News Items

Jeffrey Lacker: “Fed Has No Interest in Stopping Bitcoin”

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While I don’t believe a word the professional criminals at the Federal Reserve say about anything, this is nonetheless an interesting clip from CNBC earlier today. The guest was Jeffrey Lacker, the President of the Federal Reserve Bank of Richmond. Of course, I do note that after Lacker says his statement about the lack of … Read more

McDonald’s Advises its Own Employees to Avoid Fast Food

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McDonald’s is simply the gift that keeps on giving. The company’s “McResource” website has made mistake after mistake all year, several of which I have have covered previously, including advice to broke employees to quit complaining, and their publication earlier in the year of budgetary advice that included not using heat and taking on a … Read more

The Times of India: “Almost Every Passenger on a Flight from Dubai to Calicut Was Found Carrying 1kg of Gold”

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Watching Indian bureaucrats attempt to halt more than one billion human beings’ desire for gold has been one of the more entertaining and pathetic stories of all of 2013. It is one that I have covered on many occasions, the latest being my post from earlier this month:  Gold Smuggling Increases 7x in India and Surpasses Illegal Drug Trade.

Well it appears the trend continues, potentially at an accelerated rate, as we just learned that, incredibly, “almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold.” As I have said many times in the past, if an Indian wants their gold, they will have their gold. 

CHENNAI: Faced with curbs on gold imports and crash in international prices leaving it cheaper in other countries, gold houses and smugglers are turning to NRIs to bring in the yellow metal legally after paying duty. Any NRI, who has stayed abroad for more than six months, is allowed to bring in 1kg gold.

It was evident last week when almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold, totalling up to 80kg (worth about Rs 24 crore). At Chennai airport, 13 passengers brought the legally permitted quantity of gold in the past one week.

“It’s not illegal. But the 80kg gold that landed in Calicut surprised us. We soon got information that two smugglers in Dubai and their links in Calicut were behind this operation, offering free tickets to several passengers,” said an official. The passengers were mostly Indian labourers in Dubai, used as carriers by people who were otherwise looking at illegal means, he said. “We have started tracing the origin and route of gold after intelligence pointed to the role of smugglers,” he said.

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Paul Krugman Once Again Irrationally Attacks Bitcoin…Here’s My Response

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The last aggressive anti-Bitcoin tirade I recall from Paul Krugman was written on April 14th of this year. It was such an irrational piece of drivel that I decided to respond to his Op-ed nearly paragraph by paragraph in my piece, Paul Krugman Goes on the Attack: Calls Bitcoin “Antisocial,” which I strongly suggest you read if you haven’t already.

What is most interesting about that previous article in hindsight is that he wrote it right after Bitcoin experienced its first major crash of 2013 (there have been two thus far, both after greater than 10-fold increases in the price). While I know Krugman periodically attacks Bitcoin, it’s interesting that this latest Bitcoin hit piece also came directly after the second crash. For those who are holders of Bitcoin, this should be taken as a very positive price signal going forward. Krugman’s prior article was written the day before the abolsute low price for the decline was reached at $50/btc on April 15th. It seems that Krugman becomes particularly comfortable slamming Bitcoin only after a price crash.

In any event, his latest Op-ed is almost as bad as the first one, and so I thought it’d be worthwhile to highlight his ignorance, irrationality and blatant use of statist propaganda once again. So let’s go.

From the New York Times:

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How the NSA Paid Security Firm $10 Million to Promote Flawed Encryption

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Stories documenting the NSA’s intentional attempt to weaken encryption standards have been floating around for months now, but Reuters put out a story Friday that documents just how far the out of control agency has gone to weaken security for hundreds of millions of computer users.

RSA has been a leader in cryptography ever since it revolutionized the field after its genesis in the 1970s from three MIT professors. The company actually provided a lot of successful pushback against the NSA and the Clinton Administration’s push to introduce the Clipper Chip in the 1990’s, but has completely sold out in recent years as it became more corporatized and many of the technology leaders left. If it is true that the only received $10 million from the NSA, they sold out the American public very cheaply. RSA is now owned by EMC

From Reuters:

Documents leaked by former NSA contractor Edward Snowden show that the NSA created and promulgated a flawed formula for generating random numbers to create a “back door” in encryption products, the New York Times reported in September. Reuters later reported that RSA became the most important distributor of that formula by rolling it into a software tool called Bsafe that is used to enhance security in personal computers and many other products.

Undisclosed until now was that RSA received $10 million in a deal that set the NSA formula as the preferred, or default, method for number generation in the BSafe software, according to two sources familiar with the contract. Although that sum might seem paltry, it represented more than a third of the revenue that the relevant division at RSA had taken in during the entire previous year, securities filings show.

The earlier disclosures of RSA’s entanglement with the NSA already had shocked some in the close-knit world of computer security experts. The company had a long history of championing privacy and security, and it played a leading role in blocking a 1990s effort by the NSA to require a special chip to enable spying on a wide range of computer and communications products.

Started by MIT professors in the 1970s and led for years by ex-Marine Jim Bidzos, RSA and its core algorithm were both named for the last initials of the three founders, who revolutionized cryptography. Little known to the public, RSA’s encryption tools have been licensed by most large technology companies, which in turn use them to protect computers used by hundreds of millions of people.

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CNN Claims “Americans Want Security Over Freedom”

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Wow, this is straight up insane propaganda at the highest level. He is not even trying to hide the message. CNN’s Jake Tapper just comes out and says it: I think the American people, honestly, want security over freedom. – Jake Tapper Compare that to let’s say, Benjamin Franklin: Any society that would give up a … Read more

Video of the Day: Interview with Coinbase Founder Brian Armstrong

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This is one of the most interesting Bitcoin-related videos I have ever watched, and I have watched plenty. Coinbase has been at the center of BTC news as of late after it became the recipient of the largest investment ever in the Bitcoin space when Andreessen Horowitz announced a $25 million capital infusion. I personally … Read more

Meet the “Bandits’ Club” – The TBTF Wall Street Cartel Rigging the FX Market

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Another day, another tale of how the “Too Big to Jail” Wall Street cartel manipulates a major global market with no repercussions whatsoever. Must be nice having essentially every Congressperson and regulator in your back pocket. Get caught? Pay a little fine and get on with it. Everyone wins!

Actually, everyone loses. Except for the handful of FX manipulators, rigging global currency markets from their Essex villages outside of London. These traders for major TBTF banks refer to themselves by various names in their now silenced Bloomberg chat rooms, from The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and “The Mafia.” Very classy guys. Glad we bailed your asses out…

More from Bloomberg:

Now regulators from Bern to Washington are examining evidence first reported by Bloomberg News in June that a small group of senior traders at big banks had something else on their screens: details of each other’s client orders. Sharing that information may have helped dealers at firms, including JPMorgan Chase & Co., Citigroup Inc., UBS AG and Barclays Plc, manipulate prices to maximize their own profits, according to five people with knowledge of the probes.

“This is a market where there is no law and people have turned a blind eye,” said former Senator Ted Kaufman, a Delaware Democrat who sponsored legislation in 2010 to shrink the largest U.S. banks. “We’ve been talking about banks being too big to fail. What’s almost as big a problem is banks too big to manage.”

At the center of the inquiries are instant-message groups with names such as “The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and “The Mafia,” in which dealers exchanged information on client orders and agreed how to trade at the fix, according to the people with knowledge of the investigations who asked not to be identified because the matter is pending. Some traders took part in multiple chat rooms, one of them said.

The currency investigations are taking place as authorities grapple with a widening list of scandals involving the manipulation by banks of benchmark financial rates, including the London interbank offered rate, or Libor, and ISDAfix, used to determine the value of interest-rate derivatives. The U.K. regulator also is reviewing how prices are set in the $20 trillion gold market, according to a person with knowledge of the matter.

Don’t be ridiculous, everyone knows the gold market is the only market on earth that isn’t manipulated.

“Some of these problems developed over many years without anybody speaking up,” said Andrew Tyrie, chairman of Britain’s Commission on Banking Standards and Parliament’s Treasury Select Committee. “This is remarkable. It suggests something very wrong with the culture at these institutions.”

Blasphemy!

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HSBC Receives Slap on the Wrist for Helping to Finance Terrorists

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The “Too Big Too Jail” nonsense that surrounds large U.S. banks and their above the law employees has been glaringly obvious and thoroughly documented for quite some time now. Yet what represents an even larger slap in the face to millions of hard-working, law-abiding citizens, is how relentlessly the “justice” system goes after small time criminals, while merely fining oligarch thieves for far worse crimes. I first covered this theme earlier this year in my piece Some Money Launderers are “More Equal” than Others, which discussed how HSBC was caught laundering billions of dollars for Mexican drug cartels.

Well HSBC is back in the news. This time it relates to their transferring funds on the behalf of financiers for the militant group Hezbollah. If transactions such as these had even the slightest link to Bitcoin, there would be endless uproar, calls for countless Congressional hearings and demands to stop the currency at all costs. But when HSBC is caught doing it, what happens? A $32,400 settlement.

More from The Huffington Post:

A major U.S. bank has agreed to a settlement for transferring funds on the behalf of financiers for the militant group Hezbollah, the Treasury Department announced on Tuesday.

Concluding that HSBC’s actions “were not the result of willful or reckless conduct,” Treasury’s Office of Foreign Assets Control accepted a $32,400 settlement from the bank. Treasury noted, as did HSBC in a statement to HuffPost, that the violations were voluntarily reported.

Everett Stern, a former HSBC compliance officer who complained to his supervisors about the Hezbollah-linked transactions, told HuffPost he was “ecstatic and depressed at the same time.”

“Those are my transactions, I reported them,” he said, satisfied that the government was taking action. But, he added, “Where I am upset was those were a handful of transactions, and I saw hundreds of millions of dollars” being transferred.

Stern said he hopes the government’s enforcement actions against HSBC have not come to an end with the latest settlement. “They admit to financing terrorism and they get fined $32,000. Where if I were to do that, I would go to jail for life,” he said.

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