My country’s leadership is brain-damaged

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The USA decided to push for NATO taking Ukraine with predictable Russian reaction. Somehow, in the USA’s media, the revolutionary coup army in Kiev is legitimate because the democratically elected president fled Ukraine. And the democratically elected secession of Crimea is illegitimate. Dude. That’s fucking insane. That’s horseshit straight out of Goebbels playbook. I’m appalled and astonished that Western media is parroting “Putin bad dictator” en masse. Sorry – I call them like I see them. Deal with it.

The USA forced Snowden to stay in Russia where we can’t touch him – unless he decides on his own to come home so he can go to prison. Our media and State Department (Kerry) spewed the immortal line, “Do the right thing.” Really. To Putin. Kerry, you fucking idiot, Putin did the right thing. For his team – no matter how you slice it.

Practical consequences for the USA.

  • Transportation to the International Space Station is compromised.
  • China and Russia have signed on to dump the dollar in oil transactions.
  • The world thinks we are idiots.
  • The world enjoys watching Uncle Sam with his pants pulled down to his ankles by Snowden.

Practical consequences for Russia

  • A few oligarchs can’t travel to the USA. Hey! Let’s push them into Putin’s arms! That will fix things! Not that doing so is a horrible idea for truth and justice. Those assholes did not come by their billions honestly.
  • Russia gets rid of any need to buy US dollars.
You what?

You what?

Martin Wolfe is batshit crazy – Strip private banks of their power to create money?

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I’m with Warren Mosler on this one. He and I don’t agree on everything, but this? Holy ham and cheese on a wig! 6f67b-ohmycartoon

I have seen how this works in nations where there is little or no tax collections and the monetary system is flooded with largesse from aid agencies. Politicians don’t need citizens anymore. If the august body on Capitol Hill is given the power to create any money that it wants on demand – that’s essentially the same thing. It’s like an invasion of UFO people handing out bags of money worth $100 billion to a few folks. What happens then? Shazam! The economy swivels like the head of an owl. 

Trust me on this – when that swivel happens – you … don’t … matter!

Beyond that, the western world, and the modern world is built on the ability of private parties to decide what is or is not worth loaning money to. This has been true for over 1,000 years.That is what took down royal dynasties. They became beholden to the bankers. Mr. Wolfe, if you think inequality is a problem now, you wait.

Last, Mr. Wolfe, do you really think that congress would do better? Really? After the Marxist experiment of the 20th Century? That was the same thing you see. Marxism was another experiment in making things perfect. 961b0-ertznay

Yep. Banking isn’t perfect. Democracy sucks. It’s better than the alternatives though.

 

 

Badgers high on acid – Mt. Gox bankruptcy

Mt. Gox declared bankruptcy.

Is this the face of a man devastated by thieves destroying his business?

Is this the face of a man devastated by thieves destroying his business?

Ho-hum. It must be wonderful right now to be Mark Karpeles. You can spout any flavor of horseshit you want, spin it around drivel a blithering idiot can see through, and … OMG! The journalists of the world will swallow it and shit it out as breakfast for your consumption.

Jeezus effing keerist! WHAT IS WRONG WITH YOU?!!!

Yeah, I know. You, the journalists of the world flunked out of math, flunked out of science, and couldn’t write software to safe your life. That’s why you went into journalism. It’s a Dilbert world.

Journalist

But tell me, journos of the world. How is it that you can dig like badgers high on acid to nitpick and trumpet discrepancies that might not even exist but when it comes to Mt. Gox you just let Karpeles take a crap in your mouth and chow down?

Yeah there’s a lawsuit. Oh.  Now back to our regularly scheduled program. Yammer-yammer-bankruptcy-hackers-hackers.

MT. Gox “hacker” shutdown is obvious lies – INSIDE JOB!

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Mt. Gox is down. Well, here we are, and isn’t it interesting that Mt. Gox has done the logical thing based on last week’s assessment.

Now, according to the alleged leaked document, it looks like hackers had been exploiting that bug for two years, and even removing bitcoins from supposedly secure “cold” wallets that the company had stored offline. Typically, cold wallets are disconnected from the internet and cannot be emptied by online attackers. However, the “cold storage has been wiped out due to a leak in the hot wallet,”

The operators of Mt. Gox (Mark Karpeles, et al) are so arrogant, so conceited and convinced of the idiocy of the public, that they actually think people will believe that.

What is more remarkable is that people like Mr. Ver seem to have swallowed the incredible lies whole. Excuse me Roger?! Either your a stupidity knows no limits or you are in on it!

And the astonishing spectacle of Robert McMillan actually penning an article that takes this horseshit seriously? “According to a leaked document,” my ass.

Here Robert, you dumbass. How to steal bitcoins in 3 easy steps.

The most lucrative attacks are carried out on online services that store the private keys for a large number of users, … It seems these attacks are often carried out by insiders who don’t have to do much hacking at all. Just copy the database of private keys and you can gain control of the bitcoins at all those addresses.

http://clatl.com/imager/get-smart-the-dumbest-generation/b/original/1274637/aefa/arts_books5-1_14.jpgDear god. Is the current generation irretrievably destroyed by Twitter, Facebook and incapacity to follow anything over one sentence long?

Could the operators of Mt Gox be playing games?

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Bitcoin2Bitcoin is melting. Not terribly surprising, considering that the fundamentals of bitcoin have been shown to be in error.

Mt. Gox cut off transfers to other exchanges. Funny thing though. Nobody else did. (Well, a couple of the other small, old-timer exchanges did, but you get the picture. And it’s ridiculously easy to fix that bug.)

So why would Mt Gox do this?

Maybe it’s all software problems. Maybe. But hey. Look at the arbitrage that has opened up. Today, (Feb 15, 2014) prices on Mt. Gox were as low as $395 while Coinbase sits at $600+.

Mt Gox banner this evening.

  • Last:$280.00
  • High:$540.006f67b-ohmycartoon
  • Low:$270.00
  • Vol:77,754 BTC
  • W.Avg:$348.87

Coinbase this evening.

Buy Price $652.08   Sell Price $651.30

$112.08 in arbitrage if you bought high on Mt. Gox and sold on Coinbase. More realistically, $303.21 in arbitrage per coin on Mt. Gox.

Mt. Gox, more thinly traded, is lower. Yeah. But 54% lower?!  Now. What does cutting off transfers outbound from Mt Gox accomplish? It traps everyone at Mt. Gox. That forces prices lower still. And …

Ta da! The guys running Mt. Gox can buy up all the bitcoins sold on Mt. Gox themselves. And then transfer them to Coinbase or Kraken, or wherever, and sell them all at a 150% or more of their costs basis.

That is a completely rational strategy to pursue if you know the ship is sinking and the game is over. Because that is not what an exchange would do if they thought bitcoin had a future. We should watch carefully where Mt Gox goes.

Big question though. Is it legal? At the very least it is unethical as hell. Since at least one court has classed bitcoins as both money and a security, the SEC does have jurisdiction. And I suspect that Mt Gox may be way off into felony territory right now. There is a big difference between an exchange not being responsible for ordinary losses. It is quite another thing to play games in order to score off the customers by fooling them. We shall see.

Maybe Mt Gox is really just temporarily shut down bitcoin transfers outbound to fix a real software problem. Maybe. But I doubt it. I really do. I think they are more likely burning the furniture boys and girls.

But hey, Mt Gox has always been a roach hotel. This is the roach hotel modus operandi all over again.

GoogleGlass & Glucose Sensor Contact – Quo vadis Google?

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I think GoogleGlass is a stepping stone to GoogleContacts.

Google has unveiled a glucose sensor contact lens.  I worked with glucose detection 10 years ago. I filed for a patent for a glucose detection system based on a lens that changes optical properties in response to glucose. In my system, a lens-reader could look through the eyelid while the person was asleep – and periodically throughout the day.

It turns out that the period of sleep is a big problem for diabetics. It’s when blood sugar can drop dangerously, doing damage. Being able to monitor blood sugar during sleep is important, and not something any system does now.

The optical lens approach I decided on is cheap as dirt to make. It is easy to apply to any lens. This expensive, chip-in-a-lens lens is not terribly practical, because a person with diabetes can’t afford to have the lens fail, and it has to be a non-permeable lens, which limits the wear period.

But - I think the real reason Google is going this direction is to get experience making display contact lenses while also doing something that could be good. Display contact lenses were prototyped – about 17 years ago. There was a writeup in EE News.

Display lenses are more Google’s upscale mass market target – GoogleGlass.

How Democracy dies – journalism is broken

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I have been right in the middle of international stories on the ground, and seen first hand what a joke the reportage was. I have attempted to correct stories that had huge errors of the upside-down-and-inside-out variety and never gotten anywhere – ever.

My diagnosis of the reasons for this are many.

First, there are no nation stringers anymore. And even when there were, I heard Mike Wallace joking once about how he covered Beirut from bars in Cyprus.

Second, this means that freelancers go in and report. Those freelancers range from dingbats (some have been characterized, on the record, by US troops they embedded with as ‘f*@king b@t$#it crazy’) to people with ideological axes to grind who ignore/refuse to acknowledge anything incompatible, to a supposed rare few who actually are interested in reality. (Coskun Aral, I never met.) I will say that on the ground in Central Asia I never once met any journalist interested in reality. What I met were guys who got cut, generally over 50, needing to establish themselves as international freelancers. A week or 10 days in country talking to random folks on the street and they’re outta there.

Yes- once in a while, high end ‘organization’ journalists will go into the field – as with the feeding frenzy in Tahrir Square during the ‘Arab Spring’. I will point out that the very fact they went there, compounded by sending pretty western women into the square (some of whom were literally stripped naked and raped – stories that were suppressed by MSM) showcased how utterly out of touch and naive they were.

Third, the impact of the employment contraction on journalism cannot be overstated. Today, journalists defend their turf because doing so is a requirement for survival. So no other journalist in the organization except ‘the guy’ who is the ‘international specialist’ will even talk to you. And that specialist is in DC because almost all news organizations are now conglomerates, and obviously, DC is the only place ‘international news’ happens.

Fourth, the international specialist has extreme antipathy toward anyone saying they are wrong. Their job is a good one in the industry, and they keep it by getting the story right. It’s a very big deal for a well-paid specialist to go to their editor and say, “Hey, here’s this guy, he says I’ve got everything wrong.” They won’t do it, because if they do, they could lose their job to an up and comer who wants their office. Only a rival organization that gets a different story into its system will run with a different story.

Fifth, I don’t have proof of this, but in the job-insecure environment of journalism today, I think that freelancers, company men, and editors take bribes. The reasons are obvious: personal gain and survival of the news organization. There are two kinds of bribe. A.) a straight-up payoff from either a national government or a party with skin in the game. B.) a favor demanded by someone powerful in order to get access. ‘Run this story and I’ll give you front row seats for our campaign/inside/etc’

Sixth, the news environment has gotten polarized, controlled by political faction-groups. This has further degraded the quality of journalism, which has become a contest of talking-heads holding forth in an often fact-free conversation. It is just too much trouble and too costly to actually go and collect the news. (Not to say dangerous in some cases.) In this environment, opinions rule, and facts on the ground are secondary because few bother to collect them and editors increasingly don’t care.

Last, I think that establishing journalism as a major in universities was a huge mistake. This has led to legions of people going into it in large part because they couldn’t cut it in STEM. I say this having finished a doctorate at UC Davis in 2009. As a TA I saw what the kids were doing/thinking. I talked to them, was around them all the time. I remember one young lady in the journalism program who asked me, “Um, what’s this, USSR?” She was reading something I had written.

So we have developed a cadre of people who conceive of themselves as the only proper people to report the news. And they can’t do math. They can’t understand basic science. They have no interest in history. They don’t know history. They have no concept of strategy in war nor politics. They are, in short, remarkable idiots. We have, de facto, created a class of people who control our information flow who are, on average, utterly unqualified to do so. This has to change. The most effective way to change it would be to refuse to hire anyone with a journalism degree to work in news reporting or editing.

Journalists should be drawn from sciences, history majors, even car mechanics instead. What makes a journalist effective is that they are connected to the world and understand it.

Altogether, this is very alarming to me. Democracy cannot function without accurate information. And when I have been close to it, or in the middle of it, the official record is now flat wrong. Historians will use it, and real history is simply gone.

Bitcoin is a currency! To the extent it is used as such.

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Bitcoin  investments are real money!  Bitcoin has been legitimized! 

This is based on a tersely worded decision by Amos L. Mazzant, a judge who wasn’t about to let a cunning ripoff artist get out of his courtroom unscathed. But his decision, on examination, is sloppier than it looks. There are three key sentences, and a conclusion to his opinion.

CONCLUSION
Therefore, the Court finds that the BTCST investments meet the definition of investment contract, and as such, are securities.2
For these reasons, the Court finds that it has subject matter
jurisdiction over this matter, pursuant to Sections 20 and 22 of the Securities Act of 1933 …

2
Having found that the BTCST investments are “investment contracts” and, thus, securities, the Court will not
consider whether the BTCST investments are also “notes.”

That’s it for the conclusion. BTCST is Bitcoin Savings and Trust. It found that the (alleged) scammah-jammah’s representations to the public who gave him Bitcoins, are securities because Bitcoins were used as money.

The opinion discussion’s three most important sentences are: A. “It is clear that Bitcoin can be used as money.” B. “The only limitation of Bitcoin is that it is limited to those places that accept it as currency.” C. “Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.

So, bitcoin is money to the extent it is used as money.

PS – Forgive me for publishing this one late. I guess I got interrupted and didn’t hit publish.

PPS – The original post had an error, because I misread the meaning of the opinion by Mazzant. When I read it, I thought Mazzant was referring to bitcoins as the security which were redeemed. However, he was referring to the investments sold by Shavers. Thanks to Surda for pointing that out.

MMOG of Thrones – NSA tapping massive, multi-player online gaming

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Yo-ho-ho and a bottle of rummies. The NSA is monitoring gamers online for terrorist communications. Ignorance mocks … and is flat wrong. 

WWC

Games “are built and operated by companies looking to make money, so the players’ identity and activity is tracked,” said Peter W. Singer of the Brookings Institution, an author of “Cybersecurity and Cyberwar: What Everyone Needs to Know.” “For terror groups looking to keep their communications secret, there are far more effective and easier ways to do so than putting on a troll avatar.”

Uh, Peter dear. In a word, “No.” The business of videogames is more complicated than that. the top three major pay-to-play markets are: South Korea, Japan, and USA. To be successful, videogames need players, lots of players. If nobody else is in the game when you login, it’s no fun. 

So game companies set up portals in poor nations to allow gamers in for free. That way, when they roll out the portal for the big three pay-to-play markets (S. Korea, Japan and USA) the games are well populated with players. Games set up systems to allow gamers to make money selling game-acquired stuff online. 

I can tell you from direct observation that MMOG is very popular in poor nations in Central Asia. Unemployment is high. Revolutions and civil wars are remembered by everyone, or else they know people who do. Lots of time on their hands plus practical interest in warfare, plus not getting reinforcement out of their real-world (rather stark) life = passion for gaming. 

The most common MMOGs were Counterstrike and Delta Force in the years I was there. It’s moved on. Tank World has had a run. Granted, those don’t lend themselves to coded communications. But the point should be clear. In that part of the world, they play, they play for free, and companies don’t know who they are – nor do the companies care. 

Plus – outside the developed world, hacking is not a hobby, it’s a method of survival. For instance, I hired a gentleman who had: built his computers from parts acquired from the dump; wired a stepdown transformer to the subway tracks to supply his house; cracked and installed software from Windows and Autodesk CAD to EndNote and Mathematica. Trust me, those guys would have no issues with hacking into MMOGs to play on other’s accounts. 

And Mr. Singer?

  • In the spy business, lack of evidence has no relationship to lack of activity. Good spies don’t show evidence. 
  • In the spy business, if you don’t dig around and find nothing the vast majority of the time, then you are missing a huge amount. Or, you might be digging on a motherlode planted there to mislead you. 

Larry Summers – Push that rope!

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Larry Summers, neo-carmudgeon at large, held forth, warning a permanent slump is upon us. Forsooth and begorrah! Beggar me Larry.

Quoth the Krugman – Woe! ‘Tis lore!

You’re only 58 Larry! Krugman honey! You’re 60!

The primary issue with QE is that loans are demand driven. You can’t push a rope. QE is the Fed doing its best to push a rope. Congress could pull on the rope, but it isn’t. So we are left with the Fed pushing on a rope. Pushing that rope has meant that the fattest fat-cats, right next to the money spigot of the Fed, grow fatter.

So spend more!  Government spending pulls real economy activity, which creates a multiplier effect through loan demand by creating qualified borrowers. The Fed’s QE has been trying its best to push a rope. But the only reason the Fed has to do that is because of the cretinous congressional budget cutting.

Dear lord. What could be more obvious than that? Dear Larry. Never one to rock the boat or cut to the nub of a problem. It’s a fiat currency world. Keynes and all that.

Come on guys! Do something useful with your fame and Nobel Prize. Make it your life’s work to destroy that cretin, Grover Norquist. If you won’t speak up, what the hell do you expect!

No amount of jawboning, no amount of QE, no amount of anything can substitute for running that idiot Norquist into the deep dark hole he belongs in.

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