Update: The United States Central Command's (CENTCOM) Twitter and YouTube accounts, attributed to pro-Islamic State (IS) hacking group "CyberCaliphate," has been celebrated as a massive achievement among IS fighters and supporters on Twitter.
Another day, another escalation in the conflict between supporters of the Islamic State and western powers, in this case the Twitter account of the US Central Command (@Centcom), which appears to have been hacked, and where compromising tweets revealing details about military members and potential conflict scenarios involving China and North Korea, are being sent out in real time.
- French policewoman killed in shoot-out, hunt deepens for militant killers (Reuters)
- The Bold Charlie Hebdo Covers the Satirical Magazine Was Not Afraid to Run (BBG)
- Evans Says Fed Shouldn’t Rush Rate Rise as Inflation Undershoots (BBG)
- Oil holds above $51 as traders search for floor (Reuters)
- Gross Helps Fuel New Fund With His Own Cash (WSJ)
- ECB warns Greek funding access hinges on keeping bailout (Reuters)
- Greece Jolts QE Juggernaut as ECB Gauges Deflation Risk (BBG)
- Analysts Say There's No Telling How Low Oil Prices Could Go (BBG)
- Scientists find antibiotic that kills bugs without resistance (Reuters)
Will truth be stranger than fiction...
It’s high time for a new model and for new people. But the old ones, and their utterly and dramatically failed economies, hold the power, the media, the money, everything. So what other way out is there but mass fighting, mass casualties, a complete overthrow of everything that exists today, probably nuclear bombs dropping, and in the end a world none of us would recognize, let alone be able to survive in? It’ll take a while yet to get there, and it won’t be a pretty while by any stretch of the imagination. The powers that be are not done yet pretending to rule the universe and playing God. We should kick ‘em all out today, but we won’t. Because we’re all too much like them.
With Western economic sanctions against Russia, Iran, and Cuba in the news, Ken Rogoff thought it was a good time to take stock of the debate on just how well such measures work. The short answer is that economic sanctions usually have only modest effects at best. In a world where nuclear proliferation has rendered global conventional war unthinkable, economic sanctions and sabotage are likely to play a large role in twenty-first-century geopolitics. Rather than preventing conflict, Pericles’s sanctions in ancient Greece ultimately helped to trigger the Peloponnesian War. One can only hope that in this century, wiser heads will prevail, and that economic sanctions lead to bargaining, not violence.
Obama + Vacation = ...
US foreign policy just jumped the shark: a few days after both the FBI and the US State department were humiliated when it was revealed that it wasn't North Korea but a disgruntled, laid off Sony employee that was responsible for the "hack", and when the best possible course of action would have been to simply let this latest embarrassing incident fade from memory, moments ago Obama - currently not working out next to a rainbow or flashing his support of "Shaka" - just signed his first executive order of 2015, imposing even more sanctions against North Korea.
It appears that when North Korea's Kim Jong-un isn't personally hacking Sony Pictures' 40-some firewalls, he is busy flying planes.
2014 is in the bag and there's something for everyone to celebrate. Here are the narratives that painted the past year - what’s real about them versus what we’re being told they are about.
- Behind the Scenes at Sony as Hacking Crisis Unfolded (WSJ)
- Oil Set for Biggest Slump Since 2008 as OPEC Battles U.S. Shale (BBG)
- Praet Warning of Oil Effects Signals Higher Chance of ECB QE (BBG)
- U.S. Opening Door to More Oil Exports Seen Foiling OPEC Strategy (BBG)
- Venezuela confirms recession, inflation hits 63.6 percent in Nov (Reuters)
- U.S. to station 150 armored vehicles in Europe (Reuters)
- China Stocks Rise to Finish Off Big Year (WSJ)
- RBS Suspends Bonuses of 18 Traders Amid FX Rigging Fine (BBG)
I Hate North Korea’s Leaders ... But They Didn't Do It
First it was, with "absolute certainly", North Korea. Then, out of the blue, an even more ridiculous theory emerged about the origin of the Sony hackers: Russia. Now, we finally get the truth, and as it turns out it was neither of the abovementioned sovereign actors who had nothing better to do than to hack movie scripts and racist emails: it was Sony's own disgruntled worker who was the source of the hack. According to Politico, FBI agents investigating the Sony Pictures hack were briefed Monday by a security firm that says its research points to laid-off Sony staff, not North Korea, as the perpetrator."
What scares me about the Clash of Civilizations is that the three leaders of the three biggest civilizations – the US (Western), China (Sinic), and Russia (Orthodox) – will misplay their hands and take on another civilization directly or, worse, take on each other, and that will vaporize the Narrative of Central Bank Omnipotence in a nanosecond. The existential risk here for markets is not that China/Russia/Europe/America might “collapse”, whatever that means. No, the existential risk is that the great civilizations of the world will be “hollowed out” internally, so that the process of managing the ten thousand year old competition between civilizations devolves into an unstable game of pandering to domestic crowds rather than a stable equilibrium of balance of power.
Remember when evil North Korean hackers were blamed by everyone in the administration for penetrating the firewall of one of the wealthiest, most sophisticated, most secretive multi-national corporations in what now everyone realizes was an epic publicity, not to mention, punking stunt? Well, now that Kim Jong-Un has served his purpose, and the Interview has generated far more revenue than it would have otherwise (but not before North Korea got to troll the US, showing it too has lost all respect for the leader of the free world after it called Obama "A monkey in a tropical jungle") it is time to milk The Interview for some more propaganda talking points. And sure enough, here comes the Seattle-based cyber security firm Taia Global, which according to the NY Daily News as cited by the Mail has analyzed the "data" and concluded that not so Lil' Kim was right (the FBI was wrong) and it wasn't North Korea after all. So who was it? Why the evil Russians of course.