Big Trouble in the Pacific – Vietnamese Mob Burns Foreign Factories in Anti-China Riots

As the war/civil unrest cycle continues to march forward, there appear to be two main geopolitical tinderboxes percolating at the moment. While we all know about Ukraine/Russia, which will only get worse in the months ahead, the South China Sea looks like it may be about to burst out into overt conflict.

Yesterday, I noticed a post on Zerohedge about how China had moved an oil rig into Vietnam’s Exclusive Economic Zone (EEZ), which was an obvious provocation accompanied by 86 Chinese vessels. They note:

With the additional deployment of a submarine and a missile ship, there are now 86 Chinese vessels accompanying the oil rig’s installation in Vietnam’s Exclusive Economic Zone (EEZ). Local news reports that 3 Chinese military ships are surrounding a Vietnamese marine police vessel this morning and water cannon use continues against Vietnamese ships. We addressed the who, what, where, when and how of China’s HD-981 oil rig foray into Vietnamese waters here but, as we discuss below, the enduring question, as with many of China’s recently provocative actions in the Asia-Pacific, remains why?

So what really interests me at this point are the massive riots that broke out last night in southern Vietnam in response. The mob irrationally damaged mostly Taiwanese factories, but the focus of the ire was clear: China.

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Reuters reports that:

(Reuters) – Thousands of Vietnamese set fire to foreign factories and rampaged in industrial zones in the south of the country in an angry reaction to Chinese oil drilling in a part of the South China Sea claimed by Vietnam, officials said on Wednesday.

The brunt of Tuesday’s violence, one of the worst breakdowns in Sino-Vietnamese relations since the neighbors fought a brief border war in 1979, appears to have been borne by Taiwanese firms in the zones in Binh Duong and Dong Nai provinces that were mistaken for Chinese-owned companies.

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How Marijuana Legalization in America is Destroying Mexican Drug Cartel Business

Nothing is more amusing (and sad) than when I see some ignorant out of stater commenting about how nightmarish the legalization of marijuana has been for Colorado. The most high-profile and hilarious example of this came from disgraced New Jersey Governor Chris Christie, who I have criticized sharply on several occasions, here, here and here.He foolishly spouted some hysterical nonsense last month when he said:

“See if you want to live in a major city in Colorado, where there’s head shops popping up on every corner and people flying into your airport just to come and get high. To me, it’s just not the quality of life we want to have here in the state of New Jersey and there’s no tax revenue that’s worth that.”

Honestly, what planet does this clown live on? As someone who actually lives in Colorado, I can tell you that the only thing that has changed since legalization is that there is a greater sense of freedom and people are no longer getting arrested in droves for non-violent drug possession charges. Let’s not forget that the police arrest someone every two seconds in America, many of which are for mere drug possession charges. Apparently, Christie thinks this is a good thing and ultimately results in this mythical wonderful “quality of life” that apparently exists in some corner of New Jersey where rainbow farting unicorns roam the countryside.

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As someone who spent nearly three decades in the New York metro area, and who has lived in Colorado now for over three years, I can tell you there’s no comparison. I’ve met many, many people who have intentionally left New Jersey for Colorado, yet I’ve never met a single person who has intentionally left Colorado for New Jersey. Perhaps that person exists and is currently flying back east on his unicorn and is therefore unavailable for comment.

Anyway, while we are on the topic, the Huffington Post posted a great article comparing the two states. They note:

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Rebellion in the USA – Protesters Take Over Albuquerque City Council and Attempt to Arrest Police Chief

There is something very, very wrong with the Albuquerque, New Mexico police department, and the citizens have just about had enough. Before I get into the heart of this story, I need to provide you with a little background. The Albuquerque Police Department (APD) is well known for its outrageous and inappropriate use of violence. So … Read more

Silicon Valley Billionaire Buys Popular Beach and Then Blocks Public Access

Vinod Kholsa, co-founder of Sun Microsystems and well known Silicon Valley venture capitalist, is at the center of a lawsuit revolving around the popular Northern California destination Martins Beach, located six miles south of Half Moon Bay. The beach has always been popular with families and surfers alike, and the prior owners had always provided access for a $5 fee. Mr. Kholsa has taken a different approach, which has consisted of putting up a locked gate to block the beach’s only road access point and painting over a billboard welcoming people to the beach.

Mr. Kholsa sees himself as an “eco warrior” and is a darling of the Democratic party (he held a private dinner with Barack Obama and U.S. Senators after the Snowden revelations first hit), yet his behavior in this affair portrays him as the typical elitist oligarch limousine liberal. I guess we shouldn’t be surprised by the behavior of a man who’s firm hired British war criminal Tony Blair back in 2010 (was this before or after Blair took on his role at JP Morgan).

From SFGate we learn that:

SAN FRANCISCO — The billionaire landowner who bought a popular beach in San Mateo County and then locked out the public was evasive and uncooperative when questioned Monday about his decision, stating repeatedly he “did not recollect” conversations, letters or legal documents.

Vinod Khosla testified during the civil trial in San Mateo County Superior Court that he did not remember why he set up two limited liability companies to buy Martins Beach, what amount he paid for the property, when he bought it or why the decision was made to keep the public out.

For such a brilliant guy, he certainly seems to have a selective memory when it comes to peasant access to his beach.

The Silicon Valley venture capitalist remained calm but gave no ground during the intense questioning – sometimes tinged with disbelief and sarcasm – by the lead attorney for the Surfrider Foundation, which sued Khosla for blocking the only access road to the beach. Khosla explained that he never had a conversation about the property without his lawyers present, a strategy that allowed him to invoke attorney-client privilege for virtually every question whose answer he could recollect.

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Glenn Greenwald on the 2016 Elections – “They’ll Probably Have a Gay Person After Hillary”

Glenn Greenwald is not one known for pulling punches, and in this excellent interview with GQ Magazine titled, The Man Who Knows Too Much, he is in particularly rare form. Credit must be given to the interviewer, who asked a wide range of very interesting questions that allowed Greenwald the opportunity to discuss a lot more than merely his Pulitzer Prize winning journalism on the Edward Snowden documents. From the fact that the biggest NSA stories have yet to be published, to thoughts on the 2016 elections, this interview really has it all.

Here are some of what I thought were the most interesting and informative excerpts. From GQ:

How much more is there to release—and what burden do you feel to get it out there?

We published the first article [about the NSA collecting Verizon phone records] while I was in Hong Kong last June and won’t stop until we’re done. I think we will end the big stories in about three months or so [June or July 2014]. I like to think of it as a fireworks show: You want to save your best for last. There’s a story that from the beginning I thought would be our biggest, and I’m saving that. The last one is the one where the sky is all covered in spectacular multicolored hues. This will be the finale, a big missing piece. Snowden knows about it and is excited about it.

What do you think would happen if Snowden were to fly from, say, Moscow to New York today?

I think it would be a huge media circus, and then he would be instantly arrested and probably rendered incommunicado for the entire duration of his judicial proceeding on the grounds that he has classified information that could damage the United States. The prosecutors would say he would have to be kept away from media. He would just be disappeared. Rendered completely invisible and mute.

When Daniel Ellsberg was on trial [for leaking the Pentagon Papers], he was allowed to speak out and defend himself.Which is why Ellsberg wrote an op-ed in The Washington Post last July saying Snowden was absolutely right to flee, because America has changed so drastically. Snowden would never be released on bail and would never get a fair trial.

Yeah, like the incident you quote in the book about Bill Keller [former executive editor of The New York Times] on the BBC…

Yeah, where he’s boasting about the fact that they don’t publish things without the government being happy with what they’re doing. And it obviously has resulted in the suppression of all kinds of important stories, which is the most inexcusable thing that can happen in journalism. And that has happened repeatedly at the Times. I think they’ve essentially become this mouthpiece for those in power, perhaps not consciously. When I make this critique, people at The New York Times are offended, because they actually don’t believe that it’s happening. And they’re not lying. It’s a more subtle dynamic than the government marching in and issuing memos to the Timesabout what they should and shouldn’t publish. It’s just a cultural approach to the news that basically says that the parameters of what can be discussed and viewed as reasonable are the ones that are endorsed by the most powerful financial and political factions in New York and Washington. They’re reflecting the mind-set of those elite groups rather than challenging them or confronting them. Obviously there are exceptions. There’s some good journalists there; they do some good journalism; they’ve done some adversarial journalism. It’s not an absolute, pure, constant, all-consuming formula. But in general, that’s become the posture of the Times.

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SEC Official Claims Over 50% of Private Equity Audits Reveal Criminal Behavior

Last week, Yves Smith of Naked Capitalism penned a fantastic piece leveraging a talk by SEC official Drew Bowden. Mr. Bowden heads the SEC’s examinations unit, and at a private equity conference he explained that “more than 50 percent of private equity firms it has audited have engaged in serious infractions of securities laws.” What is so incredible about the talk, is that while Bowden goes into details of shady practice after shady practice, he ultimately admits that the SEC isn’t being particularly aggressive with the private equity industry because “we believe that most people in the industry are trying to do the right thing, to help their clients, to grow their business, and to provide for their owners and employees.”

Yes, go ahead and read that again. The industry regulator is assuming that private equity firms are trying to do the right thing, despite the fact that audits demonstrated to a tune of greater than 50% the opposite to be true.

Private equity managers are some of the savviest people in finance and they know exactly what they are doing. What the SEC is basically admitting, is that private equity firms are also “too big to regulate” and, of course, “too big to jail.” After all, every single person at the SEC is likely angling for a big payday at a PE firm via the revolving door. Of course they aren’t going to regulate.

Meanwhile, if you are just an average citizen, you will be prosecuted to the fullest extent of the law if you commit even the most minor infraction. This sort of behavior led to the death of prodigy Aaron Swartz, the incarceration of political prisoner Barrett Brown, a swat team raid on a young kid in Peroia, Illinois for a parody Twitter account, the firing of a constriction worker for not paying for a $0.89 soda refill. This list goes on and on. Yet private equity crimes, which likely run into the billions collectively, are treated with kid gloves. As I have maintained many times before, this is how the social fabric of a society dies.

From Naked Capitalism:

At a private equity conference this week, Drew Bowden, a senior SEC official, told private equity fund managers and their investors in considerable detail about how the agency had found widespread stealing and other serious infractions in its audits of private equity firms.

In the years that I’ve been reading speeches from regulators, I’ve never seen anything remotely like Bowden’s talk. I’ve embedded it at the end of this post and strongly encourage you to read it in full.

Despite the at times disconcertingly polite tone, the SEC has now announced that more than 50 percent of private equity firms it has audited have engaged in serious infractions of securities laws. These abuses were detected thanks to to Dodd Frank. Private equity general partners had been unregulated until early 2012, when they were required to SEC regulation as investment advisers.

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Tim Geithner Admits “Too Big To Fail” Hasn’t Gone Anywhere (and that’s the way he likes it)

But it is now clear that Geithner never believed his own talking points. To him, too-big-to-fail and the so-called moral hazard, or safety net, that it would create can’t really ever be fully taken away. During his lecture to Summers’s class, one student asked a question about “resolution authority,” a provision of the reform laws that is supposed to let the government wind down a complex financial institution without creating a domino effect. The question prompted Geithner onto a tangent about too-big-to-fail. “Does it still exist?” he said. “Yeah, of course it does.” Ending too-big-to-fail was “like Moby-Dick for economists or regulators. It’s not just quixotic, it’s misguided.”

– From The New York Times Magazine article, What Timothy Geithner Really Thinks

Never in a million years did I think I’d ever use an article by Andrew Ross Sorkin as the basis of a blog post, but here we are. While certainly entirely unintentional, his article serves to further solidify as accurate the prevailing notion across America that former head of the New York Federal Reserve and Obama’s first Treasury Secretary, Timothy Geithner, is nothing more than an addled, crony, bureaucratic banker cabin boy.

There are so many choice nuggets in this article, all of which make Geithner look worse and worse as you read on. It’s almost as if he is some sort of lab created, android bankster butler sent back to earth from the future in order to ensure Wall Street bonuses never experience a downtick. It’s truly remarkable. Early in the article, we learn a little bit about Timmy’s family history, and how, shocker, it overlaps quite nicely with Obama’s own family history.

The following lines from this day forth should be forever referred to as the paragraph that launched a thousand conspiracy blogs. We learn that:

But Geithner and Obama had a somewhat natural rapport. Geithner, like Obama, had an itinerant childhood. His father worked for U.S.A.I.D., and the family lived in India, Zimbabwe, Zambia and Thailand. In the conversation, they discovered that Geithner’s father ran the Ford Foundation’s Asia grant-writing program in the 1980s at the same time that Obama’s mother was at its office in Indonesia. It was a nice coincidence, Geithner says, but it still didn’t make him want the job.

Well yes, quite the coincidence indeed. Also interesting that Geithner’s father worked for U.S. A.I.D., which is the organization recently revealed to have launched the fake Cuban Twitter in an attempt to overthrow the government there. In case you missed that, you can get caught up in my post: Conspiracy Fact – How the U.S. Government Covertly Invented a “Cuban Twitter” to Create Revolution. Meanwhile, Democracy now did an expose titled, Is USAID the New CIA?

While the above is certainly interesting and deserves more research on many fronts from folks far more qualified than me, let’s move on to the meat of the article and Geithner’s unique form of bankster worship. Moving along…

But Geithner’s refusal to condemn the bankers became a recurrent theme during his time at Treasury. According to Bernanke, “I didn’t and Tim didn’t go very far in lambasting individuals in Wall Street, maybe partly because we were more focused on the problem than on the politics.” Others, however, have suggested that Geithner was simply too cozy with Wall Street. He had never worked as a banker himself, but he grew up inside the bubble of elites. (Before going into government, his first job was working for Henry Kissinger at Kissinger Associates.) He was tutored at Treasury by Summers, who later worked for the hedge fund D. E. Shaw & Company, and Rubin, who came up through Goldman Sachs and eventually joined the board of Citigroup, where he has been blamed in some circles for its taking on excessive risky debt that nearly caused the firm to collapse. Each man played a significant role in deregulating the financial industry in the 1990s by supporting the repeal of the Glass-Steagall Act, which separated commercial and investment banking; they also pushed to limit future regulation of derivatives.

There you have it. Geithner and Bernanke never saw the bankers and their practices as a problem. Rather, they seemed to believe that Poseidon came out of nowhere and splashed a once in a million year tidal wave upon the system and only trillions in free money to financial criminals could save the world.

Oh, and Geithner’s first job was working for Henry Kissinger. Quite the pedigree…

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BitPay Purportedly Raises $30 Million from Investors Including Richard Branson in Largest Bitcoin Investment Round Ever

Very, very big news just broke in the Bitcoin space. According to TechCrunch, Bitcoin payment processor Bitpay has just raised $30 million in what would be the largest single round of fundraising ever in the Bitcoin space. It slightly surpasses the prior largest round, announced late last year by the other major Bitcoin payment processor Coinbase for $25 million.

BitPay is a company that is very familiar to readers of this site. It has experienced exponential growth over the past year or so. I most recently highlighted this in my post: BitPay is Now Adding 1,000 New Merchants Per Week.

This round implies a total valuation for BitPay of $160 million and it makes me wonder whether or not it could herald the beginning of another major move higher in the Bitcoin price. All year, I have been saying that I didn’t think the price would move until the summer. With summer less than two months away, I will become much more sensitive to news.

What makes this investment even more exciting is that Richard Branson (and Yahoo co-founder Jerry Yang) is purported to be involved. Considering his company Virgin Galatic has already been accepting bitcoin via BitPay, he is clearly impressed with the company and sees a very bright future for Bitcoin. As do I. This is big.

From TechCrunch:

We’re hearing that BitPay, a platform that processes payments in bitcoin for merchants, is raising the field’s biggest round yet. The company is raising $30 million on a roughly $160 million valuation in a round led by Index Ventures, with Richard Branson and Yahoo co-founder Jerry Yang participating. BitPay declined to comment.

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When Asked if the U.S. is a Capitalist Democracy or Oligarchy, Janet Yellen Can’t Answer…

During yesterday’s Senate hearings, Janet Yellen was asked by Senator Bernie Sanders if the U.S. was a capitalist democracy or has morphed into an oligarchy. While readers of this site already know the answer to this question, which was recently proved empirically by a Princeton and Northwestern academic study, it was still stunning to note … Read more

FEC Chairman Lee E. Goodman Warns of Forthcoming Government Media Censorship

When I first read this story I wasn’t sure whether to highlight it or not. While the claims made by Federal Elections Committee (FEC) Chairman Lee E. Goodman are extraordinarily frightening, sometimes people with strong partisan leanings can exaggerate threats and so I like to be careful. I’m not certain if this is the case with Mr. Goodman, but since it is his word against other folks at the FEC and I don’t work there, it’s hard to know what the true state of affairs is.

Nevertheless, the fact that Ajit Pai, a commissioner at the FCC, recently warned in a Wall Street Journal editorial of government plans to “monitor” media organizations, makes me concerned enough to post on it. I highlighted the Ajit Pai editorial back in February in my post: The Obama Administration Plans to Embed “Government Researchers” to Monitor Media Organizations.

As far as the Goodman comments, The Washington Examiner reports that:

Government officials, reacting to the growing voice of conservative news outlets, especially on the internet, are angling to curtail the media’s exemption from federal election laws governing political organizations, a potentially chilling intervention that the chairman of the Federal Election Commission is vowing to fight.

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