• America’s
middle class sinking under the poverty line
By Victor Thorn
Amid White House claims that
the economy is rebounding, Americans are actually being placated by a
vast illusion. During the Great Depression, soup lines stretched
around city blocks.
In 2013, these same soup lines
exist, except in a different form. Facilitated by yearly trillion
dollar deficits, one-sixth of all citizens now collect food stamps.
This rapidly expanding welfare state also includes skyrocketing
disability claims and other government programs that have provided
the necessary optics for what many are calling an invisible
depression.
But calculated PR campaigns
can only conceal these calamities for so long, especially a
disturbing slide toward poverty for middle class workers, many of
them white. In a monumental July 28 article, the AP’s Hope Yen
revealed
that 79% of U.S. adults will, at least once in their lifetime, face
prolonged stretches of unemployment, reliance on government aid, or
income levels below the poverty line.
While corporate media
propagandists fixated for months on George Zimmerman’s alleged
profiling of Trayvon Martin, the real story facing our country lies
in classism, not racism. Harvard Prof. William Julius Wilson
emphasized,
“It’s time that America comes to understand that many of the
nation’s biggest disparities . . . are increasingly due to economic
class position.”
Yen took it a step further.
“Hardship is particularly growing among whites.” Although poverty
rates for blacks and Hispanics triple that of whites, by sheer
numbers those living in a monetary danger zone—characterized as an
income level of $23,012 for a family of four—are now 41.5% white.
Despite white families still
possessing, on average, six-times the overall wealth of blacks and
Hispanics, on July 31 Fox Business Network analyst Charles Payne
offered
this perspective. “While the nation has been sidetracked with a
variety of news headlines promoting racial animosity and a recent
speech by Pres. Obama suggesting treatment of black people is moving
backwards, there is a major crisis in white America that’s going
unnoticed or ignored.”
The reasons are plenty. After
the housing bubble burst, many homeowners abruptly realized that they
owed more on their residences than they were worth, a condition known
as being underwater. Also, even though working class whites still
comprise the largest demographic employment bloc, fears regarding
Obamacare are compelling companies to primarily only hire part-time
or temporary help. In fact, of all jobs created this year, 77% were
part-time.
Other factors must be
considered. For instance, if Obama’s amnesty bill passes, upwards
of 20 million more foreigners will be competing for lower-end jobs.
In Appalachia, an ongoing war against coal has decimated many
mountain communities, whereas Midwest factory towns still suffer from
the effects of outsourcing.
Moreover, insidious programs
such as Agenda 21 are gutting rural white America, especially in the
heartland, in an attempt to urbanize our population. With recent
college graduates struggling to find entry-level jobs, a rise in
white single-mother households, increased payroll taxes, and a
largely unreported rise in poverty among whites near retirement age,
it appears as if the new normal for once thriving white Americans
seems to be one of economic dystopia.
The Obama administration’s
attempt to “level the playing field” seems to be working
according to plan.
• Single white woman
recounts her struggle to pay the monthly bills
Despite the rosy scenarios put
forth by Washington elites, an increasing number of single white
females are facing the harsh reality that just because you have a job
doesn’t mean you’re not considered poor.
For this week’s edition,
this writer to spoke to a single white female in her late 40s who
lives in rural Pennsylvania. Out of concern that her candid
statements about the perils of today’s working poor could impact
the various jobs she works or embarrass her in the local community,
AMERICAN FREE PRESSdecided
not to reveal her identity. Instead, she asked to be referred to as
“Nikki.”
AFP asked Nikki to describe
her schedule.
“I work 36 hours a week as a
secretary, and then afterward I put in two or three hours each
evening at a local retail store for minimum wage,” she said. “So,
I get up at six in the morning and usually don’t get home until
seven or eight at night. It’s a good thing both my kids are grown
and on their own, because if they were little, I’d never see them.”
Nikki’s jobs don’t end
there. “On the weekends, I do some gardening for a couple of
elderly people to earn a few extra bucks,” she added.
Even with a seven-day
workweek, Nikki’s financial situation isn’t pleasant. “Between
rent, a car payment, car insurance, gas money and paying my
utilities, I usually only have $10-15 left over by week’s end,”
she said.
At the risk of getting too
personal, this writer inquired about Nikki’s circumstances. “I
got divorced a few years ago,” she began, “and I’m still gun
shy about starting a new relationship. For better or worse, I’m on
my own. It’s all up to me.”
When prompted to expand upon
some of her hardships, Nikki reluctantly stated, “This is
embarrassing, but a few weeks ago I needed some new outfits for work.
Being low on cash, I had to buy used clothes at a second-hand shop.”
She continued: “Last June my
friend asked if she could borrow $200 to pay for an overdue doctor’s
visit. I didn’t have that kind of money lying around. Do you know
how hard it was turning down a gal I’d known since high school? I
felt sick for days.”
As to whether she tried
getting government assistance, Nikki provided another interesting
element to her story. “At the beginning of this year I swallowed my
pride and made an appointment at the welfare office,” she said.
“After poring over my records, they said I made $53 a month too
much to qualify for food stamps and their subsidized fuel program.
So, even though I’m always broke, I’m too rich for welfare.”
Pausing a moment, Nikki joked:
“They say money can’t buy happiness, but it sure would help put a
down payment on it.”
Posed with what would happen
if a catastrophic expense suddenly arose, Nikki replied, “If the
engine in my car blew up, I’d be ruined. I can’t even afford to
make a down payment on another one. Plus, since I don’t have health
insurance, I’d never recover from a major hospital bill. I’d be
bankrupt.”
Despite her financial woes,
Nikki wanted to clarify something. “I don’t want your readers to
think I’m complaining. Even though things are rough, I work hard,
still have my faith, and except for a few credit card bills, I’m
mostly out of debt. Better yet, although everyone in my family is
struggling, we all pull together and help each other whenever we
can.”
Providing a final thought,
Nikki wondered: “The only thing I can’t figure out is, shouldn’t
working three jobs and being exhausted all the time get me at least a
little piece of the American Dream? For some reason, I can’t seem
to catch that brass ring.”
"This the truth of [election] 2012:
money beat money," John Nichols and Robert McChesney conclude in their
new book "Dollarocracy: How the Money and the Media Election Complex Is
Destroying America." Can a system in which democracy has been placed by a betting
parlor of financial backers be returned to an informed citizenry of
voters? It's a particularly daunting challenge considering that the
mainstream corporate media, which the vast majority of Americans rely on
for their political and public policy "information," benefits quite
profitably from "dollarocracy." Lisa Graves, executive director of the Center for Media and
Democracy writes of the book, "The billionaires are buying our media and
our elections. They're spinning our democracy into a dollarocracy. John
Nichols and Bob McChesney expose the culprits who steered America into
the quagmire of big money and provide us with the tools to free
ourselves and our republic from the corporate kleptocrats." Please help sustain progressive media. Obtain "Dollarocracy: How
the Media and Media Election Complex Is Destroying America" with a
minimum contribution to Truthout. Click here now. Excerpt from Introduction: "Privilege Resurgent"
At many stages in the advance of humanity, this conflict between
the men who possess more than they have earned and the men who
have earned more than they possess is the central condition of
progress. In our day it appears as the struggle of freemen to gain and
hold the right of self-government as against the special interests, who
twist the methods of free government into machinery for defeating the
popular will. At every stage, and under all circumstances, the essence
of the struggle is to equalize opportunity, destroy privilege, and give
to the life and citizenship of every individual the highest possible
value both to himself and to the commonwealth. That is nothing new. THEODORE ROOSEVELT, 1910
It is, of course, nothing new.
America has from its founding struggled along a narrow arc of history
toward an end never quite reached: that of sincere and meaningful
democracy. We have made massive progress, evolving from a nation of
privileged elites that espoused lofty ideals about all men being created
equal and then enslaved men, women, and children into a nation where
the descendants of those slaves have taken their places as governors,
senators, and Supreme Court justices. Yet as the great champion of
American advancement, the Reverend Martin Luther King Jr., reminded us
in a time of historic change, “Human progress is neither automatic nor
inevitable.”
What was gained in the Progressive Era when Teddy Roosevelt
championed radical reform and across the years of unsteady but genuine
democratic progress that followed was written into the Constitution and
the statutes of the land. Witness amendments eliminating poll taxes and
extending the franchise to women and eighteen- to twenty-year-olds, the
Civil Rights and Voting Rights acts, and, finally, the National Voter
Registration Act of 1993.
But this progress never quite assured that the great mass of people
would gain and hold the right of self-government as against the special
interests. The U.S. Constitution contains no guarantee of a right to
vote, and this lack of definition is constantly exploited by political
hucksters who would make America a democracy for the few, and a
plutocracy in essence. The malefactors of great wealth continue to twist
the methods of free government into the machinery for defeating the
popular will. And scarcely one hundred years after Roosevelt identified
his central condition of progress, they have reversed it, with court
rulings and practices that are contributing to the destruction of
the American electoral system as a tool for realizing the democratic
dreams that have animated American progress across two centuries. U.S.
elections have never been perfect—far from it—but the United States is
now rapidly approaching a point where the electoral process itself
ceases to function as a means for citizens to effectively control
leaders and guide government policies. It pains us, as political writers
and citizens who have spent a combined eighty years working on and/or
covering electoral campaigns, to write these words. But there can no
longer be any question that free and fair elections—what we were raised
to believe was an American democratic birthright—are effectively being
taken away from the people.
In this book we examine the forces—billionaires, corporations, the
politicians who do their bidding, and the media conglomerates that
facilitate the abuse—that have sapped elections of their meaning and of
their democratic potential. “The Money Power,” as Roosevelt and his
contemporaries termed the collaboration that imposed the will of wealth
on our politics, achieves its ends by flooding the electoral system with
an unprecedented tidal wave of unaccountable money. The money makes a
mockery of political equality in the voting booth, and the determination
of media companies to cash in on that mockery—when they should instead
be exposing and opposing it—completes a vicious circle.
This is not an entirely new phenomenon, as we note in the historical
chapters of this book. But it is an accelerating phenomenon. The U.S.
Supreme Court’s 2010 Citizens United allowing unlimited corporate
campaign spending confirmed the court-ordered diminution of democratic
processes that over four decades has renewed the political privileges of
the elites. “The day before Citizens United decided,” Lawrence Lessig
wrote, “our democracy was already broken. Citizens United have shot the
body, but the body was already cold.”
Economic elites are now exercising those privileges with an abandon
not seen since the era of the robber barons that Roosevelt decried. To
enhance the influence of their money, billionaires, corporations, and
their political pawns began in the run-up to the 2012 election to
aggressively advance policies designed to limit the voting rights of
those Americans who are most disinclined to sanction these elites’
continued dominance of the political process. They are grasping for
total power, and if they did not succeed in choking off the avenues of
dissent in 2012, they will surely return—with increased
determination and more insidious tactics—in 2014 and 2016 and beyond.
“There’s been almost a shameless quality to it,” says former U.S.
senator Russ Feingold of the pressure on politicians to raise and spend
exponentially more money since the Citizens United . “It has grossly
altered our system of government. We don’t have the kind of elections
that most of us grew up seeing.”
The moneyed interests are confident, even in the face of temporary
setbacks, that they will be able to continue their initiative because
they are well served by the rapid decline of the news media as a
checking and balancing force on our politics. Our dominant media
institutions do an absolutely dreadful job of drawing citizens into
public life, especially elections. The owners of media corporations have
made their pact with the new order. For the most part, they do not
challenge it, as the crusading editors and publishers of another age
did.
Rather, advertising departments position media outlets to reap
windfall profits through the broadcasting of invariably inane and
crudely negative political campaign advertising, which is the lingua
franca of American electioneering in the twenty-first century. The
corporate media are the immediate financial beneficiaries of our
increasingly absurd election system—and the primary barriers to its
reform. To talk about the crisis of money in politics without
addressing the mess that the media have made of things is the equivalent
of talking about the deliberate fire without discussing the arsonist.
We term the combine that has emerged the “money-and-media
election complex.” It has become so vast and so powerful that it can
best be understood as an entity unto itself. This complex is built on a
set of commercial and institutional relationships involving wealthy
donors, giant corporations, lobbyists, consultants, politicians,
spinmeisters, corporate media, coin-operated “think tanks,”
inside-the-beltway pundits, and now super-PACs. These relationships are
eviscerating democratic elections and benefit by that evisceration.
The complex has tremendous gravitational power, which increases the
degree of difficulty for those wishing to participate in elections
outside its paradigm. The complex embraces and encourages a politics
defined by wealthy funders, corporate media, and the preservation of a
new status quo; it is the modernday reflection of the arrangements that
served the robber barons of the late nineteenth and early twentieth
centuries. Please help sustain progressive media. Obtain "Dollarocracy: How
the Media and Media Election Complex Is Destroying America" with a
minimum contribution to Truthout. Click here now. Copyright 2013 by John Nichols and Robert W. McChesney. Not to be reproduced without the permission of the authors.
Copyright, Truthout. May not be reprinted without permission of the author.
The federal government has made it easier than ever to borrow money
for higher education - saddling a generation with crushing debts and
inflating a bubble that could bring down the economy
On
May 31st, president Barack Obama strolled into the bright sunlight of
the Rose Garden, covered from head to toe in the slime and ooze of the
Benghazi and IRS scandals. In a Karl Rove-ian masterstroke, he simply
pretended they weren't there and changed the subject. More Taibbi:The Last Mystery of the Financial Crisis
The topic? Student loans. Unless Congress took action soon, he
warned, the relatively low 3.4 percent interest rates on key federal
student loans would double. Obama knew the Republicans would make a
scene over extending the subsidized loan program, and that he could
corner them into looking like obstructionist meanies out to snatch the
lollipop of higher education from America's youth. "We cannot price the
middle class or folks who are willing to work hard to get into the
middle class," he said sternly, "out of a college education."
Flash-forward through a few months of brinkmanship and name-calling,
and not only is nobody talking about the IRS anymore, but the
Republicans and Democrats are snuggled in bed together on the
student-loan thing, having hatched a quick-fix plan on July 31st to peg
interest rates to Treasury rates, ensuring the rate for undergrads would
only rise to 3.86 percent for the coming year.
Though this was just the thinnest of temporary solutions –
Congressional Budget Office projections predicted interest rates on
undergraduate loans under the new plan would still rise as high as 7.25
percent within five years, while graduate loans could reach an even more
ridiculous 8.8 percent – the jobholders on Capitol Hill couldn't stop
congratulating themselves for their "rare" "feat" of bipartisan
cooperation. "This proves Washington can work," clucked House Republican
Luke Messer of Indiana, in a typically autoerotic assessment of the
work done by Beltway pols like himself who were now freed up for their
August vacations.
Not only had the president succeeded in moving the goal posts on his
spring scandals, he'd teamed up with the Republicans to perpetuate a
long-standing deception about the education issue: that the student-loan
controversy is now entirely about interest rates and/or access to
school loans.
Obama had already set himself up as a great champion of student
rights by taking on banks and greedy lenders like Sallie Mae. Three
years earlier, he'd scored what at the time looked like a major victory
over the Republicans with a transformative plan to revamp the
student-loan industry. The 2010 bill mostly eliminated private banks and
lenders from the federal student-loan business. Henceforth, the
government would lend college money directly to students, with no
middlemen taking a cut. The president insisted the plan would eliminate
waste and promised to pass the savings along to students in the form of
more college and university loans, including $36 billion in new Pell
grants over 10 years for low-income students. Republican senator and
former Secretary of Education Lamar Alexander bashed the move as
"another Washington takeover."
The thing is, none of it – not last month's deal, not Obama's 2010
reforms – mattered that much. No doubt, seeing rates double permanently
would genuinely have sucked for many students, so it was nice to avoid
that. And yes, it was theoretically beneficial when Obama took banks and
middlemen out of the federal student-loan game. But the dirty secret of
American higher education is that student-loan interest rates are
almost irrelevant. It's not the cost of the loan that's the problem,
it's the principal – the appallingly high tuition costs that have been
soaring at two to three times the rate of inflation, an irrational
upward trajectory eerily reminiscent of skyrocketing housing prices in
the years before 2008. More Taibbi:The Biggest Price-Fixing Scandal Ever
How is this happening? It's complicated. But throw off the mystery
and what you'll uncover is a shameful and oppressive outrage that for
years now has been systematically perpetrated against a generation of
young adults. For this story, I interviewed people who developed
crippling mental and physical conditions, who considered suicide, who
had to give up hope of having children, who were forced to leave the
country, or who even entered a life of crime because of their student
debts.
They all take responsibility for their own mistakes. They know they
didn't arrive at gorgeous campuses for four golden years of boozing,
balling and bong hits by way of anybody's cattle car. But they're angry,
too, and they should be. Because the underlying cause of all that
later-life distress and heartache – the reason they carry such crushing,
life-alteringly huge college debt – is that our university-tuition
system really is exploitative and unfair, designed primarily to benefit
two major actors.
First in line are the colleges and universities, and the contractors
who build their extravagant athletic complexes, hotel-like dormitories
and God knows what other campus embellishments. For these little
regional economic empires, the federal student-loan system is
essentially a massive and ongoing government subsidy, once funded mostly
by emotionally vulnerable parents, but now increasingly paid for in the
form of federally backed loans to a political constituency – low- and
middle-income students – that has virtually no lobby in Washington.
Next up is the government itself. While it's not commonly discussed
on the Hill, the government actually stands to make an enormous profit
on the president's new federal student-loan system, an estimated $184
billion over 10 years, a boondoggle paid for by hyperinflated tuition
costs and fueled by a government-sponsored predatory-lending program
that makes even the most ruthless private credit-card company seem like a
"Save the Panda" charity. Why is this happening? The answer lies in a
sociopathic marriage of private-sector greed and government force that
will make you shake your head in wonder at the way modern America sucks
blood out of its young.
In the early 2000s, a thirtysomething scientist named Alan Collinge
seemed to be going places. He had graduated from USC in 1999 with a
degree in aerospace engineering and landed a research job at Caltech.
Then he made a mistake: He asked for a raise, didn't get it, lost his
job and soon found himself underemployed and with no way to repay the
roughly $38,000 in loans he'd taken out to get his degree.
Collinge's creditor, Sallie Mae, which originally had been a
quasi-public institution but, in the late Nineties, had begun
transforming into a wholly private lender, didn't answer his requests
for a forbearance or a restructuring. So in 2001, he went into default.
Soon enough, his original $38,000 loan had ballooned to more than
$100,000 in debt, thanks to fees, penalties and accrued interest. He had
a job as a military contractor, but he lost it when his employer ran a
credit check on him. His whole life was now about his student debt. More Taibbi:The Scam Wall Street Learned From the Mafia
Collinge became so upset that, while sitting on a buddy's couch in
Tacoma, Washington, one night in 2005 and nursing a bottle of Jack
Daniel's, he swore that he'd see Sallie Mae on 60 Minutes if it
was the last thing he did. In what has to be a first in the history of
drunken bullshitting, it actually happened. "Lo and behold, I ended up
being featured on 60 Minutes within about a year," he says. In
2006, he got to tell his debt story to Lesley Stahl for a piece on
Sallie Mae's draconian lending tactics that, curiously enough, Sallie
Mae itself refused to be interviewed for.
From that point forward, Collinge – who founded the website
StudentLoanJustice.org – became what he calls "a complaint box for the
industry." He heard thousands of horror stories from people like
himself, and over the course of many years began to wonder more and more
about one particular recurring theme, what he calls "the really
significant thing – the sticker price." Why was college so expensive?
If discount every-day necessities can’t tempt shoppers into stores,
it’s a clear signal that consumers feel stifled by a tough economy at
home and overseas.
That’s the picture provided this morning by Wal-Mart’s latest
quarterly report. The world’s largest retailer cut its annual profit and
revenue outlook and reported second-quarter figures that missed
expectations.
Wal-Mart, operating 10,800 stores across 27 countries, is seen as an
economic bellwether because it’s a go-to spot for so many households,
where they shop for groceries, home supplies and gasoline. Nonexistent
wage gains and a sluggish recovery are hampering spending in America and
Europe, while slowing growth in developing companies keep the emerging
middle classes there from spending much, too. Listen to Wal-Mart CFO
Charles Holley: “”The retail environment remains challenging in the U.S.
and our international markets, as customers are cautious in their
spending.”
Wal-Mart isn’t alone in contending with uncertain shoppers. Macy'sM-2.83% yesterday reported downbeat results and blamed it on a weak shopping period. A month earlier, TargetTGT-0.72%
lowered its full-year profit forecast and turned in disappointing
sales. One top Wal-Mart competitor, Costco, managed to impress, though:
its quarterly profit just beat analyst estimates.
Looking ahead, Wal-Mart now expects sales to increase 2% to 3% this
year. Tellingly, Wal-Mart had earlier forecast sales growth between 5%
to 6%. In addition, Wal-Mart reduced its profit outlook by a dime, to
$5.10 to $5.30 a share. Analysts believed Wal-Mart sales would rise 5.4%
with $5.30 a share in profit.
“The key issue here then, we have to assume that back-to-school is
not off to a good start,” says Janney Montgomery Scott analyst David
Strasser, who rates Wal-Mart as Buy. Empty stores during August would be
a troubling situation for retailers, who rely on the back-to-school
period. It’s one of only two times in the entire year when they can
count on turning a profit. The signal from Wal-Mart’s numbers does seem
to contradict a reading from the government on retail spending, but as
Strasser notes, it’s just one of several data points that tell a
different story about the health of the consumer.
In the second quarter, the Bentonville, Ark.-based retailer earned
$4.07 billion, $1.24 a share, from $4.02 billion, $1.18 a share, a year
earlier. Excluding a one-time item, Wal-Mart made $1.25 a share,
matching Wall Street’s expectations.
Revenue was lighter than anticipated, though. Sales grew 2.3% to $116.2 billion, while analysts expected $118.09 billion.
At Wal-Mart stores open at least a year, sales fell 0.3%. Analysts
predicted those sales would increase 0.7%. This revenue figure is an
important marker for retailers because it strips away volatile results
from newly opened or closed locations.
Wal-Mart shares fell 2.4% to $74.60 in early morning trading. Reach Abram Brown at abrown@forbes.com.
The NSA must be drooling with anticipation…. the NSTIC is in full swing, working hard to bring global ID
to the world. All that lovely data, all linked together, just oozing
with juicy details. Put it together with all the sensor readings and you
find out so much!
Yes, the National Strategy for Trusted Identities in Cyberspace (NSTIC) has already begun pilots of the federated identity ecosystem,
where corporations manage people’s online identities for them, i.e.
they ‘look after’ your data, act as a go-between, so you can prove you are who you say you are, online. The US Strategy is intended to work globally, using international standards to exchange information, and most countries have managed to implement a smart ID program in some form or other, such as biometric passports.
The military use of online Identity Management (IdM)
is being extended to all of us because we are all going to be forced
into the matrix – the intention is to make all government and healthcare
services online only, and to use these services, you have to use an
Identity Provider (IdP) to validate your right of access. Many of these
IdPs have been supplying the NSA (National Security Agency) with records
used to identify us, to facilitate “pre-emptive surveillance” or predictive policing – using the data to look for patterns and ‘predict’ crime before it even has a chance to happen.
The Edward Snowden case has made access rights a hot topic and the
response of the NSA has been to insist they are ‘only’ collecting
metadata. However, metadata is so powerful, it can be used by IdPs to help validate identity! Metadata is also sold to help marketers and politicians ‘understand’ us.
The presence of General Keith Alexander at last month’s Black Hat
Conference was an appeal to hackers to be on ‘the right side’, an appeal
made all the more poignant for the loss of Barnaby Jack, the hacker,
who, it is said, wore a white hat, unlike, say, Anonymous. He was a good
hacker who should have been there – he was trying to help people, and
the controversy over his death last month may be pure media hype, as
this article will explain. The FDA had announced in June they could
address the insecurity of medical devices by using IdM - allowing only
authorised users to access the device, but this fails to fully address
the problems highlighted by Jack, and other researchers.
The powers that be are bringing on the FINAL CRUNCH, the false dichotomy – now, they say, is the time to choose:
Are you a good guy, or a bad guy?
Are you with us, or against us?
Please identify.
Protecting a person’s privacy is also as critical to one’s safety,
dignity and identity as is protecting a person’s property. With no
privacy, one is de-humanized like an animal in a zoo and much more
susceptible to the control of others. -- Scott Cleland (2013)
Hats and Hackers
Earlier this year, General Keith Alexander toured the National Cybersecurity Center of Excellence
(NCCoE). Alexander is head of both U.S. Cyber Command and the National
Security Agency (NSA) and has featured heavily in the press recently
trying to defend the actions of the NSA in response to the ‘leaks’ by
Edward Snowdon. U.S. Senator Barbara Mikulski helped set up the NCCoE,
and was instrumental in establishing the NSTIC. She joined Alexander for
the tour, exactly two years to the day of Obama’s announcement of the
NSTIC. Mikulski made it clear at the time that identity management was
about helping business, especially in protecting intellectual property,
and the NCCoE is a a public-private partnership hosted by the U.S.
Commerce Department’s National Institute of Standards and Technology
(NIST). Eleven companies have joined the partnership, including RSA,
Intel, and Microsoft.
“We’re standing up for the National Cybersecurity Center of Excellence
to protect America’s ideas and innovations from cyber terrorists, spies
and thieves,” Senator Mikulski said. “This center will unite the
knowledge of the government with the know-how of the private sector to
improve our nation’s cybersecurity and create jobs.”
NIST is responsible for implementing the NSTIC, and the tour of the NCCoE facilities included a demonstration of the NSTIC project that is now being piloted by Daon, Inc., supplying biometric identity management via smartphones. They also got to talk to company representatives, and to learn more about other NIST cybersecurity programs.
No one organization can do the job alone. NSA supports NIST’s efforts to
partner with industry to tackle cyber challenges. NIST has been a great
partner to work with and we know they will be great partners on the
National Cybersecurity Center of Excellence.
General Alexander has also been extending government outreach on
cybersecurity issues from private partnerships to a new focus on the
hacker community. He turned up to the Defcon conference in jeans and
t-shirt last year, and appealed to the audience of around 15,000
‘security specialists’ to help the NSA ‘defend’ the nation. The
Washington Post reported, “The NSA needs cybersecurity experts to harden
networks, defend them with updates, do “penetration testing” to find
security holes and watch for signs of cyberattacks.” Whilst prosecutions
of hackers and whistleblowers have soared, there has also been a
recruiting drive for hackers that are left to join the NSA/government.
In 2011, DOD, DHS, NASA, and NSA attended Defcon, all of them looking to
hire tech-savvy young-bloods, as part of a long term strategy to
increase the skill and knowledge levels of the feds in, “an environment
where the hacker mind-set fits with “a critical mass of people that are
just like them.”” The NSA puts its hackers into either‘red teams’ (the aggressor) or ‘blue teams’ (the defender).
They were welcomed to the event by Jeff Moss, who founded both Defcon and Black Hat and, said the Washington Post(2011),
“is now a member of the Department of Homeland Security’s Advisory
Council, which advises the government on cybersecurity.” Following the
Snowdon ‘leaks’ this year, however, Moss suggested the NSA stay away
from Defcon, but welcomed General Alexander to give a speech at Black
Hat.
This time, Alexander went for a ‘dressed down’ military outfit – and a
fatherly ‘I’m on your side’ speech. Once again, the hackers, any of whom
could be of the black hat variety, gave the General several warm rounds
of applause. A spot of heckling at the end was quickly dealt with.
Apart from trying to defend the NSA, Alexander seemed to be warning the
potential young recruits about the difference between good guys and bad
guys, when he said:
Where do we go from here? – that’s where you come in. We need to hear
from you, because the tools and the things we use are very much the same
as the tools that many of you use, in securing networks. The
difference, in part, is the oversight and the compliance that we have in
these programs. That part is missing in much of the discussion. I
believe it’s important for you to hear that.
This is part of the same old story he keeps on telling: that the NSA is just trying to protect everyone from, “those who walk among you who are trying to kill you”.
This idea, that there is ‘evil amongst us’, is the key to instilling
fear in the global community, and has always been so. It also implies
the NSA wears a White Hat, when in fact much of its mission is blacker
than black – the scope and aim of NSA surveillance amounts to an
offensive attack on the people of the world.
For the hackers, the message seems to be, ‘choose now – cross over to our side, and we’ll pay you and call you heroes’.
Those that choose not to – they’ve been warned about their lack of ‘oversight’.
Who watches the watchers?
The prime example of this is Edward Snowden, who had been certified as an ‘ethical hacker’ - an EC-Council Network Security Administrator (E|NSA) - and the E|NSA course is CNSS4011 certified by the National Security Agency.
Fancy that, eh? Snowdon was trusted by Booz Allen Hamilton (his
employer), and by the NSA itself. These closely linked organisations
already use Identity Management, so just how much “god-like access” do these systems administrators actually get?
Most of the information gleaned by the NSA comes from predictive
analytics employed to find patterns and meaning in the mass of data that
comes through. Computers do most of the spying. But there will always
be those with access, whether they are granted the privilege by the NSA,
or they’ve hacked into the system. We are never going to be safe in the
matrix.
The level of security at the NSA, including identity and access control,
biometrics, and psychometric testing, either makes it highly unlikely
Snowdon would have been able to leak the information without their
knowledge, or he had their full blessing. After all,
These individuals hold the keys to the kingdom
and are often in a position to undermine the integrity of systems and
data, damage systems and, at the extreme, destroy systems and the data
on which they operate.
So why has there been such a focus on the so-called ‘revelations’ by
Snowden/Greenwald? It’s plastered all over the place – why? There have
already been numerous reports of the shady tactics employed by the NSA
over the years, such as by James Bamford, so it is only the focus of the
mainstream media that has kept the story alive. Why all the hype now?
Could it be this case is a standard- setter? It has achieved several
things, from the NSA’s point of view: it has allowed them, and the media
puppets, to twist the meaning of ‘whistleblower’ to ‘traitor’; it has
triggered the meme of cybersecurity; and it has engaged the hacker
community to “have the conversation” with the NSA. More importantly, it
creates the idea in people’s minds that they have an online identity to
protect. But it’s the NSA and their cronies that we need to be protected
from!
The NSA wants to recruit ethical hackers to be trusted system
administrators, but it doesn’t want them to be like Edward Snowdon. Like
Manning and Assange, he now stands as an example of what happens to
those who choose to honour the rights of the people instead of obeying
the shameful directive of the i-Spy War Monster.
The NSA recently announced it intends to implement the ‘two person rule’,
i.e. systems administrators with privileged account access must verify
each other’s movements. This seems unfeasible, given that the NSA are so
desperate to recruit more staff, and the rule has already proved to be “too cumbersome" to implement. The Agency has also, “been busy in the open source world and contributed security-related code to Google's Android operating system. This is like a vampire donating to a blood bank.” It is even said the NSA is targeting people who use Tor networks, PGP and other encryption services.
The President of the EC-Council, Sanjay Bavisi, believes that ‘bad guys’
are like a disease or virus that needs to be weeded out of the system.
At the Colloquium for Information Systems Security Education (led by Dr.
William Maconachy, a former Director of the NSA) in June, Bavisi spoke
to ‘thought-leaders’ from both the DHS and the NSA, and warned them they
were facing a veritable cyber plague. His solution is to get more ethical hackers on board, to inject secure code into the system, just like a “cyber vaccine”.
… the Global CyberLympics
…. is a series of ethical hacking games comprised of both offensive and
defensive security challenges. Teams will vie for the regional
championships, followed by a world finals round to determine the world’s
best ethical hacking team. EC-Council is sponsoring over $400,000 worth
of prizes at the CyberLympics.
…. the mission of the CyberLympics
is to unify global cyber defense while raising awareness toward
increased education and ethics in information security. SAIC says that
the timing of the games could not be more critical, as global cyber
threats are escalating, leaving organizations vulnerable to disastrous
security breaches. According to the U.S. Cyber Consequences Unit, hacking results in an annual loss of $6 to $20 billion in intellectual property and investment opportunities.
….. The CyberLympics will include cyber defense, offense, and a
forensics challenge. The initial qualification rounds of these games
will be conducted via the Internet, testing the skills of hundreds of
contestants from Africa, Asia, Australia, Europe, North and South
America.
Other competitions are open to those who want to be an ethical hacker;
the Air Force Association sponsors the ‘CyberPatriot’ contest, “which …
has grown from eight high school squads in 2009 to more than 1,200 this
year”, and the NSA has also announced it will sponsor the ‘Toaster Wars’.
These contests help train the potential recruits, and to condition them
to behave according to the guidelines of ethical hacking.
While the students
are taught advanced computer skills, they also receive training in
computer ethics …….. students interviewed at the contest say they know
the fine line between white hat and black hat. [One of the students]
said hacking and defending are two sides of the same coin and that the
only way to make a proper defense is to understand your weaknesses.
"We are trained in offensive security, or ethical hacking, but we do
know how to monitor a network like a school and watch all the traffic
going through," Houck said."And if it’s encrypted, we do know how to break that." (my italics)
The contest is a gaming environment, and cheaters are disqualified and no doubt blacklisted as unethical.Understanding the hacker’s mind
is one of the key aims of the recruitment of ethical hackers, or
security specialists, all of whom are psychometrically tested/monitored.
They are, after all, Masters of Identity Control.
Good Guy Barnaby Jack
Barnaby
Jack was known to wear a White Hat. He worked for a computer security
company called IOActive, and had also worked with federal agencies, and
Intel. He was famous for showing how insecure ATMs are:
at the 2010 Black Hat conference, he made them spew out money,
remotely. In more recent years, Jack had spoken to the media about how
he could hack implantable medical devices which use wireless radio
communication – devices such as pacemakers, andimplantable
cardioverter-defibrillators (ICDs), as well asimplanted insulin pumps,
could be hacked from a distance to commit mass murder.
Most of these devices are connected to the Internet, and a number of
articles have described how they are also highly vulnerable to malware,
or viruses, as is much of the computerized equipment in hospitals.
… the devices are easily tricked
by a special command to give up their serial numbers and other info
needed to authenticate into them and control those transmitters; and,
worse, they often have backdoors that allow the wireless signals to be
hijacked even without the credentials……….. around 4.6 million pacemakers
and ICDs were sold between 2006 and 2011 in the US alone.
Barnaby Jack, at the age of just 35, was found dead in an apartment in
San Francisco one week before he was due to demonstrate the ability to
attack pacemakers, at the Black Hat Conference which was attended by General Alexander. This followed
an interview about the devices with Reuters, and the subsequent media
freeze, on information regarding his sudden death, has caused much
speculation about a possible assassination. The media reports take the
view that this was ‘new information’ which no-one wanted to be released;
however, this is not the case at all, as the media
has been reporting this information for several years. A security
researcher called Kevin Fu has done extensive work on this topic and is
on the Advisory Board for the National Institute of Standards and
Technology (NIST) Information Security and Privacy Advisory Board (ISPAB). In 2008, he published a report,
…. describing laboratory experiments showing a Medtronic
Inc. defibrillator could be turned off remotely by hackers. At a 2011
conference, a McAfee Inc. researcher showed he could remotely cause an
insulin pump to deliver fatal doses.
In one recent experiment, Dr. Fu showed that commercially available
devices called software radios, held close to a patient's chest—he used
dummies—could induce defibrillators to deliver unneeded shocks.
"No one has figured out a way to defend against this type of
interference," he said. But he said most companies are aware of such
problems and he and fellow researchers "don't want to give anyone meat
to make crazy claims," as his hacks so far amount to lab experiments.”
While Fu has confined his experiments to the lab, kept a low media
profile, and is working closely with the US government, Barnaby Jack had
worked without any ‘oversight’, in a Black Hat kinda way, and, well ….
maybe he just talked too much. Although device manufacturers such as
Medtronic believe
“the risk to an individual customer is low and the benefits of the
therapy outweigh these risks", they aren’t keen to publicise the
insecurities of their devices because of the burden of liability, and
the claims that could be brought against them.
Security consultants who have worked for Medtronicand
people familiar with the company's internal efforts say Medtronic has
been developing cybersecurity features for its devices for more than a
decade but has kept a low profile on the issue to avoid additional
scrutiny or alarming patients. Security efforts have ramped up in recent
years, they said.
The trouble is, hospitals do not want to report malfunctions, and the FDA rules deter hospitals from ‘patching’ the millions of devices already implanted in people around the world:
… under current US law,
software used to run medical devices in hospitals must remain static
once approved. It’s not that manufacturers cannot install anti-virus
software or provide updates to fix security flaws, it’s that they will
not do so, in order to remain in compliance with the Food & drug
Administration.
"I find this mind-boggling,” Kevin Fu…. told Technology Review.
“Conventional malware is rampant in hospitals because of medical devices
using unpatched operating systems. There's little recourse for
hospitals when a manufacturer refuses to allow OS updates or security
patches.
Kevin Fu attended a meeting of the ISPAB, together with Medtronic,
Google, Microsoft, the NSA, and other federal agencies, in October last
year. The minutes of the meeting
note that Vijay D’Souza, from the U.S. Government Accountability Office
(GAO), “indicated that GAO had talked with some manufacturers about the
patching issue and manufacturers indicated they did not want to patch
devices to jeopardize their certification. Mr. D’Souza indicated that
the general feedback was that the possible benefit of issuing a patch is
far outweighed by the risk – the issue is one of liability.”
Fu had discussed this issue in an interview (which also featured Barnaby Jack) with Vanity Fair last year, where it was reported,
Medical manufacturers…. frequently will not allow hospitals to modify
their software - even just to add anti-virus protection—because they
fear that the changes would have to be reviewed by the U.S. Food and
Drug Administration, a complex and expensive process. The fear is wholly
justified; according to the F.D.A., most medical-device software
problems are linked to updates, patches, and revisions.
One way to address the problem is to encrypt the information sent to the devices, but this is difficult due to their limited battery-life and Fu, et al, concluded several years ago,
The lesson learned
is that encryption is not enough to protect the privacy of medical
telemetry, and that reasonable assurance for security and privacy will
require an energy budget. Future design of medical devices will have to
make difficult tradeoffs between battery life versus security and
privacy.
Without overcoming these hurdles, the plan is to use identity management to try to limit access to the devices; in June (2013), the FDA issued a Safety Communication, ‘Cybersecurity for Medical Devices and Hospital Networks’, which advises hospitals to:
“Take steps to limit unauthorized device access to trusted users only,
particularly for those devices that are life-sustaining or could be
directly connected to hospital networks. Appropriate security controls
may include: user authentication, for example, user ID and password,
smartcard or biometric; strengthening password protection by avoiding
hard-coded passwords and limiting public access to passwords used for
technical device access; physical locks; card readers; and guards.”
The key points of the guidance are limiting access to “trusted users
only” and attempting to “ensure trusted content” by using only
id-verified software and firmware. As for encryption to protect the
transfer of data to and from the device – the guidance simply states
this should be used “when appropriate”. The probability of risk to patients from a security breach will be assessed to determine whether or not intervention is necessary.
But just how bad is this risk? There have been no recorded incidents of
devices being attacked, though the storyline aired in an episode of ‘Homeland’
– the hitman targeted the Vice President by first getting the serial
number for his pacemaker.After seeing the episode, Jack joked on
IOActive’s blog, “My first thought after watching this episode was ‘TV is so ridiculous! You don’t need a serial number!”
The Vanity Fair article notes, “You don’t even have to know anything
about medical devices’ software to attack them remotely, Fu says. You
simply have to call them repeatedly, waking them up so many times that
they exhaust their batteries.”
What Jack and Fu were trying to warn us of went way further than the
insecurity of pacemakers and insulin pumps. The whole world is intended
to be linked to the Internet. Every part of the Internet of Things and
People is being linked together, communicating, SMART. And everything we do is recorded. Identifiable. Searchable.
This is not smart.
None of it is safe from the NSA.
NSA: “We’re just collecting metadata”
General Keith Alexander has tried to assure people who fear for their
privacy, by telling them his agency is only collecting metadata; and
they’re not listening to everyone’s phone calls because
it’s just not possible. Of course he’s right about this, but, as he
himself says, he’s not telling the whole story. It would not be possible
for human beings to sit and listen to everyone’s phone calls, though it
is possible to transcribe into text the speech of millions of peoples’ private calls, and search it for keywords.
In an interview at the Aspen Institute,
Alexander described the breadth of the more targeted surveillance the
NSA does when he talked about the number of ‘hops’ that are done (he
says they can only do three). The first hop is 40 people (friends and
associates), the second hop expands this to include all the people known
by the original group, and works out to be (40 x 40) 1,600 people. The
third hop would therefore be (40 x 40 x 40) 64,000 people under
surveillance from just one original suspect. It’s hard to know how the
FISA court could rubber-stamp each and every one.
And for Alexander to dismiss the collection of metadata as if this is no
intrusion of privacy is outrageous – “connecting the dots” of petabytes
of metadata reveals hugely private details of our lives by showing patterns, and allowing inferences to be made. This is the stuff of modern marketing, and predictive policing.
Defined as being ‘data about data’, metadata comes from the many
ubiquitous sensors (such as RFID) all around us, and all the things we
do electronically.
METADATA IS WHAT THE NSA NEEDS TO SPY ON US!
All of this is fully explained in an article at ITworld.com:
It's "data about data" -- or, more properly in this context, it's data
about content. When you look at a Web page, a photo, or an e-mail
message, what you see is the human-readable content. Hiding underneath
that picture of a kitten, the ITworld Web page, or a note from your mom,
is all kinds of data about what you see.
With a digital photograph, there can be dozens of data fields.
There are multiple formats for this data. …. A photograph's metadata
can record the camera that was used to take it, and the date and time it
was taken -- along with the location, if the camera has a GPS. If you
edit your photograph, the metadata can also be used to record what
software and operating system you used. And with the right software….
you can read any image's metadata.
So
metadata is what allows the NSA to keep tabs on us all, especially when
it comes to phone records, where the metadata includes the identity of the SIM
and the device it is installed in, who called/texted who, where, and
how long for. We also generate metadata every time we surf the net, send
an email, or post on a forum, and all of it is trawled by Internet
service providers, for marketers and researchers. If you use a mobile,
or the Internet, there are profiles of you gleaned from all this data.
There’s so much of it, and it’s so useful, it’s worth a lot of money.
Metadata is gold-dust because it is a window to your soul.
Companies like Facebook, Google and Microsoft pick up all of our digital breadcrumbs, and sell them. Known in the trade as ‘traffic analysis’,
the data is retrievable for law enforcement, and auditing, at any time
in the future. It is also used, in real-time, to try and predict crime.
Computer programs analyse metadata looking for patterns, in an attempt
to detect ‘pre-crime’. It is used to decide where to concentrate police
powers, but the fetish of ‘detecting terrorism’ is a fearsome fetish
indeed. After all, they presume any one of us could be a terrorist. Not
so long ago, (sometimes violent) political activists were called
‘freedom fighters’ by the media. Now, even a person who questions the
authority of the globalists can be deemed a potential terrorist. Perhaps
you’ll be placed on ‘the list’ just for reading this article…. or
perhaps, we are, already, all suspects. Trouble is, all of this big data
the NSA are getting, “may mean more information, but it also means more false information.... If big data leads to more false correlations, then mass surveillance may lead to more false accusations of terrorism”
One of the NSA’s research projects
aim (sic) is to forecast, on the basis of telephone data and Twitter
and Facebook posts, when uprisings, social protests and other events
will occur. The agency is also researching new methods of analysis for
surveillance videos with the hope of recognizing conspicuous behavior
before terrorist attacks are committed.
….. Apparently the data is extracted, transferred and loaded into
servers at the Utah Data Center in Bluffdale. According to Der Spiegel,
there [is] enough capacity to store a Yottabyte of data…. Large enough
to store all the electronic communications of all of humanity for the
next 100 years……. Ira Hunt, CTO for the Central Intelligence Agency,
said in a speech at the GigaOM Structure: Data conference that “The
value of any piece of information is only known when you can connect it
with something else that arrives at a future point in time.
This is why data is stored, and what Alexander meant when he said the
NSA are “connecting the dots”. Patterns and meaning can be found in
metadata from a whole range of sources.
Because smart meters register every tiny up and down in energy use, they are, in effect, monitoring every activity in the home.
By studying three homes’ smart-meter records, researchers at the
University of Massachusetts were able to deduce not only how many people
were in each dwelling at any given time but also when they were using
their computers, coffee machines, and toasters. Incredibly, Kohno’s
group at the University of Washington was able to use tiny fluctuations
in power usage to figure out exactly what movies people were watching on
their TVs. (The play of imagery on the monitor creates a unique
fingerprint of electromagnetic interference that can be matched to a
database of such fingerprints.)
This has all gone way too far already. Mobile phones can be hacked so
audio and video can be activated remotely. So can laptops (girl was watched in the bath!), and all else that’ssmart
in some way. All of this is receiving a lot of attention in the media,
and my bet is that we are about to be sold Identity Management, courtesy
of the NSTIC, as a way to ‘protect ourselves’. Even if this does offer
us one extra layer of security from some thieves, it still means
granting control of our lives to a large corporation, and making
surveillance far easier for the NSA, CIA, FBI, etc.
Obviously, the people behind NSTIC, orIdentity Assurance in the UK,
won’t sell it you this way, when it’s ready - they’ll want you to have
forgotten about Edward Snowdon’s ‘revelations’ by then. After all, some
of the very same telcos that hand over our details to the NSA will be
playing the part of Internet gatekeepers in the global identity
ecosystem.
You’ll be told it’s all for you. They say they just want to protect you
from the big bad cyberbullies, and make your life easier by not having
to remember lots of passwords. You’ll be told it’s voluntary, that you
don’t have to sign up with an Identity Provider, but in fact, not
joining will eventually prevent you from participating in society: in
the near future, most health services, and all contact with the
government, will be online only, but you have to use a third party to do
so, i.e. register with an Identity Provider (IdP).
Not long after that, it will only be possible to pay for anything electronically, which of course you will need an IdP for. Yoursmart meter
will also be part of the identity ecosystem. To gain entrance to public
buildings, perhaps even your own house or car, you’ll have to use your
smart card/phone to prove who you are. All devices and all people in the
Internet of Things will have their own unique identity.
All brought to you by the Identity Providers – the creators of identity
profiles for each and every one of us, stored digitally and wondrously
accessible for law enforcement. Telcos such as AT&T and Microsoft
have previously 'complained' that they have had to devote whole teams to
the business of handing over information on citizens to the likes of
the NSA. With Identity Management, all of the information is aggregated,
and the problem of managing all that data is instead turned into a tidy
profit for the telcos for delivering a ‘service’ to the people.
The details released by Edward Snowden have caused an uproar, even in
the mainstream arena, showing how highly we all value our privacy.
Nonetheless, the public anxiety created by the leaks could be
manipulated to plead the case for Identity and Access Management – the
very aim of the NSTIC.
Hamilton believes the government is miscalculating what it owes by
leaving out certain unfunded liabilities that include government loan
guarantees, deposit insurance, and actions taken by the Federal Reserve
as well as the cost of other government trust funds. Factoring in those
figures brings the total amount the government owes to a staggering $70
trillion, he says.
Hamilton believes important areas of federal off-balance-sheet
commitments include loans for post-high school education, the Federal
Deposit Insurance Corporation and the Federal Reserve System. http://www.foxnews.com/politics/2013/08/15/california-economist-says-real-us-debt-70-trillion-not-16-trillion-government/?test=latestnews Economist: Real US Debt $70 Trillion, NotThe $16.9 Trillion The Government Claims
There was an odd sort of myth floating around the market that the
cash buyer crowd was somehow a tiny portion of the market, like a drop
of water in the vast ocean of home buying. This delusional dream played
into the fantasy that this housing market was naturally rising because
of overall household demand when in reality, it is being driven by
investors leveraging the artificial low rates created by the Fed.
The flood of money from Wall Street has been large. Even anecdotally,
it was apparent that cash buyers were driving the market given that
housing is a margin driven market. That is, at any given time only a
small portion of all homes are on the market for sale. However, an
analysis by non-other than Goldman Sachs shows that 60 percent of
all 2013 home sales are being driven by cash buyers. That is, the
middle class is largely being pushed out of this game and has become the
minority in this real estate market. Let us look into the data more
carefully.
Cash buyers only a small portion of the market?
I think the myth of cash buyers being a small part of the market fed
into the meme that the housing market was “organically” going up on the
underlying power of the economy. In reality, the market has been
bubbling up because hot money is voraciously fighting over itself to eat
up whatever inventory is available. The data now being released
confirms how massive the investor portion of the market is:
“(WSJ)
More than half of all homes sold last year and so far in 2013 have been
financed without a mortgage, according to an analysis by economists at
Goldman Sachs Group.
The analysis estimates that around 20% of all homes sold before the
housing crash were “all-cash” sales (or around 30% of sales by dollar
volume). But over the past seven years, the all-cash share of sales has
more than doubled, increasing by more than 30 percentage points,
according to economists Hui Shan, Marty Young and Charlie Himmelberg.”
Think about this more carefully. Even with the median home price of
$214,200 families still need to finance the purchase. The above chart
clearly shows that investor money
is really driving the bulk of the housing market. The low rates
promoted by the Fed were cast under the umbrella of helping out regular
families but in reality, they have turned into the next hot money play
for banks, hedge funds, and Wall Street. The fact that 60 percent of
all purchases in 2013 are being driven by the cash crowd is crazy (a 200
percent increase from the 20 percent pre-crash levels). The WSJ
article goes on to say:
“There’s no exact way to know who is responsible for
all of these cash purchases, though they are likely to include some
combination of investors, foreign buyers, and wealthy homeowners that
don’t want to go through the hassle of getting a mortgage before
closing on a sale. Mortgage lending standards have sharply tightened up
since the housing bubble, with banks scrutinizing borrowers’ tax returns
and bank statements to verify their incomes and the source of their
down payment.”
We’ve talked about this for years but the current percentage is
stunning. It is safe to say that your mom and pop American buyer is not
eating up all these properties for all cash. Just take a look at the
cash buying in Las Vegas:
This incredible trend also helps to explain the massive drop in mortgage applications but the rise in actual home sales:
Source: ZH
Some have argued that the “all cash” crowd isn’t really all cash
which may be true in some transaction but the above chart clearly shows
that mortgage financing has fallen dramatically since 2012 (below
pre-crash levels). This of course has occurred at a time of record low interest rates.
So the idea that low rates would spur your regular Joe and Jane to buy
homes doesn’t seem to be occurring. Unless Joe and Jane have hundreds
of thousands of dollars sitting around (which of course, is not the
case). Of course this also helps to explain the dramatic falling of the
home ownership rate as well:
Yet this unrelenting amount of investor buying has crowded out people
in various markets. Even in California where property prices are
rising dramatically and some areas are having homes sell at record
levels, the cash buying crowd is at record levels (roughly 30 percent of
purchases in one of the most expensive states in the country).
So much for the myth that the all cash crowd was a small portion of the market.
High-rolling businessman Ramon DeSage pleaded not guilty Thursday to charges of evading more than $31 million in taxes.
DeSage,
63, who is well-known on the Strip, is facing four new tax evasion
counts with previous wire fraud charges in what federal prosecutors say
was a scheme to defraud investors of roughly $190 million.
He was
charged two weeks ago in a superseding indictment, alleging he owes the
taxes on more than $87 million in income he failed to report from 2006
to 2009.
DeSage, who supplies luxury gifts to the casino
industry, is accused of under-reporting his income by $19.2 million in
2006, $27.7 million in 2007, $30.6 million in 2008 and $9.7 million in
2009.
U.S. Magistrate Judge Peggy Leen set a Sept. 10 trial date,
but DeSage’s defense lawyer, Richard Wright, said the trial is likely
to be continued.
Assistant U.S. Attorney Gregory Damm told Leen
he did not oppose allowing DeSage to remain on electronically monitored
home detention while he awaits trial.
DeSage and Wright declined to comment on the case outside the courtroom.
The indictment alleges DeSage used $175 million he obtained in the extensive fraud scheme “for gambling purposes.”
DeSage
is accused of using his main Las Vegas company, Cadeau Express, and
other companies to defraud his investors between 2005 and 2012.
He
pocketed the money to repay earlier investors, maintain his wealthy
lifestyle and cover millions of dollars in gambling losses at casinos
along the Strip, some of which he supplies with high-end customer goods,
according to the indictment.
On the Cadeau Express website, DeSage calls himself an international humanitarian and philanthropist.
DeSage
states that he was born into a “prestigious family” in Lebanon, was
educated in France and once worked as an attache for UNESCO.
Cadeau
Express is described on the website as a “unique company that caters to
hotels and casinos who roll out the red carpet for selective guests and
high-end gamblers.”
Prosecutors contend DeSage owns a 40,000-square foot palace in Lebanon and more than $10 million in real estate holdings there.
Internal
Revenue Service agents arrested DeSage on a criminal complaint in July
2012 after they feared he was about to flee to Lebanon.
He has denied trying to flee the country.
At 2:35, RT’s Prime Interest interviews Mike Maloney about Episode 2 of
his new video series Hidden Secrets of Money. Mike also discusses the
FED, gold and silver, and the coming end of the global dollar standard
monetary system.
Robert Wenzel Lew Rockwell.com Economic Policy Journal
According to Austrian Business Cycle Theory, when a central bank
slows its money printing that has fueled a manipulated stock market
boom, the stock market is very vulnerable to a crash.Murray Rothbard in
his book America’s Great Depression explained how it occurred before the October 1929 crash:
It is generally acknowledged that the great boom of the
1920s began around July, 1921, after a year or more of sharp recession,
and ended about July, 1929. Production and business activity began to
decline in July, 1929, although the famous stock market crash came in
October of that year. [...] the total money supply of the country,
beginning with $45.3 billion on June 30,1921 and reckoning the total,
along with its major constituents roughly semiannually thereafter. Over
the entire period of the boom, we find that the money supply increased
by $28.0 billion, a 61.8 percent increase over the eight-year period.
This is an average annual increase of 7.7 percent, a very sizable degree
of inflation. Total bank deposits increased by 51.1 percent, savings
and loan shares by 224.3 percent, and net life insurance policy
reserves by 113.8 percent. The major increases took place in 1922–1923,
late 1924, late 1925, and late 1927. The abrupt leveling off occurred
precisely when we would expect—in the first half of 1929, when bank
deposits declined and the total money supply remained almost constant.
The money supplied slowed before the October 1987 crash:
It slowed before the 2008 September Financial Crisis:
And it is slowing again now:
Austrian economics also teaches us that it is a very complex world
and that there are many, many inputs on an economy at any one time, so
just because something occurred a certain way in the past it doesn’t
mean it will develop exactly that way in the future, BUT central bank
money manipulation does play a big role and it is crashing once again.
