FBI

It is perhaps too early to judge the impact of Edward Snowden's confirmation of conspiracy fact, but in Pentagon Papers' Daniel Ellsberg opinion in today's Guardian, there has not been a more important leak in American history. The "executive coup" against the US constitution that has, at first sercretly but increasingly openly, been under way since 9/11 could finally be stalled by the Whistleblower's efforts. Ellsberg notes Senator Frank Church's 1975 comments on the NSA warning of the dangerous prospect that America's intelligence gathering capability "at any time could be turned around on the American people and no American would have any privacy left," noting 'that has now happened'. That is what Snowden has exposed, with official, secret documents. The NSA, FBI and CIA have, with the new digital technology, surveillance powers over our own citizens that the Stasi – the secret police in the former "democratic republic" of East Germany – could scarcely have dreamed of.

Top NSA Official: Government Tapping CONTENT, Not Just Metadata … Using Bogus “Secret Interpretation” of Patriot Act

The disclosures involving this (and the prior) administration's Big Brother surveillance state, which would make Nixon blush with envy are now coming fast and furious (one wonders - why now: even that bastion of liberalism the NY Times, has turned against Obama). Although while the Guardian's overnight news that Verizon (and most certainly AT&T as well among others) was cooperating with the NSA on spying on US citizens, so far at least the internet seemed, if only to the great unwashed masses, immune. That is no longer the case following news from the WaPo exposing PRISM, a highly classified program, which has not been disclosed publicly before. "Its establishment in 2007 and six years of exponential growth took place beneath the surface of a roiling debate over the boundaries of surveillance and privacy." What PRISM does is to allow the NSA and the FBI to tap directly "into the central servers of nine leading U.S. Internet companies, extracting audio, video, photographs, e-mails, documents and connection logs that enable analysts to track a person’s movements and contacts over time."

Yes, Government Spooks May Be Listening

Blink and you have likely missed Obama's latest Watergate moment, this time following the disclosure that the White House has instructed the NSA to collect millions of daily phone records from Verizon (and likely all other carriers). What is surprising to us is that this is even news. We reported on just this in March of 2012 with “We Are This Far From A Turnkey Totalitarian State" - Big Brother Goes Live September 2013" and then again in April 2012 "NSA Whistleblower Speaks Live: "The Government Is Lying To You" using an NSA whistleblower as a source. Still, no matter the distribution platform, it is a welcome development for the majority of the population to know that the same Stazi tactics so loathed for decades in the fringes of the "evil empire" are now a daily occurrence under the "most transparent administration in history." This is especially true in the aftermath of the recent media scandals involving the soon to be former Attorney General.

• Global Stocks Tumble as Treasuries Rally, Yen Strengthens (BBG)
• China Export Gains Seen Halved With Fake-Data Crackdown (BBG) - so a crash in the GDP to follow?
• FBI and Microsoft take down botnet group  (FT)
• Quant hedge funds hit by bonds sell-off  (FT)
• Russia's Syria diplomacy, a game of smoke and mirrors (Reuters)
• Obama Confidantes Get Key Security Jobs (WSJ)
• BMW to Mercedes Skip Summer Breaks to Keep Plants Rolling even as European auto demand slides to a 20-year low (BBG) - thank you cheap credit
• Paris threat to block EU-US trade talks  (FT)

The IRS has a known history of scandalous behavior. With Nixon, Johnson, Hoover, Kennedy, and the FBI using the IRS to intimidate their enemies, it's no surprise that people have their eye on the IRS. Now under President Obama, they're at it again, which begs the question: bureaucratic blunder or political profiling?

Through most of the 20th century, America led something of a charmed life, at least when compared with the disasters endured by almost every other major country. We became the richest and most powerful nation on earth, partly due to our own achievements and partly due to the mistakes of others. The public interpreted these decades of American power and prosperity as validation of our system of government and national leadership, and the technological effectiveness of our domestic propaganda machinery - our own American Pravda - has heightened this effect. Author James Bovard has described our society as an “attention deficit democracy,” and the speed with which important events are forgotten once the media loses interest might surprise George Orwell.

Use It or Lose It Time for the Constitution and Bill of Rights ...

The debate over what actions actually constitute “terrorism,” we believe, will become one of the defining ideological battles of our era. Terrorism is not a word often used by common people to describe aberrant behaviors or dastardly deeds; however, it is used by governments around the world to label and marginalize political enemies. That is to say, it is the government that normally decides who is a “terrorist” and who is a mere “criminal,” the assertion being that one is clearly far worse than the other. The more naïve subsections of our society will accept unConstitutional methods against the “radicalized” out of fear and conditioning, without realizing that the machinations of bureaucracy being used against those they hate could just as easily be used against them in the future.

Why There Is So Much Pro-War Reporting

And so the final curtain falls on the myth of what was supposed to be, in its own words, the "most transparent administration" in history. As it turns out, the big Friday story of Bloomberg journalists snooping on clients was just amateur hour compared to what the AP was about to serve. In fact, the Watergate affair may soon appear like a walk in the park compared to the First Amendment shitstorm that is about to be unleashed following the just reported news that the US Department of Justice had "secretly obtained two months of telephone records of reporters and editors for The Associated Press in what the news cooperative's top executive called a "massive and unprecedented intrusion" into how news organizations gather the news." First amendment? Freedom of speech and press? Surely not when it comes to the Nobel-peace prize winning President and those who dare to expose his secret ways. And what's worst, is that the AP breach has all the makings of a spiteful hack driven by personal vengeance against one of America's premier news outlets.

• PBOC Says China Shouldn’t Be ’Blindly Optimistic’ on Inflation (BBG)
• Foreigners Buying Half of London New Homes Prop Up Building (BBG) - first they come for the foreign deposits, then for the real assets...
• Investors Rediscovering Margin Debt (WSJ) - well, yes: it is at record highs
• China issues new rules targeting wealth management fund pools (RTRS)
• Navy $37 Billion Ships Seen Unsuitable Have 2-Year Window (BBG)
• New York may have to drop claims against BofA over Merrill (RTRS)
• FBI Rejects Boston Police Stance in Spat Over Terror Data (BBG)
• In eastern Syria oil smugglers benefit from chaos (RTRS)

Terrorism Is a Real Threat … But the Threat to the U.S. from Muslim Terrorists Has Been Exaggerated

'Commingle' hundreds of millions in client funds which are subsequently stolen rehypothecated as collateral by JPMorgan while your firm goes bankrupt as a result of your idiotic prop trading decisions, and what happens? Your toughest choice is whether to vacation in Fiji or St Barths. That said, being former CEO of the world's biggest TBTF hedge fund also known as Goldman, a former governor and senator, and most importantly bundler for the president of the "transparent" administration certainly helps. On the other hand, be a lowly algo trader and quant programmer working at the aforementioned hedge fund, and having dared to "steal" secret trading client code what can "manipulate markets" and what - you get the full wrath and anger of the FBI, the Federal Court System, and now the Supreme Court.