little like “Who is willing to suck the smallest extremity for the good of one’s career?”

To some extent we can accept that the SFO is silent, only to the smallest extent. You see Tesco is dealing with a write-off of £6.4bn, which of course is massive. We have seen all the news on how some former Tesco entities are getting grilled (as they should) but the press on many levels in many nations keep on rehashing the old news and no one is digging into PwC. No one is digging there. Does that not sound awfully weird? Yet here is the kicker, we see more and more messages like ‘Multinational tax avoiders targeted’, with quotes like “while the American Chamber of Commerce in Australia warned about throwing up new hurdles in what is already a high-cost economy. The chamber’s board includes representatives from ConocoPhillips, GE, Boeing, PwC and Exxon Mobile“, yes it seems it is never a good time to go after tax avoiders (not to mention the impact it has on the bonus benefits for those working in that part of the financial branch).

Before you whisk this away as mere banter (which you are of course allowed to do), take a look at this article that is a little over a week old. It is from the Wall Street Journal, which I do not look into too often. The article (at http://blogs.wsj.com/cio/2015/09/15/the-morning-download-identity-theft-key-to-attack-on-cisco-routers/) called ‘The Morning Download: Identity Theft Key to Attack on Cisco Routers‘, starts with: “Good morning. The international attacks on Cisco Systems Inc. routers, disclosed earlier today by security firm FireEye Inc.’s Mandiant unit, began with the theft of legitimate network credentials. Securing and managing the identity of network users continues to be a massive challenge for CIOs and CISOs and ultimately, the CEO and the board. The attacks have been named ‘SYNful’ because of how the malicious software moves across routers using their syndication functions “Cisco said SYNful did not take advantage of any vulnerability in its own software. Instead it stole valid network administration credentials from organizations targeted in the attacks or by gaining physical access to their routers,” Reuters reports today. Mandiant said in a blog post that it had found 14 instances of router implants, which replace Cisco’s operating system”

Now, to complement that statement, I will add the following. On June 5^th (more than 3 months before the WSJ article), I wrote ‘In reference to the router‘ (at https://lawlordtobe.com/2015/06/05/in-reference-to-the-router/) , here I stated: “Soon thereafter no more firewall, no more routers, just the bliss of cloud servers and data, so much data!“, which reflected on the article I wrote on February 8^th (more than 7 months before the WSJ), there I wrote “I think that ‘hackers’ have created a new level (as I mentioned before). I think that Cisco IOS was invisibly patched“, (at https://lawlordtobe.com/2015/02/08/the-next-cyber-wave/). I was literally accused by some to be insane, there was no way that this would EVER happen. Now we see in the Wall Street Journal: “Mandiant said in a blog post that it had found 14 instances of router implants, which replace Cisco’s operating system“, interesting how I am now proven correct. Are the members of the Baboon family (usually found in the FBI) reconsidering their North-Korean option? Let’s face it, this took top level skills, we can (as I pointed out in the past) find those boffins in the US, UK, FR, the FSB and Chinese Intelligence, however in North Korea not that much!

The Reuters article shows a lot more (at http://www.reuters.com/article/2015/09/16/us-cybersecurity-routers-cisco-systems-idUSKCN0RF0N420150916), however, they are just rehashing something I stated for almost a year, the quote ““That feat is only able to be obtained by a handful of nation-state actors,” DeWalt said, while declining to name which countries he suspected might be behind the Cisco router attacks” adds to my view that I was correct all along (finally another ‘I told you so!’ opportunity). The only difference is, is that DeWalt includes Israel, I have no real quality data on the Israeli cyber capabilities, so I am willing to give him that one. Finally we should consider the quote “Infected hardware devices include Cisco routers 1841, 2811 and 3825“, which is fair enough, yet in my article I offer the option that the CF unit found in nearly EVERY router could also open doors, so the danger could in theory go far beyond those three routers.

I also stated that my thoughts were based on sound speculation. You might wonder what sound speculation is. Basically, it means that even as I might not have them skills to program, I do understand that my solution is viable, the fact that routers are getting programmed with a new OS is clear evidence of that. In addition, it also gives weight to two infestation systems I speculated on as well as the weakness that those believing in the cloud are not realising at present. I was willing to look beyond the veil, a side everyone ignored. Yet when a router can be reprogrammed to the extent it was, also clearly means that data in motion is no longer safe, which means that pretty much any cloud data can be gotten too, the user only has to access the file to make that happen.

I even had a thought on dealing with the Iranian glow in the dark power plants when the time is there, just by thinking out of the box. It does involve a Piranha valve (which actually already exists in name, but mine is so much cooler). None of this is newsworthy, speculative opinion one might state. Yet in my speculation, I have shown solutions to be real in several occasions and in addition to that I also clearly outlined long before the press decided to show the minimalistic amount of balls (read testicles), that a look into Pricewaterhouse Coopers was adamant. It seems that apart from a December 2014 message from the SFO (rehashed by nearly all papers) not much happened, apart from that news, the press at large stayed clear of mentioning PwC and Tesco in one sentence. Is that not utterly weird?

Of course the luggage of someone’s mum in Tenerife (shipping at £122) gets front seat exposure, yet, the issue on £6.4bn getting lost due to assistance (better stated too weak opposition) by Pricewaterhouse Coopers seems too trivial to keep pressure on. Way to go Consumer Champions, Money! I actually mean that! They did do a good job and they have done so in the past, yet I fear that a letter by Dave Lewis on how his firm lost £6.4bn as the keeper of his books was not prudent, or is that tenacious enough to ring that bell very loudly when things looked too odd. Will Consumer Champions find that money? Will they write “Pricewaterhouse Coopers must accept responsibility for the signing off on books as the “accountant”?” Consumer Champions might not get this done, which is fair enough. It should not be on their plate, but the parties this should be very visible on are also not doing anything as far as we can tell, they remain silent, they remain this silent after 9 months.

Yet in all this there is one part both the Guardian and the Independent are getting right. It is the news on the NHS, there are massive problems and knowing them all is essential in finding a solution. In this matter the press has played a good role. In my view exposing former and current politicians a little more on the political game they play, so that we all understand that a proper solution is needed and taking the politicians out of that equation might not be the worst idea, the end result stays the same, the NHS is now too close on the edge of collapse to be acceptable, yet where lies the solution? Although I understand the issue the Independent shows, I partially disagree. The headline ‘New NHS junior doctor contract would discriminate against women, senior medics warn‘ is not incorrect (at http://www.independent.co.uk/life-style/health-and-families/health-news/new-nhs-junior-doctor-contract-would-discriminate-against-women-senior-medics-warn-10516885.html), yet in all fairness, the quote “Under the new contract, trainees who decide to work part-time would see their pay increase more slowly than their colleagues” is a can of worms! Why would my co-worker doing 32 hours get the same raise as myself working 60 hours? (Remember, I am not a doctor). A choice was made! Yet, there is a level of fairness here too. Which means that to tackle it should be done in another way. Even as there is a shortage, the burnout of physicians is a known issue and making a maximum of 40 hours a week a mandatory status could be close to the only solution. Perhaps we have been too indulged, perhaps some options should only be there during the week. Perhaps the change to healthcare is essential (like hiring 40% more staff), but we also accept that at current not one government remains to afford that change (well perhaps Easter Island where there are less than 10 doctors). In the end the system has been ignored for too long. Too many politicians are on the ‘let’s get the computers up and running‘ whilst they know that staff will remains a problem for a long time.

That is news! That is what matters, but too many papers and too many news broadcasts are about the emotions and not the actual news that matters. That might be an incorrect view and a very biased view. It might be that some news is more important than other news parts, I will instantly agree, yet in all that the complete silence from pretty much all the papers regarding Tesco and some involved book keeping parties remains a mystery to me, how is that part not news? We will see more events that will not get the proper light in newspapers, both in paper as well as online, I’ll let you decide how that measurement applies to an involved party to events that started a £6.4bn downgrade.

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Tagged as ABC, Ashley Maddison, Boeing, China, Chinese Intelligence, Cisco Routers, Cisco Systems Inc, ConocoPhillips, Dalai Lama, Dave DeWalt, Exxon Mobile, Facebook, FBI, FireEye Inc, FR, GE, Iran, Josh Bornstein, Mandiant, NHS, North-Korea, Piranha valve, Pricewaterhouse Coopers, PwC, reuters, SYNful, Tesco, the FSB, the Guardian, The Independent, The Morning Download, UK, US, Wall Street Journal, WSJ

September 24, 2015 · 22:06

Imperitos idiot

This is a view I have had for a while, it is a view that I have advocated on more than one situation, yet business remains silent, deaf and as they hide in ignorance they are limiting the options they have, in the future and in an acted decimation of one’s own future. The information in the Guardian (at http://www.theguardian.com/us-news/2015/sep/23/us-intelligence-services-surveillance-privacy) shows a title ‘Facebook case may force European firms to change data storage practices‘ that questions certain elements. The quote “a court accused America’s intelligence services of conducting “mass, indiscriminate surveillance”” in the first paragraph is the act of alerting, but is that all?

The Case C‑362/14 Maximillian Schrems v Data Protection Commissioner is the calling entity here. A request for a preliminary ruling.

Let’s take a look at the elements. We see at [25] Mr Schrems lodged a complaint with the Commissioner on 25 June 2013, claiming, in essence, that the law and practices of the United States offer no real protection of the data kept in the United States against State surveillance. That was said to follow from the revelations made by Edward Snowden from May 2013 concerning the activities of the United States intelligence services, in particular those of the National Security Agency (‘the NSA’).

[35] Nevertheless, according to the High Court, the revelations made by Edward Snowden demonstrated a significant over-reach on the part of the NSA and other similar agencies. While the Foreign Intelligence Surveillance Court (‘the FISC’), which operates under the Foreign Intelligence Surveillance Act of 1978, (18) exercises supervisory jurisdiction, proceedings before that court take place in secret and are ex parte. In addition, apart from the fact that decisions relating to access to personal data are taken on the basis of United States law, citizens of the Union have no effective right to be heard on the question of the surveillance and interception of their data.

This all goes back to ‘the revelations made by Edward Snowden‘. I have forever had issues with the ‘revelations’, too many holes, too many issues that from an IT perspective are a given no no. In addition, it assumes a level of ‘openness’ within the alphabet group that does not exist. Such openness has never existed, yet the press and many others have been very willing to blindly accept the events of Edwards Snowden, yet the data was never made bare, the data is filtered and was largely ‘stamped’ as complex, as too dangerous. Yet proper analyses of the data was never made by any person that could be regarded as trustworthy. For now, to underline what comes, I will give you this quote “An intelligence operation is the process by which governments, military groups, businesses, and other organizations systematically collect and evaluate information for the purpose of discovering the capabilities and intentions of their rivals. With such information, or intelligence, an organization can both protect itself from its adversaries and exploit its adversaries’ weaknesses“, the source is not important right now, the impact will be discussed, yet before I do this I want to continue the other elements I started.

Now consider [224] where we see “In addition, the Commission expressly acknowledged at the hearing that, under Decision 2000/520, as currently applied, there is no guarantee that the right of citizens of the Union to protection of their data will be ensured. However, in the Commission’s submission, that finding is not such as to render that decision invalid. While the Commission agrees with the statement that it must act when faced with new circumstances, it maintains that it has taken appropriate and proportionate measures by entering into negotiations with the United States in order to reform the safe harbour scheme“.

Now consider the following thought by transforming the quote: ‘there is no guarantee that the right of citizens of the Union to protection of their data will be ensured‘ into ‘it will be certain that the right of citizens of the Union to protection of their data will be unsuccessful‘. The issue is that moving data will open up a massive amount of dangers, data instabilities and data security hazards. Too many players within the EEC and other places all want their fingers on the data so that they can get a foothold of power. It is THAT simple in my opinion!

All these nations wanting access to data, setting up corporations, all trying to make a quick buck whilst during political manipulating, the security of our data will be available to anyone offering 39 pieces of silver. Before you start listening to people with nice PowerPoint presentations and long winded explanations with considerable non liability asterisks on how this is so not possible consider the following events (at http://www.informationisbeautiful.net/visualizations/worlds-biggest-data-breaches-hacks/). Ashley Maddison might be the most sensual one, but also the most embarrassing. In that same light we can see 145 million records of EBay, Sony, Heartland with 130 million and that list goes on for a long time. So the last thing I want to see is our data in the hands of some ‘seemingly’ ignorant individual, whilst completely unexpectedly and totally against ‘protocol’ the data will make it into the hands of third parties. Now I go back to that other quote, which I will paraphrase: “An intelligence operation is the process by which businesses systematically collect and evaluate information for the purpose of discovering the capabilities and intentions of their rivals and exploit the weakness of its adversaries“. This is what I foresee. This is why the crying over the NSA, whilst handing over health data to parties too unprepared to properly protect that data is more than just a big farce. Now we need to look at two sources. The first is the Guardian on the 28th February 2014 (at http://www.theguardian.com/society/2014/feb/28/nhs-data-will-not-be-sold-insurance-companies-jeremy-hunt), which gives us “Health secretary to provide assurance that confidential information will not be used for commercial insurance“, now Wired three days before that reported (at http://www.wired.co.uk/news/archive/2014-02/25/insurance-companies-buy-medical-records) “Details relating to hospital admissions from 1989 to 2010 were given (for an extraction fee) to the Institute and Faculty of Actuaries. The 13 years of data covering 47 million patients were given to the professional body to help them ‘improve accuracy in pricing’ of insurance“, yet all insurance is commercial, so as data goes, it is out there and too many players want a slice of that pie. Forcing more personal data into any open direction is beyond dangerous. That part can be constructed from http://www.wsj.com/articles/more-health-care-insurers-seek-big-premium-increases-1433206078. “Blue Cross and Blue Shield of Illinois is looking to raise rates by averages of 29% or more. In Pennsylvania, Highmark Health Insurance Co. is asking for 30%, according to proposals submitted by insurers for the year ahead. Around the country, some of the main market leaders are looking for double digit increases“. What do you think in all honesty will happen when they get the option to make healthcare unaffordable to all or unaffordable to some. Data will become the compromise and that danger is a lot larger when it is in the hands of ‘other’ third parties whilst the law is unable to deal with the issues at hand. The US has some strict rules in place that barring national security cannot be broken. Now we see a push towards fields where these levels of security do not stringently exist. What do you expect will happen? And healthcare is not the biggest slice of it all, just the most visible one.

In all this there are issues on both sides, yet at the core the pushed fear for governmental access is a fake and an illusionary one and it is shouted the loudest by people who have a little too much to hide. Hiding for the sake of their ego, their acts and/or the need for continue or renewed satisfaction of greed. Yes, I agree that my view is polarised to some extent, I agree that my view has flaws, but I approach it from a clinical side, whilst the others are all hiding through the shouting and claims set behind the emotions, the push to fear.

In all this I have yet to see the cold light of evidence that the alphabet group is disserving the people. The link to movies and conspiracy theories, nearly all of those claimants with their own agenda, sometimes badly hidden. Yet, in that light, is my view not too conspiracy theory set? I ask that of myself too, because without that consideration it is just a viewpoint. It will remain a viewpoint no matter what, yet consider that when you seek ‘NSA transgressions’ you find very little acceptable news events, with this I mean events that are of a decent level of report. When we look at data transgressions from other parties, that list is growing at an almost exponential rate and the size of the transgressions seems to be increasing, shifting data all over the place is not my first idea of safety.

Is it your choice?

When you decide and it goes wrong, you only have yourself to blame and as I see it, you lose all rights to complain when (not if) it goes wrong.

The next iteration of our lifestyles that what happens over the next 2 generations will all be about data and who has control over it and who gets access to it, which is not freedom.

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Tagged as Blue Cross of Illinois, Blue Shield of Illinois, EBay, Edward Snowden, EEC, Foreign Intelligence Surveillance Act of 1978, Heartland, Highmark Health Insurance Co, Institute and Faculty of Actuaries, Jeremy Hunt, Maximillian Schrems, Maximillian Schrems v Data Protection Commissioner, NSA, Sony, the Guardian, Wall Street Journal, Wired

August 5, 2015 · 23:46

Fine, Finer, Fined

My mother always told me (when I was young) that I was allowed to swear, as long as I did it grammatically correct. Little did I know that mommy made me paint myself into a corner! Ah well, the innocence of youth!

So when the board of directors of the Royal Bank of Scotland learned their usage of adjectives, comparatives and superlative was only correct in theory. First the bank was doing fine, then its position was much finer, only to get fined in the end. Did they realise that the year 10 student in the corner, the one who did not get it, was the one person making an accurate prediction? I’ll bet you tuppence that they never realised that Mr Dunsel was an actual fortune teller.

So, why am I going in this direction?

Well, consider the article ‘RBS share sale explainer: why has Osborne started selling taxpayer’s stake at a loss?‘ (at http://www.independent.co.uk/news/business/news/rbs-share-sale-explainer-why-has-osborne-started-selling-the-taxpayers-stake-at-a-loss-10437095.html), whilst we heard that the taxpayer lost another billion, due to, I reckon you know what comes after this uncomfortable break: “RBS shares are still trading 33 per cent lower than the Labour government paid for them, which means selling them has incurred a loss for the government of around £1 billion on the first sale of 600m shares“.

As the Guardian reported last week that ‘RBS expects further fines with no let-up from regulators‘ (at http://www.theguardian.com/business/2015/jul/30/royal-bank-of-scotland-expects-further-fines-dividend-delay), we see that not only is the selling of shares costing the taxpayers a billion, the £1.3bn of charges to cover fines and compensation payouts seem to sting a little more than we bargained for. A few of the reasons why the buyback of shares will not happen until 2017, with a decent chance that more hardship will be burdened upon them payers of taxation. So when I see a quote from Sir Philip Hampton stating “The industry as a whole has got a poor track record in predicting these [provisions]. We’ve consistently under-called them”. Can anyone explain to me why the people at RBS are allowed to nag? Consider the quote “the long list of mistakes from the past continued to catch up with the bank” and compare it to the BBC article (at http://news.bbc.co.uk/2/hi/business/8392147.stm), which was from 2009 which gave us ‘RBS board could quit if government limits staff bonuses‘ with the quote “they say they have to remain competitive in the market in recruiting senior executives“, which is nice when it deals with the bonuses that go into the millions, but when we see that it is linked to years of inadequacy, mistakes, fines and prosecutions, we need to tailor a solution where some of these bankers need to be barred for life from entering the financial sector. So when we learned in February 2014 that ‘RBS pays out £588m in bonuses despite suffering £8.24bn loss‘, we need to ask a few really serious questions, now that the shares are sold at a massive loss and the total sale could result in total loss of £15bn. I feel certain that I could do a better job, whilst not having any economic degree.

So as a large portion of the UK is in a state of hardship, the failing RBS constituency still makes over half a billion in bonuses. The aftertaste is far beyond bitter, so why get back to all these matters, which in some case is a repetition of events that had passed?

In the first, as I see it, these board members failed, the value of the company is down and as such, in sight of “We’ve consistently under-called them“, they are not due any bonuses until December 2016 and only if the value of the bank is back on par with the share value at which the government bought them. In addition, the news ‘Hedge funds make quick buck after getting wind of RBS stake sale’ from the Financial Times only adds to the bitterness of the taste of shares with pepper and salt. In my view another reason why the bonus of board members and RBS bankers should be set to £0. In addition, as Sir Philip has been around since 2009, whilst getting a not too uncomfortable £750,000. The need for not letting up on allowing the bankers any extras should be considered. So if they would like to retry their bluff of December 2009, where they stated “threatening to resign“, let them. Why does the RBS have any need for employees “consistently under-called them“, whilst at the same time fines for ‘rigging’ are banging the corporate coffers of the RBS, leading to damages that total into billions.

So when did you have a job where the company needs 45 billion from the taxpayer, they have not returned into a state of grace and they still get a 7 figure Christmas present? I never had a job like that. To change my luck, could Sir Philip kindly give me one? I need £8m over the next 3 years (for reasons of retirement). I am willing to do anything legal, including working my bud off to return the RBS to profit. From my point of view, I offer something more than the RBS board ever delivered (well, since 2009), so we can agree that my value is better than their value, ain’t it?

But this is not about me, this is also to a lesser extent not about the board members. This is about the engine behind it and the changes they are about to face. You see the sounds have been there, the rumours have almost forever been there and on the sidelines the links have been there, but what is this linking?

I am referring to the following events ‘Auditors go high-tech to win new business‘ (at http://www.ft.com/intl/cms/s/0/183cb13c-2557-11e5-bd83-71cb60e8f08c.html), where we see “Auditors have a newfound zest. Rapid developments in digital technology and new rules requiring large companies to invite bids for auditing work at least once a decade have forced accounting firms to refocus on winning new business” and ‘Accountants warn on audit market reforms‘ from last November where we see “Within the “big four” accountancy firms, market share has been shifting. EY has overtaken Deloitte as the third biggest auditor to FTSE 100 clients, behind PwC and KPMG in first and second place, respectively. This month Royal Bank of Scotland announced it had appointed EY as its auditor from 2016, ending a 14-year contract with Deloitte” (at http://www.ft.com/intl/cms/s/0/f22383ca-6410-11e4-bac8-00144feabdc0.html). This is actually more than just the shaking of the trees and the stirring of the gravy bowl. You see this is a shifting picture where the big four are now pushing for data analytics, the Wall Street Journal have been slowly filling the spaces in that regard. The headline ‘Accountants Increasingly Use Data Analysis to Catch Fraud‘ states it, but what do they state? At http://www.wsj.com/articles/accountants-increasingly-use-data-analysis-to-catch-fraud-1417804886, we see “When a team of forensic accountants began sifting through refunds issued by a national call center, something didn’t add up: There were too many fours in the data. And it was up to the accountants to figure out why“. Yes on the night of St. Nicholas the presents are handed out to all and especially the bankers, because analytics are here, the secret sauce of the needy to quench those who want to solve and hide those in the shadows. You see Benford’s Law is here and everything will be OK now! Is that so? Let’s take a look at ‘The Irrelevance of Benford’s Law for Detecting Fraud in Elections‘ (at http://www.vote.caltech.edu/sites/default/files/benford_pdf_4b97cc5b5b.pdf), where we see: “Detecting and measuring fraud is much like any criminal investigation and requires a careful gathering of all available data and evidence in conjunction with a “theory of the crime” that takes into account substantive knowledge of the election being considered, including the socio-economic and geographic correlates of voting“. This is about voting, so how does this apply? Consider the quote on page 23 “The operant clause here, though, is “in otherwise homogeneous data” since this indicator is intended to detect the heterogeneity introduced by a specific form of fraud“, now we get to those two parts, when we see “In statistics, homogeneity and its opposite, heterogeneity, arise in describing the properties of a dataset, or several datasets. They relate to the validity of the often convenient assumption that the statistical properties of any one part of an overall dataset are the same as any other part” (quick Wiki reference). So as we contemplate “the statistical properties of any one part of an overall dataset are the same as any other part“, ehhh, when has that ever been the case in keeping financial books? It is a balancing act, which means half on one side, means half on the other side (does that not prove the point?) No, because they are two sides of the same coin, double elements so to speak, so what to include, what not, the formula becomes unbalanced even further. Consider that banking is all about specifics, I will stay away from that element for a while, because the element of specifics is the issue, consider the graphs below.

I can tell you now that I violated loads of rules. It comes from a list of 400 movies, their revenue. So, it spans several year, 400 numbers and those are the most visible reasons why Benford does not apply. The books of Tesco have similar issues. Dozens of accounts, interactions, loads of numbers spanning a time zone, but at times those numbers are also of a small count. Could this work with a ‘grocery’ store? Consider the amount of articles at 99c and £1.99. The amount of special offers going on, day to day (Tesco example), from that, if we use EVERY transaction, we will see skewing, giving us the problem, banks have similar issues, but now more often with seriously large numbers. If we ‘Benford’ the hell out of all the commissions, will they stand the ‘fraud’ test? If not, will the bank see that cash returned, or will we suddenly see a ‘rationalisation’ of non-valid application?

This is at the heart “in otherwise homogeneous data“, which gave the Call-centre a ‘ding-dong’, yet I feel that overall numbers could have shown the issue as well. Too many issues do not hold water here, yet the end of the article gives us what matters “Benford’s Law isn’t a magic bullet. It’s only one approach. It isn’t appropriate for all data sets. And when it is a good tool for the job, it simply identifies anomalies in data, which must be explained with further investigation“, ah the common sense. That did not take long did it?

So as there are serious options for investigating Fraud, the watchers of Tesco are still not in the limelight of the press, they have been given the ‘shade’ by the press at large. In one moment we see Tesco getting replaced by DeLoitte and recently we see Santander bank replacing DeLoitte for PwC and the SFO is nowhere to be seen. So are the Elves of Statistics and the Serious ‘eff’ Ogres in a state of non-war? Perhaps the SFO is too busy and whilst those auditors give new presentations on those yummy statistics, but as I personally see it, it is basically another presentation to lull groups of people to sleep. There is a mess in front of the people and those who should look and act, seem to be too busy and many can slightly fall asleep again.

Just 6 weeks ago, the UK got the message ‘RBS, once the world’s largest bank, is using analytics technology to go back to the era of personal customer service‘, with a promise to invest £100m in data analytics technology. I personally believe in analytics, it is a great tool, but in light of many factors, unless you get the people who have been consistently under-called them a job with a competitor bank, the institution will be paying a lot by those currently not doing their job right.

That final statement can be easily proven.

In the first, if data analytics was key, those involved should have known this for well over 3 years, some in charge have been there long enough, which means that no action was taken and they should not be in a position where they remain idle.

In the second, if data analytics is not key in solving some of the matters, why are they buying it? It could be for very valid other reasons, but that does not solve the ‘under-calling’ issue, it does not solve several other issues, even though it solves some, so at best, data analytics will diminish losses, which is good, but should we not get rid of the dead weight (read significant reasons for large losses).

All this comes to blows soon enough, because if the RBS does not get its results, new articles will appear all over the place regarding ‘miscommunication’, times of deployment and infrastructure issues, in the meantime ‘managed bad news’ prevails and more waves of issues will be swept under the covers of a dark carpet. As accounts are handed over between the 4 big auditors, the sum in the end gives us that overall none of them will make any serious losses. Slightly beyond the short term it evens out for the big four, which might be the largest miscarriage of justice of all.

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