SPY

Yesterday, infamous whistleblower Edward Snowden, stuck nearly two weeks in the transit zone of Moscow's Sheremetyevo airport, finally got some good news: first Nicaragua, then Venezuela (and moments ago Bolivia) broke the rejection letter trend, and in bombastic and very political fashion, offered him asylum (although as with everything in politics nothing is concluded until he is actually on some Latin American beach). However, a question remains: just where is Snowden right now? After all, following his initial public appearance and video with the Guardian and WaPo, there have been virtually no public sightings of him, despite his current location in one of the most public venues in the world: the Moscow airport.

In a democracy rule is by consent. In a dictatorship it is by control. Which do we have in the West? It seems to me, it is no longer clear. We certainly still have the rituals of rule by consent. But behind the elected front men and women is a shadow state. It’s people ritually swear allegiance to those we elect. They declare themselves there to serve and protect. But when it is us they spend their time spying on, whose interests are they protecting? Can you really serve those you do not trust?

Amid all the barbecues and fireworks today in the Land of the Free, it may be worth a short pause to remember the words of Thomas Jefferson some 237-years ago:  

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."

"That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,"

"That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."

By Jefferson’s own standard, it seems rather clear that the government – most governments – have become destructive against their higher purpose: to safeguard the people’s liberty.

Today shouldn’t be a celebration... it should be a memorial service. Or at least a time to reflect heavily – when will enough finally be enough? When will it be time to act?

A world that deserves what's coming to it.

In the Oval Office on May 16, 1973, Mr. Buzhardt told Nixon about his discussions with the deputy director of the National Security Agency, Louis W. Tordella, about the Huston plan. The N.S.A. conducts international electronic eavesdropping, but like the C.I.A., it is not supposed to spy on Americans at home.

''Anything the N.S.A. did is totally defensible,'' Nixon said, referring to the Huston plan.

Mr. Buzhardt replied: ''They move into a broader category with respect to domestic affairs'' -- an illegal realm.

''What do you mean?'' Nixon asked. ''Electronic surveillance?''

Mr. Buzhardt replied, ''Yes, sir, targeting U.S. citizens' conversations.''

Update: Italy and Spain have also been confirmed as a state that refused passage above its airspace to Bolivia's Morales.

Moments ago a rather surreal episode of international diplomacy, or rather lack thereof, took place when the airplane of Bolivian President Evo Morales was forced to land in Austria over suspicions that NSA whistleblower Edward Snowden was on board, a claim Bolivian authorities denied. The reason: France and Portugal reportedly refused to allow the flight to cross their airspace due to concerns that Snowden may have been aboard the plane. It is what international law allows countries to deny their airspace to presidents of sovereign countries, when the only transgression is unproven speculation of harboring a whistleblower. Of course, with both insolvent countries bent over and in dire need of some all too precious Uncle Sam liquidity, we can see how they would do anything and everything to gain some favor with Obama.

In this manner, all citizens anywhere could be under surveillance by any government, including their own, beyond any kind of effective control and oversight.

Snowden's in the basement, Surfing on the Internet,
I'm on the pavement, Thinking about the gubmint

How Much Are Intelligence Analysts Front Running Markets?

A priest, a banker and a spook… not the start of a joke or a John LeCarre spy novel, but merely the latest addition to a long list of financial scandals involving the Vatican Bank. Yet despite its quasi comedian if convoluted plotline, the latest attempt to defraud the Catholic church will likely pale in comparison to the most infamous incident involving the Institute of Religious Works (or IOR) as the Vatican Bank is also known. That one involves one Roberto Calvi, the chairman of Banco Ambrosiano, who in 1982 was found hanging from London’s Blackfriars bridge, a short distance away from JPMorgan’s gold vault, his pockets stuffed will cash and bricks in what at the time was a presumed hit by the mafia taking revenge for funds lost through the collapse of Calvi’s bank – a bank in which the Vatican was a significant shareholder. This time, however, with plenty of living loose ends, we may finally get a glimpse into how deep the rabbit hole involving the legal, and more importantly illegal, (ab)use of Catholic funds really goes.

Goebbels noted, "it thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State." But Goebbels has been superceded. Repression is so last century. Why repress when you can simply drown it out. All it takes is for the media outlets to be owned by a few powerful and like-minded friends. A few media moguls and corporate giants, whose plastic pundits raise their voices while the dolly bird presenters flash their thighs. It’s all so full throttle and frantic, and charged with desire and greed. Anyone who disagrees is a conspiracy theorist. Anyone who breaks ranks is a whistleblower and whistleblowers are domestic terrorists, dysfunctional loners with personality problems and axes to grind. When the truth is vilified, hunted, gagged and goaled, then the State has chosen to go to war with the nation.

Both the absolute levels and the implied volatility of credit markets are significantly divergent from the recovering exuberance in stocks. As we discussed here and here, this cannot last. If you 'believe' that Bernanke was bluffing and the taper is off then credit is grossly cheaper than stocks; if not, equity shorts seem an appropriate position into Q3.

Following Putin's colorful description of the no-man's-land that Edward Snowden seems to reside in, Wikileaks has confirmed this morning that "Mr. Snowden is not being 'debriefed' by the FSB. He is well." As Rianovosti notes, there has been widespread skepticism that the presence of the Snowden at a Moscow airport would not have prompted any interest from Russian intelligence officials. Snowden’s ultimate destination is unknown, but Ecuador – which has given refuge to WikiLeaks founder Julian Assange at its embassy in London – has now demanded that, as The South China Morning Post reports, the US must “submit its position” regarding Snowden to the Ecuadorian government in writing as it considers his request for asylum. Ecuador's foreign minister added, "his government could take months to decide whether to grant asylum."

And What About Your Smart Meter?

If Obama thought dealing with Putin was next to impossible when Snowden was merely hiding in the no man's land of the Sheremetyevo transit zone (see "U.S. steps up pressure on Russia as Snowden stays free") he is about to really lose his grip now that the former KGB spy appears set to "debrief" the very much current NSA whistleblower, and in the process learn as much as possible about US secret spy operations on whose receiving end, for countless years, has been none other than Putin's Russia. As Interfax reports: "Russian law enforcement authorities may detain former CIA employee Edward Snowden to establish the circumstances of his arrival in Russia, including passport details." In other words, Russia is now willing and eager to "force" Snowden to make a faux pas just so it has every reason to end up with the 30 year old in a dark, sound proof room. And just like that Obama's headaches are set to become much, much worse.