NSA Trojan Firmware Widespread, U.S. International Tech Reputation May Suffer. Tech Privacy Has Been a Myth.Submitted by GoldCore on 02/17/2015 08:52 -0400
The global economy is thoroughly integrated and processes and knowhow are increasingly delivered on distributed architecture made up of lattices of public and private networks. This approach has wonderful benefits and can deliver scale and flexibility and speed in equal measure. But therein lies the risk, the physical spying infrastructure with engineered back doors must remain hidden in order to be effective and useful to the spies who placed them there. What the intelligence community has done has created the mother of all “single point of failures” and the potential for calamity and social disintegration is almost too great to countenance. They assume that with adequate controls these systems can be kept safe and used effectively. They said the same about nuclear procurement and weaponised viruses.
Few people understand the global economy and its (mis)management better than David Stockman -- former director of the OMB under President Reagan - and he is now loudly warning that events have entered the crack-up phase, which he predicts will be defined by four key developments. As the crack-up phase gains momentum, he predicts an increasing number of "financial breaks" that will add to the unpredictability and instability of the environment for investors. Even 'dancing close to the door' sounds excessively risky at this point.
The week just ended laid bare any pretensions that there is not something wrong (seriously wrong) within the natural world of both the macro underpinnings of business as well as finance. Unimaginable just a short 6 years ago, the U.S. equity markets closed at a height once again never before seen in human history highs, (it has more than tripled from the 2008 bottom!) but has done so solely on Keynesian fairy tales. The issue now is: does the fairytale end in a nightmare?
The stock market continues to flirt with new record highs, but the signs that we could be on the precipice of the next major financial crisis continue to mount. There are multiple warning signs that have popped up repeatedly just prior to previous financial crashes, and many of those same warning signs are now appearing once again.
Last year, the global economy was supposed to start returning to normal. Interest rates would begin rising in the United States and the United Kingdom; quantitative easing would deliver increased inflation in Japan; and restored confidence in banks would enable a credit-led recovery in the eurozone. Twelve months later, normality seems as distant as ever – and economic headwinds from China are a major cause.
With the global economy sinking, and worries about it beginning to resound beyond just inconvenient bears, Paul Krugman has been leading the critique against what he sees is a disastrous and ignorant deformation against debt. Krugman is trying to argue that because government debt did not hinder private wealth creation we should use government debt to create private wealth. The cart is not even before the horse using this “logic”, as the cart and horse aren’t even on the same road. Paper wealth isn’t wealth, and government debt isn’t “free money.” There are consequences to both which their proponents never include in the “prospectus.”
The world has begun to devolve into two distinct factions. The imperialist actions of the American Empire in the Middle East and Ukraine have pushed Russia, China, India, Brazil, and Iran closer together regarding trade deals; transacting commerce without using the USD; oil and gas pipelines; and military cooperation. Totalitarian regimes are known for using foreign threats to distract the populace from domestic suffering. As a matter of fact, all regimes use this tactic. When the global economy rips apart at the seams due to the debt saturation, world leaders will attempt to blame other countries for their dire circumstances. Foreign enemies are good for business. Ask our Nobel Peace Prize winning President. War is inevitable.
With everyone making nice - apart from Dijsselbloem - ahead of the weekend, we thought some reality checks were in order... This whole Greek debt “face-off” with the rest of Europe is so comical. First of all, as previously mentioned, there is NO way that Greece will EVER pay off all of its debt. And its ability to even service [interest payments] its debt is questionable. So, really, if you are a creditor to Greece what are you to do? You are definitely going to get “stiffed”. The question = Can you recover even some of your principal? In this case probably not a lot.
As the WSJ noted, the "world’s top finance leaders on Tuesday in effect backed currency depreciation as a tool for promoting growth by signaling strong support for aggressive easy-money policies aimed at boosting the fragile global economy." Spot the person who just realized it's not going to work.
It would appear the powers that be are getting nervous. Yesterday, Fed Governor Jerome Powell (and Fisher and Plosser) stepped up the central bank’s push against what he termed congressional efforts to extend political influence over monetary policy, calling them "misguided" and "in violent conflict with the facts." Today we have Senator Elizabeth Warren trying to sound supportive of transparency but proclaiming that she opposes Rand Paul's "Audit The Fed" Bill because it promotes "congressional meddling in the Fed’s monetary policy decisions," and has "dangerous implications for financial stability and the health of the global economy."
Are we on the verge of a major worldwide economic downturn? Well, if recent warnings from prominent bankers all over the world are to be believed, that may be precisely what we are facing in the months ahead.
The future of Europe now depends on something apparently impossible: Greece and Germany must strike a deal.
Controlling (stabilizing) today’s perception of tomorrow’s economic strength attached to (and thus backing) the USD is the Fed mandate. For if we lose control of today’s false perception well then god only knows what tomorrow’s given value may be. This is the absolute ‘mandate’ of central banking.
The recent rally in crude prices looks more like a head-fake than a sustainable turning point, suggests Citi's Ed Morse, noting that short-term market factors are more bearish, pointing to more price pressure for the next couple of months and beyond. While the shape of the oil price recovery is unlikely to be 'L'-shaped in their view (more likely 'U', 'V', or 'W'-shaped recovery), Citi warns the oil market should bottom sometime between the end of Q1 and beginning of Q2 at a significantly lower price level in the $40 range (perhaps as low as the $20 range for a while) - after which markets should start to balance, first with an end to inventory builds and later on with a period of sustained inventory draws.