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Dinner with the FBI

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I managed to catch a quick dinner with Robert Mueller as he passed through San Francisco on some bureau business which he couldn’t disclose. Meeting him for the first time, I immediately recognized the kind of no nonsense, ex-Marine, Vietnam Vet that he was, the kind of officer who used to rip your guts out for disobeying a direct order, which in my case was frequently. President Obama thought this was the man you want for your Director of the FBI, which is why Mueller survived as one of the few holdovers from the Bush administration.

Google’s move to drop censorship in China following a serious hacker attack, and risk getting kicked out of the country, focuses a big spotlight on a dirty little secret war, the new millennium’s answer to the cold war. It’s really been going on since 1966, when a 75 cent accounting discrepancy at the University of California at Berkeley led to the smashing of a German industrial espionage ring that was looting computers through the old DARPANET.

Instead of bullets, bombs, and missiles, opponents are deploying bandwidth, Trojan horses, and stealth software downloads. Until recently, this new Cold War was known only to computer and security professionals. So far, the big loser has been the US, which had a “Library of Congress” worth of data cleaned out of mainframes at the Pentagon, the State Department, and Sandia National Labs, where weapons research is carried out. Also gone are hundreds of billions of dollars worth of trade secrets, designs, and other intellectual property owned by US corporations. The administration views the threat so seriously that it has made cyber warfare a top national security priority.

Mueller told me that the Internet is not just a conduit for commerce, but also for crime and terrorism, and the bad guys are checking your doorknobs every day. Information is power, and fiber optic cable is a weapon. Terrorists, in particular, love the new Google Earth application. Only recently, Mueller busted an American-Egyptian phishing ring, arresting 50, which cleaned out $50 million from 5,000 US accounts.

Our own government hackers have discovered a global “GhostNet” of compromised computers around the world in government departments, military facilities, and corporations that funnel terabytes of information back to the Middle Kingdom. Particularly popular are key stroke tracking programs planted on machines in sensitive areas. The source of these programs has been traced back to virtually every ministry in Beijing. But the US can’t file a formal complaint or take legal action without revealing its own resources and capabilities. So it stays under the radar, planning countermeasures to unleash if the war ever heats up from cold to hot.

Mueller argues that we must all take ownership of the cyber security problem through the vigilant use of antivirus software, firewalls, sophisticated passwords, and constant patches. Teenaged kids, like the Canadian who launched the biggest “denial of service” attack against E-Trader and E-Bay, are to be feared. Be careful what you post on your Facebook page because it may kill a job prospect years down the road.

As a former San Francisco federal prosecutor, Mueller would love to point fingers, name names, and kick butt. However his senior position in the administration prevents him from doing so without igniting a diplomatic brouhaha.

But it’s clear from his hints and indirect references that the Chinese are in the game for intelligence, and the Russians for money. Hillary can file all of the harshly written diplomatic notes she wants, but it’s hard to get offending countries to act against miscreants we consider criminals, and they worship as national heroes. China in particular has never been big on honoring intellectual property rights, and the issue of cyber security is just another facet of that shortcoming.

The FBI is now embedding agents in police departments in Eastern Europe, and even has a token representation in China to take the fight global. But Mueller admitted that even he recently fell victim to a phishing attack on his personal bank account. His wife has since banned him from online banking. As I left, Mueller offered me a piece of advice: Don’t answer any e-mails from him, especially if he is asking for money.

When I got home from dinner, I immediately backed up all my files, reset my passwords, and bought my fourth antivirus program. I also installed bars on my windows and set booby traps on the front lawn for good measure.

For more iconoclastic, out of consensus analysis, visit www.madhedgefundtrader.com, where conventional wisdom is drawn and quartered daily. You can also hear me in person weekly by listening to Hedge Fund Radio by clicking here at http://www.madhedgefundtrader.com/Hedge_Fund_Radio.html

 

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Sat, 01/16/2010 - 17:43 | 196096 heatbarrier
heatbarrier's picture

Looking forward to breakfast with the NSA.

Sat, 01/16/2010 - 12:36 | 195883 madhedgefundtrader
madhedgefundtrader's picture

I take it that you are too young to have been in the financial markets in the seventies, which why your facts are all wrong. Christopher Woods was a young kid who can ten years after me at the Economist. Kevin Parker was on the US Equity trading side and had nothing to do with the Japanese desk, where the big money was made in the late eighties. Its possible he took over after I left, but by then international was well established and accounted for more than half of Morgan Stanley's equity division profits. Soros and Tudor where global, with most of their big positions in the US or in the FX markets. Mine was the first pure international fund, which was a tough sell, because this was when the Dow was going for 2,000 to 10,000. You could meet Mueller and Panetta too. It's not that hard. You just haven't ried enough. As for Elvis, I was given a tour of Graceland once by his last girlfriend, who I dated later. I got to use the toilet he died on. Maybe you should too.

Sat, 01/16/2010 - 18:19 | 196114 Anonymous
Anonymous's picture

Sorry for the "bait", but I figured that was a way to draw you out and establish bonafides for those who read your posts. It was meant more for the audience than the writer. Underhanded, yes, but an effective ploy. I stand corrected, and convinced. Bon appetite.

Incidentally, perhaps you had already moved on, but Kevin set up the desk when Nikkei and TOPIX futures and options were introduced, circa 1987 or thereabouts, and ran the arb desk well into the 1990's. Made a bundle. Ruthless but talented trader. I think Chris Wood came in '87. He had a great handle on the Bubble and did some good work during his tenure.

Sat, 01/16/2010 - 16:47 | 196052 Ruth
Ruth's picture

No disrespect meant madhedgefundtrader, just trying to add to the flavor.  Thank you for your attempts at clarity and more disinfectant.  Please Repeat as many times as possible.  The american public needs things like this to peek their attention and Breakfast with Elvis' Girlfriend will touch one of my relative's heart strings, as they believe he's still alive!

 

Sat, 01/16/2010 - 08:23 | 195778 Anonymous
Anonymous's picture

Of course everything this fellow writes is tongue-in-cheek. His claimed background does not fit the facts. For example, the chief writer in Tokyo for The Economist in the 1980's was a Brit named Christopher Woods, tall and thin and with 1970's style overly long hair. The person who started Morgan Stanley's derivative desk in Tokyo was somewhat legendary in that he was one of the first IB'ers to be paid big bucks. His name was Kevin Parker.

As for "the first dedicated international hedge fund", which he claims to have established in 1989 or after, this ignores the reality of, among others, Soros/Rogers Quantum Fund, and Paul Tudor Jones' first fund.

I assume the rest of MHFT's claimed background and meetings are equally embellished by fantasy. His writings are no doubt intended as comic relief. Next up: Breakfast with Elvis and a discussion of Estate Planning.

Sat, 01/16/2010 - 06:11 | 195758 Ruth
Ruth's picture

I think it's fair to say that I wouldn't take this guy's word as I don't know him and I know this person even less, but when they have gag orders I listen.  Why did we lose all that intelligence.....they're really that good or we're just so bad or just too connected or infiltrated?  YOU DECIDE. 

If you haven't heard these depositions YOU SHOULD:

http://www.bradblog.com/?p=7374

Sat, 01/16/2010 - 10:20 | 195813 Anonymous
Anonymous's picture

When the 2010 elections are over and the investigations get under way. This administration is gonna make everything to date look like a church service.

Sat, 01/16/2010 - 05:10 | 195752 blueskyscottsdale
blueskyscottsdale's picture

the core problem here is nobody listens to the FBI. In 2004, the FBI warned that "mortgage fraud was becoming so rampant that the resulting "epidemic" of crimes could trigger a massive financial crisis. According to a December 2005 press release from the FBI, "mortgage fraud is one of the fastest growing white collar crimes in the United States". Who listened? Nobody. What did it cost the US tax payer? Trillions. Recently the FBI has warned of rampant fraud at all levels of the society of unprecedented proportions. That is why we are going to audit the Fed and find out what has really been going on there.

http://en.wikipedia.org/wiki/Mortgage_fraud

Fri, 01/15/2010 - 23:34 | 195643 Anonymous
Anonymous's picture

Mueller would have to be dumber than my grandmother to have his account phished...ok I believe it. They like to get guys that realy believe all the bS...buy your virus software, IP is legit, IP violators are bad...has hedgefund bootlicker ever read Stephen Kinsella? IP is a joke

Fri, 01/15/2010 - 22:56 | 195618 Anonymous
Anonymous's picture

"I finally realized that all upload directories have to be outside of the root of the site with very limited privileges."

rofl...

|/dev/null 90% of ya'll.

Fri, 01/15/2010 - 17:34 | 195330 Anonymous
Anonymous's picture

So what's wrong with a little spoof now and then.

Some idiot hangs up some Chinese made products and whacks them with a bat and puts it on youtube and that's somehow fucking hiliarious.

Some guy writes a little diddy to tickle your funnybone and you deflesh him like a school of piranhas.

You people should get out from behind your computer screens and enjoy life once in awhile.

It would also be helpful if people would learn to differentiate between satire and sarcasm.

Obviously some of the pinheads that inhabit the ZH comment blogs just aren't spophisticated enough yet for madhedgefundtrader's insane sense of humor.

Fri, 01/15/2010 - 23:39 | 195648 Anonymous
Anonymous's picture

If I want humor I'll watch Jon Stewert. madhedgefundtrader is about as funny as Robert Gibbs climbing up on his soap box and hawking snake oil for Obama.

Fri, 01/15/2010 - 16:35 | 195230 Hammer59
Hammer59's picture

"Flame on Friday". Suprised he got 2140 hits, but he is an interesting read. He enjoys employing "artistic license"-- slight stretching of the truth for entertainment value. Harmless enough.

There are some clever people on Zero Hedge.

Have a great weekend.

Fri, 01/15/2010 - 16:34 | 195229 Anonymous
Anonymous's picture

Buy and install Anti-Virus software?
Are you serious?
Besides being the perfect trojans for keyloggers and root kits, you will be directly funding the Chinese hackers through the Symantec backdoor.

Fri, 01/15/2010 - 16:06 | 195182 Jestocost
Jestocost's picture

This is absolute bullshit. 

After "Lunch with the CIA"  you presume to subject us to "Dinner with the FBI"

Is there anything in this post that is supposed to be information that's new, correct or even relevant?

You can get more topical information from YouTube, the CIA Office of Information and, God forgive me, the DHS website.

Please, make your next istallment  "My Morning Dump with the DIA and the Subterreanean Secrects of the Brown Finless Fish"

What a Pillock

Fri, 01/15/2010 - 15:56 | 195175 Anonymous
Anonymous's picture

I had breakfast with God this morning and she told me to build an ark.

Fri, 01/15/2010 - 15:38 | 195159 Anonymous
Anonymous's picture

I knew Bobby Mueller when he was 17. We played on the same high school hockey team before he went to Princeton. Hell of a great player.

Fri, 01/15/2010 - 15:23 | 195137 Anonymous
Anonymous's picture

You commenters are goofy!

What don't you all understand about the "mad" part of madhedgefundtrader?

These missives are very entertaining educational mind-warping pieces. Thought nudging through fiction...

Thankyou mr. mad:)

Fri, 01/15/2010 - 15:04 | 195119 Anonymous
Anonymous's picture

CONGRATS! Your writings in the political/financial fictional genre are improving. I liked your installments of "Lunch with CIA" and "Dinner with FBI," so am sure to LOVE your upcoming "Midnight Buffet with Secret Service" and "Continental Breakfast with Interpol" Oh yeah, and I'm learning some super secret stuff that noone knows (except that select elite who have a computer and internet access)

Fri, 01/15/2010 - 14:52 | 195104 Anonymous
Anonymous's picture

surprised barry0 gets cred for holding mueller over. i thought it was a 10yr appointment, intended to remove politics from the equation.
maybe you could check when you have breakfast with michelle...

Fri, 01/15/2010 - 14:45 | 195091 Anonymous
Anonymous's picture

...the website further contains an offer to manage your greenbacks!...lol!

Fri, 01/15/2010 - 14:43 | 195087 Anonymous
Anonymous's picture

go to this guy's website; it's hilarious! what a career...careening around the world as a writer w/ the economist, being invited to start derivatives departments in major banks, appointed direct at credit suisse...of course writing for the economist and the ft would qualify one to be a money center bank director...but this is the best..."In 1982 the Mad Hedge Fund Trader moved to New York as the US editor of Euromoney magazine. As a member of the White House Press Corps he covered the early years of the Reagan administration"....

Euromoney is not part of the White House Press Corp...and the White House Press Corp must reside in D.C. or environs...not New York but I;m sure this guy is so tight w/ the Secret Service they just gave him a pass on residency requirements for a White House Hard Pass.

It get's better..."In 1989 the Mad Hedge Fund Trader was appointed a director of the Swiss Bank Corp responsible for its then vast portfolio of Japanese equity derivatives. A year later he left to set up the first ever dedicated international hedge fund, which became a top performer in the industry.
The Mad Hedge Fund Trader has always devoted his life to understanding global capital markets not because of money he could make there, but because of the limitless intellectual challenge it offered.
In his free time, the Mad Hedge Fund Trader climbs mountains, does long distance backpacks, practices karate, performs aerobatics in vintage aircraft, collects vintages wines, reads the Japanese classics, and engages in a wide variety of public service and philanthropic activities. Why they call him "mad" he will never understand.

this used to be called a crock of ----!, now it passes for the truth

Fri, 01/15/2010 - 23:47 | 195657 Anonymous
Anonymous's picture

"the most interesting man in the world"

Fri, 01/15/2010 - 15:41 | 195164 nobita
nobita's picture

when you put it like that...

fuck im gullible :)

Fri, 01/15/2010 - 15:38 | 195160 Strom
Strom's picture

Parody of an international financier. It has to be...

Fri, 01/15/2010 - 13:41 | 195008 Strom
Strom's picture

I'm telling you guys - this stuff is some sort of parody. Just look at the last line:

"I also installed bars on my windows and set booby traps on the front lawn for good measure."

 

Fri, 01/15/2010 - 14:28 | 195062 Cpl Hicks
Cpl Hicks's picture

Maybe this whole website is just a spoof, a fraud- to lure the last of the free-thinking Americans into cyber-slavery.

Think about it- all these 'Anonymous' posts, they got to be just random word generated filler.

Fri, 01/15/2010 - 15:06 | 195121 Fish Gone Bad
Fish Gone Bad's picture

An open mind is like an empty lot.  Given the chance, people will fill it up with as much trash and garbage as they can get away with. 

 

Fri, 01/15/2010 - 18:18 | 195380 Cognitive Dissonance
Cognitive Dissonance's picture

I love your view. Having lived in the inner city for a few years during the 80's I can say you are 100% correct. It always amazed me how a newly cleared lot (usually a building was demolished) was quickly filled with trash, broken furniture and everything you could and couldn't imagine.

I have a firewall on my open mind but I get your point.

Fri, 01/15/2010 - 13:53 | 195019 Cognitive Dissonance
Cognitive Dissonance's picture

I've come to the same conclusion. We are being played. Like I said in my comment above (Yes, I'm showing my ego by quoting myself)

"Lunch with the CIA, dinner with the FBI. While I won't argue with suspending disbelief when going to the movies, reading this author requires engaging disbelief. Even if the meetings did take place, I trust nothing that comes from this government and anyone who speaks for this government."

The absurdity displayed by this author defies the imagination. Either this is a unique disinformation campaign or a farce to see how far he can go and the type of reactions he can get from those ZH buffoons.

Fri, 01/15/2010 - 16:27 | 195217 Miss Piggy
Miss Piggy's picture

Agreed.  This guy is a narcisist....

Fri, 01/15/2010 - 14:54 | 195107 nobita
nobita's picture

CD love your posts here, but i think your kneejerk scepticism is leading you astray here. i follow the guys webpage daily and follow some of his investment advice. think he is the real deal.

i also believe he had dinner with these people. two reasons.

1. he doesn´t say anything you didn´t already know, no inside info from these dinners.

2. as a hedgie he probably fundraised alot and thus have very powerful friends. if you raise enough money for the democrats even bill clinton or other bigshots will take your call and do you favours.

Fri, 01/15/2010 - 15:09 | 195124 Cognitive Dissonance
Cognitive Dissonance's picture

You could very well be correct. I've been wrong before and I promise you I'll be wrong again. But something stinks here. There are too many red flags, too many outliers, too many things that stick out like red thumbs. Personally I've found that as we drift through the day, we're on auto pilot and if the overall view fits our world view, we quickly discard non conforming information as an aberrant item or stray data.

I've been reading this guy's web site since he starting post here on ZH. And I agree that it seems up and up. So why post this kind of stuff? And why say stupid things like adding a 4th virus software program to his computers when after adding the second, his computer would start having serious problems because one virus program would be fighting with the other.

Or the quip about bars on the windows and alarm systems. When something is said that is this far out, I would be intellectually dishonest if I didn't ask myself why he would even say this. His other posts don't stretch the envelope in this manner. So why now? Each time he goes off the deep end, it's about his meetings with government officials or other "inside" information.

I'm really not cynical. I approach everything as valid until I can prove otherwise. But this guy is too far off base on select articles and I must ask myself why. When the batter is always getting hit by a particular pitcher and no one else, at what point should the batter start asking questions?

Fri, 01/15/2010 - 15:32 | 195148 nobita
nobita's picture

you make good points CD. the four antivirus programs sentence is retarded^2. 

you might have changed my mind :)

i have realized one thing. people put in a lot of work for internet cred. seriously they do to an illogical degree. 

this guy wants us to think of him as a bigshot, which he might well be, but he does seem to have some kind om komplex with all the namedropping.

namedropping/bragging might be more acceptable in american culture than my own thou.

still value the guys investment advice.

Fri, 01/15/2010 - 16:24 | 195206 Cognitive Dissonance
Cognitive Dissonance's picture

"still value the guys investment advice."

Take what you need and leave the rest. One of my biggest personal mistakes ever was dismissing something completely because I disagreed with it's basic premise. That can be a fatal mistake. We have a tendency to be all or nothing. If I find out someone has lied to me, I have the tendency to dismiss everything else that person tells me.

What I've learned to do is to measure everything on it's own merit. The quality of the messenger certainly weights into the calculation but it shouldn't be the only qualification. For example, I take Bill Gross with a large grain of salt. But Gross is still a brilliant manager and to dismiss him because I don't agree with some of what he says would indicate my foolishness and stupidity. Making these decisions is difficult when we are uncertain about the subject or ourselves. This is why personal growth is so important to me. I need to understand my blind spots in order to help me see others.

Sat, 01/16/2010 - 09:58 | 195807 Ned Zeppelin
Ned Zeppelin's picture

Well, ZH allows him to post. I assume if he is a complete jokester Tyler and Marla would not let him post.  I think MHFT was kidding about the bars and 4th antivirus program to make the point that beyond a few steps you really can't protect yourself.  He seems a bit full of himself, but hey, that's what makes him worth reading. It is tempting to dislike him for his apparent success (the post about his super-expensive home was a bit over the top) but I am keeping an open mind.

Fri, 01/15/2010 - 13:26 | 194991 Anonymous
Anonymous's picture

Use Macintosh.

Sat, 01/16/2010 - 09:46 | 195804 MarketTruth
MarketTruth's picture

Macs are just as easy to attack, perhaps easier actually... just that few hackers bother due to do so.

Fri, 01/15/2010 - 14:49 | 195097 Missing_Link
Missing_Link's picture

That won't really help.  Macs aren't as bad as the PC but aren't a silver bullet by a long shot.

Fri, 01/15/2010 - 12:57 | 194948 Reductio ad Absurdum
Reductio ad Absurdum's picture

...been going on since 1966, ...looting computers through the old DARPANET.

There is no "DARPANET" formally; the term is "ARPANET." The first message was sent over ARPANET in late October of 1969. So there was no industrial espionage/looting occurring via the internet in 1966.

Fri, 01/15/2010 - 13:55 | 195021 rangerider
rangerider's picture

arpanet or darpanet explanined here

 

http://www.inetdaemon.com/tutorials/internet/history.shtml

Fri, 01/15/2010 - 13:42 | 195011 Anonymous
Anonymous's picture

Skadoosh! You got him there. From one rich, conservative white guy to another. Take it all with a BIG grain of salt.

I think it is also rich to complain that the Chinese are stealing our lunch money (computationally speaking). The US has lead the world in espionage since WWII, and with great hubris considers monitoring/stealing from others part of its privilege as global hegemon.

Skip the slippery slope arguments for fascist controls, Mueller. Like that nasty fossil Jay Rockefeller, who thinks the Internet is the greatest curse on this planet and would like nothing better than to be able to shut it down at a moment's notice. All of these jerks need to experience 2+ years of unemployment at the very least.

Fri, 01/15/2010 - 12:42 | 194932 Anonymous
Anonymous's picture

having dinner with a enemy of the american people huh? isn't that special. hope you enjoyed it.

Fri, 01/15/2010 - 12:41 | 194930 Cognitive Dissonance
Cognitive Dissonance's picture

OK, I'll say it.

Lunch with the CIA, dinner with the FBI. While I won't argue with suspending disbelief when going to the movies, reading this author requires engaging disbelief. Even if the meetings did take place, I trust nothing that comes from this government and anyone who speaks for this government.

 

Fri, 01/15/2010 - 12:31 | 194920 Anonymous
Anonymous's picture

I have send your article to the FBI. Mybe I do it also with your CIA.....

Fri, 01/15/2010 - 14:15 | 195049 Cpl Hicks
Cpl Hicks's picture

Da, tovarish....it is finished, received.

Fri, 01/15/2010 - 12:23 | 194913 Anonymous
Anonymous's picture

I would be cautious about any information that the FBI shares with the public regarding cyber-security because it will be highly politicized, especially if it is coming from someone like Robert Mueller. Our government has made it very clear that it would like to control access to information--they know that information is power. What better way to gain more control than to create the perception of a dangerous existential threat in the minds of the public so that there is then a mandate for further clamping down on how we all interact online? It's not worth it. We can suck it up and keep our free society and free exchange of ideas.

Frankly, if the Chinese are data mining the US the way the above article suggests, and we are doing the same thing to them, and life still goes on, then what, exactly is the big problem? If the DoD cannot secure its own computers from outside attack (something I don't believe for even one second) then what chance does industry or any other entity stand? No, the threat here is that the "speical pigs" won't have anywhere to hide their dirty dealings from the rest of us, and that's what they're most afraid of.

Fri, 01/15/2010 - 17:23 | 195312 Dburn
Dburn's picture

You must not have to worry too much about security. Whenever I see a site hijacked on one of my servers it's usually a Russian. Hackers upload disguised mime types in many of these social networking sites, you can bet they will be downloading all of the account information on the sites and using whatever is there to connect to other data to identify bank accounts and credit cards where they only had partial information. They are smart about it . They hit the cards for $27.68 which goes virtually unnoticed. They can literally put 50,000 card on a reoccurring billing schedule once a month. That's some serious dough. They also would claim "We work very Hard here"

I had one Russian  hacker that was absolutely obsessed with one of my servers . I put up every security device that was in my possession and knowledge and then finally decided to shut registration down . He was using registration to upload a avatar which was really a hack that broke into the site . I finally realized that all upload directories have to be outside of the root of the site  with very limited privileges.

What they hell, these CMS based sites are free and open. Which means these guys know them line by line.

 

If anyone thinks Windows is more vulnerable think again. These are very sophisticated hackers who can walk into a linux/unix based machine as easily as they can a windows machine. It really doesn't matter if the conversation happened as described. What was up there was the truth. They have top people working on hacking our systems and then there is the private sector in each country,. If it's bad , it usually comes from Russia or China without any love.

 

Social Networking sites like  Facebook are prime targets but sites  like this that run on Drupal or Joomla CMS' are similar and are every bit a target. This one has pretty good security. But I wouldn't allow anyone to upload avatars or at the least don't accept the default install on the directory . Make sure the directory is outside the root of the web site. That means either finding an extension or a programmer than can change the code to pull from that directory. 

>

As one person described it, "we had to take the servers apart and reformat all the drives after one attack. They even got into the bios on the motherboards" . They also are attacking Databases with SQL injections . Sites like these run on MYSQL. Another Open Source database package which is pretty decent but it is Open source.

 

Security is a huge problem. It's not as visible yet as it will be, but some of the best security experts have had to eat some serious humble pie when faced with these guys. It's no shame to get attacked. They can get into any computer anywhere that is connected. The guy from IBM was right. A piece of paper is more secure.

 

Think of the ramifications of that for the financial sector. I wouldn't be surprised if they already know how to take it down.

 

Fri, 01/15/2010 - 12:54 | 194946 Gordon Freeman
Gordon Freeman's picture

I like the way you think...

Fri, 01/15/2010 - 14:13 | 195044 Cpl Hicks
Cpl Hicks's picture

Me too.

Do NOT follow this link or you will be banned from the site!