Bernanke’s Not Wasting Any Time – Earns $250,000+ for a Speech in Abu Dhabi

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Ben Bernanke isn’t wasting any time cashing in on what might be the greatest transfer of wealth in history from 99.9% of the world’s population to a handful of connected oligarchs and their political minions. Cronyism does indeed pay well, even if bureaucrats have to wait until they leave office to collect.

The Bernank isn’t wasting any time ringing the register.

From Reuters:

Former Federal Reserve Chairman Ben Bernanke said the U.S. central bank could have done more to fight the country’s financial crisis and that he struggled to find the right way to communicate with markets.

“We could have done some things on the margin to mitigate somewhat the crisis,” Bernanke, 60, said on Tuesday in his first public speaking engagement since he stepped down in January after eight years heading the Fed.

“Although we have been very aggressive, I think on the monetary policy front we could have been even more aggressive.”

“This is going to sound very obvious but the first thing we learned is that the U.S. is not invulnerable to financial crises,” Bernanke said.

Um, so you thought it was? Never forget that these are the clowns running the show.

Bernanke said he could now speak more freely about the crisis than he could while at the Fed – “I can say whatever I want” – and in remarks to over 1,000 bankers and financial professionals in the capital of the United Arab Emirates, he made clear that he had regrets.

Bernanke received at least $250,000 for his appearance at the financial conference staged by National Bank of Abu Dhabi NBAD.AD, the UAE’s largest bank, according to sources familiar the matter. NBAD did not announce the fee.

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Official in Charge of Guidelines for British Internet Porn Filters Arrested on Child Porn Charges

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Last summer, I wrote an article titled: How Internet in the UK is “Sleepwalking into Censorship.” That post detailed how plans in the UK to unveil default internet filters, sold to the public under the guise of “blocking child porn” and all sorts of other unethical and illegal activities, would actually provide a backdoor to censoring the internet.

Well it turns out it is even worse than that. Apparently, Patrick Rock, an official who helped draw up guidelines on Internet porn filters, has been arrested for child porn. You can’t make this stuff up.

From Raw Story:

A senior aide to British Prime Minister David Cameron has resigned after being arrested on suspicion of child pornography offenses, Downing Street confirmed Monday.

Patrick Rock, 62, was arrested by officers from the National Crime Agency last month.

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The Debt Bubble Expands as Auto Loan Amounts Hit a New Record

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Is anyone surprised that the poorest and least credit worthy of Americans are being saddled with piles of debt in order to buy new cars? It’s not enough that a generation of our citizens will toil pointlessly to pay off more than $1 trillion of student loans, we may as well add some other form of debt burden on top of it.

It’s hard to even imagine this is happening so shortly after the last credit bubble train wreck, but happening it is. Creative ways for people to purchase cars they can’t afford have been on my radar screen for some time now, and if you recall, I posted an article last April titled: Just Keep Dancing: Introducing the 97-Month Auto Loan.

Well the dancing has continued, and now we have Americans borrowing at all-time record levels to buy cars. USA! USA!

From CNBC:

A combination of higher prices for new cars and relatively low rates for auto loans means Americans are borrowing a record amount to pay for their new rides.

According to Experian Automotive, which tracks millions of auto loans written each quarter, the average amount borrowed by car buyers last quarter climbed above $27,000 for the first time ever.

According to Experian, the average auto loan in fourth quarter 2013 was $27,430—an increase of $739 compared with the same period of 2012. The average used car loan was $345 higher, coming in at $17,974.

Those with non-prime credit ratings—or credit scores between 620 and 679—had the highest average auto loan. For these borrowers, the average new car loan rose more than $1,500, to a new high of $29,385.

Not surprisingly, those with subprime credit ratings—credit scores between 550 and 619—had the highest average monthly payment, of $499.

Yep, no doubt this will turn out just peachy.

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New York Banking Regulator Benjamin Lawsky Thinks Mt. Gox Collapse Could Help Bitcoin

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Many people have been speculating all day as to why Bitcoin is up so much. The guesses have ranged from oligarchs worried about governments freezing their global bank accounts, to the UK moving away from a Bitcoin trading tax. While both those things may have played a role, I think the primary driver might be be comments from Benjamin Lawsky, superintendent of New York’s Department of Financial Services, on the sidelines of a banking conference today.

I’m not sure what time these comments were made, but it appears Lawsky wants to make sure New York state ends up being a global center for Bitcoin trading. This seems like a big deal to me.

From the UK’s Telegraph:

The collapse of the bitcoin exchange Mt Gox is part of a struggle for survival that could ultimately strengthen the virtual currency industry, New York’s banking regulator has said.

“It’s on the one hand a setback, on the other hand it will cause further improvements in this industry and some more regulatory involvement,” Benjamin Lawsky, superintendent of New York’s Department of Financial Services, told Reuters.

“It’s part of [a] shaking out,” he said on the sidelines of a banking conference in the US.

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Seth Klarman Compares Phony U.S. Economy to “The Truman Show”

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Seth Klarman is one of the most talented fund managers of our time. I have been consistently awed by his intelligence and consistent performance, as well as a strong sense character and honestly.

ValueWalk just put together a synopsis of his latest investor letter, and there are some choice phrases in there. While I completely disagree with him on Bitcoin (he seems to see it as merely a currency rather than an efficient, global, P2P, decentralized payment system), I’m not going to hold that against him.

Now from ValueWalk:

Baupost Group, among the largest hedge funds in the world, returned $4 billion in assets to clients at the end of 2013 because it didn’t want to grow too quickly and dilute performance, according to an investor letter reviewed by ValueWalk.  Seth Klarman’s fund, which in 2013 had a high of 50% of his portfolio in cash, up from 36% in 2012, posted 2013 returns in the mid-teens consistent with the fund’s nearly 22-year track record.

Like many of the best market analysts, Seth Klarman looks at both sides of the issue, the bull and bear case, in depth.  “If you’re more focused on downside than upside, if you’re more interested in return of capital than return on capital, if you have any sense of market history, then there’s more than enough to be concerned about,” he wrote.  Citing a policy of near-zero short-term interest rates that continues to distort reality and will have long term consequences, he ominously noted “we can draw no legitimate conclusions about the Fed’s ability to end QE without severe consequences,” a thought pervasive among many top fund managers. “Fiscal stimulus, in the form of sizable deficits, has propped up the consumer, thereby inflating corporate revenues and earnings. But what is the right multiple to pay on juiced corporate earnings?”

“In an ominous sign, a recent survey of U.S. investment newsletters by Investors Intelligence found the lowest proportion of bears since the ill-fated year of 1987,” he wrote. “A paucity of bears is one of the most reliable reverse indicators of market psychology. In the financial world, things are hunky dory; in the real world, not so much. Is the feel-good upward march of people’s 401(k)s, mutual fund balances, CNBC hype, and hedge fund bonuses eroding the objectivity of their assessments of the real world? We can say with some conviction that it almost always does. Frankly, wouldn’t it be easier if the Fed would just announce the proper level for the S&P, and spare us all the policy announcements and market gyrations?” he said in a somewhat hilarious moment that bears a degree of truth.

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Another Thing Banned in NYC – Early Morning Jogs in Central Park

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Sometimes I look at how NYC has been transformed in recent years and I just shake my head. It has become so similar to one of those elite communities in Huxley’s Brave New World. Just a haven for cry baby bailed out bankers running amok, tossing their Fed provided fiat all over the place. As I have said before, the city of my birth has become Disney Land for Wall Street, with the NYPD basically a private enforcement arm of JP Morgan and the TBTF banks.

To scared Manhattanites everywhere, fear not. The departure of Mayor Bloomberg has apparently done nothing to stop the city’s evolution into full blown nanny-state.

The latest thing New Yorkers can’t do is jog in Central Park early in the morning. Just to keep you peasants safe…

From the Daily News:

A city cop issued summonses to Peter Shankman and a friend for the crime of jogging in Central Park at 4:30 a.m. The park is closed between 1 a.m. and 6 a.m. — even to fitness freaks.

“It’s such a joke, but I’m like, seriously?” Shankman, 41, told the Daily News on Saturday.

“I was expecting to see ‘Candid Camera!’ You’re writing me a summons for exercising?”

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Is Major Censorship Happening on Reddit? How Glenn Greenwald’s Blockbuster Article Was Banned Over and Over

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I’m not a regular Reddit user. I signed up to try it last year because I noticed my site traffic exploded whenever one of my posts got upvoted on the forum. Since I never actually crossed over into a consistent user, I’m still trying to get my head around how the community operates. Headlines in recent days about the fact that Glenn Greenwald’s blockbuster article on the Intercept detailing how spy agencies work to intentionally ruin a person’s reputation using lies and false stories, was consistently being banned on the subreddit “r/news” have been making the rounds.

For those unaware, r/news is a default subreddit which all users are automatically subscribed to, thus it generates a huge amount of traffic. It’s basically the front page news section of the 64th most popular website in the world (according to Alexa data). That’s a big freakin’ deal.

Like other subreddits, r/news has rules and those rules are enforced by a group of people known as moderators. The categories r/news aims to avoid are:

Opinion/Analysis. This section includes domains such as Alternet, DemandProgress, and OpposingViews – basically any domain which predominantly purports misleading or analytic content, or opinionated content (such as op-eds), or content which intends to promote one cause over another. /r/news is for strictly factual news reporting, and as such opinion posts and analysis posts are removed.

Not news. This section includes domains such as change.org, facebook.com and kickstarter.com. While these may be mostly self-evident, the section is added to filter out any non-news stories, something which to an extent goes hand in hand with our limitation on opinion and advocacy posts as described above.

Satire. The reasoning behind the filtering of these domains is pretty self-evident.

Unreliable source. Basically any source which has proven to be highly unreliable or misleading. Included are a few conspiracy domains, as well as any other unreliable outlet – like self-reporting services or personal blogs.

Rebloggers. Basically any domain which engages heavily/solely in the copying and pasting of other journalists’ work in an attempt to pass it off as their own.

Spam. Almost entirely consisting of domains which are submitted by the spammers which you’ll sometimes see plaguing the ‘new’ queue at night in the United States, with titles like “bus service Delhi” or “best SEO marketing”.

Basically, if you fall into the categories above, you can get banned from r/news. The reason that people are all up in arms about this is that Glenn’s breaking story is undoubtably news. Yet, due to the fact Greenwald is an outspoken critic against NSA abuses, the Reddit moderators of r/news deemed it not to be news.

These moderators appear to be taking the bullshit statist line that if you have an opinion you are an “activist” and not a “journalist.” Obviously this is nonsense, as you can clearly be both an activist and a journalist. These are not, and never have been, mutually exclusive. Furthermore, what about the fact that so many of the so-called “experts” being called on mainstream T.V. news to give their opinions are actually on the payroll of major corporations and these conflicts of interest are never clearly disclosed to the audience. Is that legitimate news?

With all that in mind, let’s turn to the Daily Dot’s excellent coverage of the story. They explain that:

Mt. Gox’s imminent demise has particularly gripped Reddit communities like r/Bitcoin and r/news following rumors of a $300 million hack that crippled the Japan-based business. Redditors from r/news have also obsessed over Greenwald’s latest Edward Snowden leak—only his story has been banned from the default subreddit.

All links to Greenwald’s piece on the Intercept, a publication founded by First Look Media and home to Snowden’s leaked materials, titled “How Covert Agents Infiltrate the Internet to Manipulate, Deceive, and Destroy Reputations,” has been removed more than six different times from r/news and at least once from r/worldnews. 

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What’s Not Being Said About Bitcoin by Coinbase Founder Brian Armstrong

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Before I get to today’s excellent article by one of the co-founders of “next-gen” Bitcoin company Coinbase, I want to add a few of my own updated thoughts on the Mt. Gox fiasco.

While I am not at all surprised by the end of Mt. Gox (I predicted it in my piece several weeks ago), it happened much faster and in a much more spectacular fashion than I imagined. So the question here is: What comes next? Well that’s a two part question in most people’s minds, there’s the price action and the future of the protocol itself in the long-term. Let’s start with the first point.

For a while now, I thought the price pattern in Bitcoin might resemble what we saw following the last 10x run up and crash. In that case, we saw a six month consolidation from last spring to the Silk Road shutdown, after which the price exploded 10x again. If such a pattern was to reoccur, we’d be looking at the next move in Bitcoin around June. So we are still very much in a price consolation phase with wild moves within a wide trading range. I continue to work under that assumption.

What concerns me about the “missing” 750,000 bitcoins from Mt. Gox is that we don’t know who has them now. What if it is the feds, or some banking interest? The feds already own a lot of Silk Road coins, so let’s hope this is not the case. That would be the worst case scenario for the price in the near-term. Still, even if they do have these coins, they can only dump them on the market once. It’s also worth considering that the market has already priced this in. After all, the Mt. Gox Bitcoin price was already trading at a massive, bankrupting predicting discount for weeks before the actually filing.

As far as the future of Bitcoin, the protocol itself as well as peer-to-peer, decentralized crypto-currencies in general, I have no doubt the future is extremely bright. It’s the financial equivalent of the invention of the internal combustion engine.

However, this point is much more eloquently made by Mr. Armstrong of Coinbase. So here are some excerpts from his recent article: What’s Not Being Said About Bitcoin.

Over the past few weeks, we’ve seen a string of issues in the Bitcoin space, from the transaction malleability bug that ultimately closed Mt.Gox’s doors to a corresponding distributed denial of service (DDoS) attack that delayed transfers on multiple exchanges and services. These attacks, along with recent phishing scams and money-laundering arrests, have cast doubt on the Bitcoin space and caused consumer panic — which is fair.

But what hasn’t been communicated well is how those who are truly invested in the future of Bitcoin remain totally confident, because with every attack, breach, and arrest, Bitcoin is getting stronger and proving to consumers and businesses it is not going away.

Here is what is not being said about Bitcoin that should be.

Open networks keep growing even if individual participants fail.

It is critical to understand just how different an open payment network is from the proprietary payment networks that exist today. To illustrate this differently, let’s look at another open protocol: email.

Email is a good example of an open network with a standardized protocol; and this standardization is one reason why email is fast, free, and works just about anywhere in the world. There is no single company or country who controls the email protocol (just like Bitcoin), so thousands of different clients and implementations have been created all over the world giving it great reach and driving down prices for consumers who have many email options to choose from. You may have noticed you can successfully send emails between different service providers (such as Gmail to Outlook). This is also due to the open nature of the protocol.

If an individual email provider has a security breach, or loses the integrity of its customers, this doesn’t reflect on the concept of email generally — it merely reflects on the integrity of the individual provider. Further, the beauty of open networks is that they provide a low barrier to entry for competing services to come in and vie for your business as a consumer. Bad actors are quickly weeded out of open networks because consumers have choice — the choice of many new entrants coming on the market to vie for their business. Open networks do a great job of keeping incumbent companies honest, because if they make a mistake and lose their customers’ trust, their customers will be gone in a flash.

Unlike Bitcoin or email, our financial institutions and payment systems today are proprietary. This limits the ability for consumers to easily switch between payment providers and creates less competition for services. If the provider of a proprietary payment network isn’t serving its customers’ needs, where else will their customers turn? There is only one company you can use to access a proprietary payment network — the company that owns it. This higher switching cost has a few side effects: less competition in the market, higher fees, limited geographic reach of any individual network, and less innovation around things like speed of transactions.

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How Facebook Exploits Underage Girls in its Quest for Ad Revenue

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Sophie Bean, 14, of Sequim, Wash., said she was thought she was “liking” a Facebook ad related to fashion modeling. Instead, it promoted a Facebook page that recruited adult webcam models.

“I just thought it was for modeling, and I’m interested in that, and I thought it would help me out,” Sophie said.

Sophie wasn’t the only teen connecting with the page, which Facebook statistics show is most popular with users 13 to 17. Clicking on it didn’t pull the teens into nude webcam modeling, but did mean they would receive the page’s updates and could be mentioned in future versions of the ad.

– From the Wall Street Journal’s recent article: Nude Webcams and Diet Drugs: the Facebook Ads Teens Aren’t Supposed to See

This post is my third in recent weeks exploring what exactly is going on with the Facebook business model. The company reported stellar results in its latest earnings report, which has led to many questions as to exactly how they are making all this advertising money. Well the pieces are finally starting to come together, and the answer is not pretty.

For some context, I suggest you first read the previous articles I posted:

How Much of Facebook’s Ad Revenue is From Click Fraud?

This Man’s $600,000 Facebook Disaster is a Warning For All Small Businesses

With all that in mind, let’s move on to the third piece of the puzzle. The routine exploitation of the weakness and most gullible members of society, teenage girls.

The crazy thing here is not that some random selection of underage girls are being led to click on ads that direct them to adult video cam sites and dangerous dietary supplements, but that they represent the primary demographic clicking on these ads.

This story from the Wall Street Journal is sure to make your blood boil no matter who you are, but particularly if you are a parent with young children.

From the WSJ:

“Who do you like?” asked recent ads on Facebook, featuring young women in alluring poses.

Some of the ads were configured to reach young teens, who were invited to join an app called Ilikeq that let others rate their attractiveness, comment on their photos and say if they would like to date them.

That’s how 14-year-old Erica Lowder’s picture ended up on display to adult men online. Users of Ilikeq, one of Facebook’s fastest-growing “lifestyle” apps, were able to click through to the Indianapolis girl’s Facebook page. 

The case offers a glimpse into how young Facebook users are sometimes exposed to ads inappropriate for them. A 14-year-old girl in Washington state said she “liked” an ad that led to the Facebook page of a nude webcam-modeling site.
Facebook said it approved the ads for young teens because it hadn’t categorized Ilikeq as a dating site. It said it has now done so and has disabled Ilikeq ads for those below its minimum age for dating-site ads, 18. 

Advertisers on Facebook can set their ads to reach all users or narrow the focus. Facebook’s website says it can help advertisers target consumers based on an array of user information it collects, such as age, gender, relationship status, politics and type of phone owned.

“We take the quality of ads on Facebook very seriously,” Facebook said in a statement. 

Really? You could’ve fooled me.

Facebook used to limit ads to users 18 and older by default. An advertiser who wanted to reach younger people had to change the setting.

In 2011, it eliminated this restriction for some advertisers, so their ads could be shown to all unless specified. That change was extended to all advertisers in 2012, around the time of Facebook’s initial public offering.

Just a coincidence I’m sure…

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Yes the Government is Spying on You Through Your Webcam – Another “Conspiracy Theory” Proven True

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I still remember many years ago in response to becoming aware of the possibility that my computer webcam could be accessed remotely I decided to put a piece of duct tape over the camera. I also remember the look on some of my friends’ faces upon seeing this. They thought I was nuts. It wasn’t even a conversation I was comfortable having since the idea that the government or NSA could or would peep on innocent Americans through their webcams was beyond preposterous for the vast majority of people

This topic is not exactly new, and I addressed it last April in my piece: A Look into the Malware the FBI Uses to Spy Through Webcams.

Now, thanks to Edward Snowden, we know more. Much, much more.

From the Guardian:

Britain’s surveillance agency GCHQ, with aid from the US National Security Agency, intercepted and stored the webcam images of millions of internet users not suspected of wrongdoing, secret documents reveal.

GCHQ files dating between 2008 and 2010 explicitly state that a surveillance program codenamed Optic Nerve collected still images of Yahoo webcam chats in bulk and saved them to agency databases, regardless of whether individual users were an intelligence target or not.

In one six-month period in 2008 alone, the agency collected webcam imagery – including substantial quantities of sexually explicit communications – from more than 1.8 million Yahoo user accounts globally.

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