Iranian IT Expert Alleges Wikileaks “Insurance” Is Spy Trap

More entertainment from the whole Wikileaks business. Now Iranian IT experts are weighing in. And no doubt they are as credible (or as little) as US IT experts. Caveat emptor is the best defense against the whole benighted world of “spies,” “snitches,” “leakers” and “hackers.”

No need to trust Messiahs, even when they come armed with hacker credentials…

Expert Cautions about Intelligence Trap in WikiLeaks ‘Insurance’ File

TEHRAN (FNA)- An Iranian IT expert warned here on Wednesday that a mysterious download file posted by the WikiLeaks website, labeled as ‘Insurance’, is likely a spy software used for identifying the information centers of the United States’ foes.

“The mysterious file of the WikiLeaks might be a trap for intelligence gathering,” Hossein Mohammadi told FNA on Wednesday.

The expert added that the file will attract US opponents and Washington experts can identify their enemy centers by monitoring individuals’ or organizations’ tendency and enthusiasm for the file.

Meantime, the expert said that the file is not so dangerous to the US as it is claimed because of its encrypted information and password lock.

Although the website manager has warned that he would disclose the password in the event of a “takedown” of WikiLeaks by the US authorities or if anything happens to its founder, Julian Assange, all those who download the file cannot see and use its contents because it has a password, and unlocking the file and processing its encrypted information requires access to super-computers normally owned by giant organizations and IT centers, he said.

“Then the US can find supercomputers, secrete sites, strategically important centers of the opponent countries, specially China, Russia and Iran, through the downloaded file,” the expert noted.

Earlier, the western media reported that in the wake of strong US administration statements condemning WikiLeaks’ recent publishing of 77,000 Afghan War documents, the secret-spilling site has posted a mysterious encrypted file labeled “insurance.”

The huge file, posted on the Afghan War page at the WikiLeaks site, is 1.4 GB and is encrypted with AES256. The file’s size dwarfs the size of all the other files on the page combined. The file has also been posted on a torrent download site.

WikiLeaks posted several files containing the 77,000 Afghan war documents in a single “dump” file and in several other files containing versions of the documents in various searchable formats.

It’s not known what the file contains but it could include the balance of data that US Army intelligence analyst Bradley Manning claimed to have leaked to Assange before he was arrested in May.

In chats with former hacker Adrian Lamo, Manning disclosed that he had provided Assange with a different war log cache than the one that WikiLeaks already published.

This one was said to contain 500,000 events from the Iraq War between 2004 and 2009. WikiLeaks has never commented on whether it received that cache.

Additionally, Manning said he sent Assange video showing a deadly 2009 US firefight near the Garani village in Afghanistan that local authorities say killed 100 civilians, most of them children, as well as 260,000 US State Department cables. “

Open Society Institute Denies Its Foundations Fund Wikileaks

John Young at Cryptome had the following exchange with George Soros’ Open Society Institute (ISI) about Wikileaks.  I’m posting it below, although, to my mind, if there were a link it’s unlikely to be one so obvious. Still, since Wayne Madsen made the claim, I think it’s fair to follow up on it.

Note: The denial specifies ‘the Open Society Foundations‘; Young’s question addresses ‘the OSI or other initiatives funded by George Soros. It’s not clear to me that the foundations are the only Soros initiatives or that OSI is the only way funding might reach someone. However, since at least one group denies funding, that is a score for Wikileaks.

Also note that John Young has been quite scathing of people who smear Wikileaks from ulterior motives, claiming that one or two of Al Jazeera’s correspondents, while claiming to be asking on behalf of AJ, might be pursuing other agendas.

Dear Ms. Viczian,

This is the second time Al Jazeera has misled me into providing
information under guise of being interviewed for an appearance.

Claire Clark of Al Jazeera did the same on July 30, 2010. Her
initial message below, followed by telephone calls asking urgently
for more information, just as you have, claiming a deadline was near.

Ms. Clark lost her temper on the telephone at my accusation, but could
not effectively deny it, instead sceamed at me about her reputation
and accomplishments. I reminded that flaunting reputation is also
part of the tactic to conceal ulterior motives. I told he she was
lying about her reputation. That set off another scream of fake
outrage.

These are a common tactics employed by intelligence and law enforcement
agencies. I told Ms. Clark and I tell you, you are liars, working on behalf
of undisclosed parties under disguise of Al Jazeera. 

These are unbelievable pretenses, although that is a trademark of
Al Jazeera.

John Young
Cryptome.org

I’ve had similar experiences. Someone calls up pretending they want an interview. They interview at length…taking information and research..and then you never hear from them, or a miniscule amount of the interview appears somewhere, only to be later deleted. Meanwhile, you have worked for nothing…

Professional journalists (if one dares to give them that title) are some of the most ignorant, arrogant, and ethically- challenged “professionals” around, and yet, they are the filters through which most of us get to see the world. A truly frightening thought.

Either way, credible or not credible, the end result of all the leaking seems to me more confusion rather than less..

CRYPTOME:

10 August 2010

Subject: FW: Site Submission From Contact Us Form
Date: Tue, 10 Aug 2010 09:31:36 -0400
From: “Amy P. Weil” <AWeil[at]sorosny.org>
To: <cryptome[at]earthlink.net>Dear John Young,

Thank you for your query.

The Open Society Foundations do not support Wikileaks.org.

Best regards,

Amy Weil

soros-osi-2006.zip    George Soros OSI Foundation Tax Report 2006      August 10, 2010 (5.7MB)
soros-osi-2007.zip    George Soros OSI Foundation Tax Report 2007      August 10, 2010 (5.7MB)

9 August 2010. A has provided Soros Open Society Institute Foundation 2008 Tax Report:

soros-osi-2008.zip    George Soros OSI Foundation Tax Report 2008      August 9, 2010 (6.7MB)

No obvious mention of Wikileaks in the report.

9 August 2010


George Soros Open Society Institute Inquiry on Wikileaks

A writes:

I’ve been following coverage of Wikileaks’ release of the Afghan Diaries closely, and have admired your skepticism. I feel firmly we are on the same page. However, I would like to make an attempt to clear some possible disinformation that is floating about. While it’s obvious that the “diaries” are a mix of propaganda and publicly available information, I do suspect the entire operation is funded from a controlling interest.

Thank you for taking the time to read this far, and allow me to voice my concern. Many are running with the claim that Wikileaks was funded by The Open Society Institute. (Soros connection). I, myself, suspected the same, after Declan’s CNET interview with you…

“Operating a Web site to post leaked documents isn’t very expensive (Young estimates he spends a little over $100 a month for Cryptome’s server space). So when other Wikileaks founders started to talk about the need to raise $5 million and complained that an initial round of publicity had affected “our delicate negotiations with the Open Society Institute and other funding bodies,” Young says, he resigned from the effort.”

However, judging by that article, it’s just not clear to me, whether or not Open Society Institute, in fact, provided funding for Wikileaks.


Cryptome request submitted 9 August 2010 to:

http://www.soros.org/contact

Does the Open Society Institute or other initiatives financed by Mr. George Soros support Wikileaks.org, its staff, supporters or its affiliates, either directly or indirectly though other parties.

If financial or other support is provided could you describe it: extent, time frame, terms and conditions?

Your response will be published on the public education website Cryptome.org of which I am the administrator.

Thank you very much.

Sincerely,

John Young
Cryptome.org
251 West 89th Street
New York, NY 10024
212-873-8700

[Image]


Response to inquiry submission:

Contact

Thank you for contacting the Open Society Institute. Your message has been forwarded to the appropriate department for review.

We make every effort possible to respond to all inquiries—and in a timely fashion. However, due to the volume of email received, we cannot guarantee a response to every message.

General information about OSI and the Soros foundations network may be found in the About Us section of this website. Specific information about OSI programs and projects may be found in the Initiatives section.

[Image]


And a related inquiry faxed to the CIA 9 August 2010:

http://www.foia.cia.gov/sample_request_letter.asp

9 August 2010

By mail and fax to: (703) 613-3007

Information and Privacy Coordinator
Central Intelligence Agency
Washington, D.C. 20505

Dear Coordinator:

Under the Freedom of Information Act, 5 U.S.C. subsection 552, I am requesting information or records on Wikileaks.org, Julian Assange and others unknown associated with Wikileaks and its affiliates.

Please supply the records without informing me of the cost if the fees do not exceed $1,000.00, which I agree to pay.

If you deny all or any part of this request, please cite each specific exemption you think justifies your refusal to release the information and notify me of appeal procedures available under the law.

Information or records provided by you will be published on the public education website Cryptome.org for which I am the administrator.

If you have any questions about handling this request, you may telephone me at (212) 873-8700.

Sincerely,

John Young
Cryptome.org
251 West 89th Street
New York, NY 10024

German Court Approves Surveillance Of Leftist Leaders

Earlier, I posted Dr. Wolfgang Eggert’s petition against the Iraq war, but I’ve felt since then that the call to ban theocratic groups has more than a few problems with it that I should point out.

I understand the urge to do something forceful about an increasingly dangerous situation, but banning entails surveillance and surveillance is inherently expansive.

How does the government know which groups will turn out to be dangerous? It will have to monitor a much larger pool of allegedly “extremist” groups. Out of those the dangerous ones will be very few, but that won’t stop the net being cast wider and wider.

A second danger stemming from a ban is that the criteria employed are also likely to expand over time.  Theocrats and Nazis today. Conservatives and socialists tomorrow. Recent developments in Germany demonstrate this. Last month, the courts, which have already let the government deny the right of association to neo-Nazi groups, moved to uphold the government’s right to monitor certain leftist groups, with “historic” ties to the Communist party and “links” to violent extremists.

Clearly, such language is tenuous  at best and only illustrates how slippery this terrain can get both legally and morally…..

From Jurist.org (July 21, 2010).

“A German federal court on Wednesday ruled the government’s Federal Office for the Protection of the Constitution (OPC) can keep tabs on members of the socialist Left party using publicly available information. The decision overturns a ruling by a state court in North Rhine-Westphalia, which had said it was not appropriate for Germany’s intelligence agency to be gathering a file on The Left’s Thuringia state party leader Bodo Ramelow.

In its ruling the, court stated that the party has unconstitutional goals, which makes the government surveillance legitimate. The Left party has some historic ties to the former East German Communist party and has been linked to violent left-wing extremist groups. The suit challenging the surveillance was filed by Ramelow, who has indicated that he will appeal the court’s decision to the Constitutional Court.

The German government continues monitoring the rise of extremist groups and attempting to limit their influence within the country. Last November, the Constitutional Court upheld legislation prohibiting public support and justification of the Nazi regime. The ruling means that neo-Nazis are forbidden from assembling for the purposes of of approving, glorifying or justifying the Nazi regime.”

Our Soviet School System

Alan Caruba describes the subversion of the educational system (LRC):

(Note: I previously posted a left-oriented perspective of the government’s nefarious influence on education. As you probably know by now, I think an excessively ideological approach is something the power elite love – it keeps everyone fighting their neighbors while the PE get away with murder and mayhem…)

“I’ll bet you think that the problems with our nation’s schools are a fairly recent phenomenon. Wrong. It dates backs to the 1960’s. Those that have implemented the subversion of our educational system have sought to fly well below the radar of public awareness, depending on stealth and duplicity to achieve the wreckage that has already stunted the lives of thousands who have passed through it.

No other topic has evoked as much email as did our weekly “Warning Signs” commentary, “Indoctrination, Not Education.” Good. Time to wake up America!

In this and three other commentaries, I will walk you through the history of the problem with the help of an extraordinary book, The Deliberate Dumbing Down of America by Charlotte Thomson Iserbyt. The facts I will share with you are found in a fat compendium of research by this former senior official with the US Department of Education who discovered the mother lode, copied it, and fled. She is one of America’s unsung heroes.

As Iserbyt points out, in the 1960’s “American education would henceforth concern itself with the importance of the group rather than with the importance of the individual.” The purpose of education would shift to focus on the student’s emotional health, rather than academic learning. Remember the 1960’s? Sex, drugs and rock’n roll? Drop out, tune in, and turn on? Just about everything that is wrong with America today had its genesis in this pathetic decade of youthful self-indulgence.

In 1965, there were two major federal initiatives developed with funding from The Elementary and Secondary Education Act passed that year. One was the 1965–1969 Behavioral Science Teacher Education Program and the other was the publication by the government of “Pacesetters in Innovation,” a 584-page catalogue of behavior modification programs to be used by the schools.

Let me repeat that: a catalogue of behavior modification programs! We’re not talking of programs to teach students anything. We are talking about programs to indoctrinate children passing through the system to believe in values contrary to those on which this nation was based.

In brief, the intention was to create a generation or two of Americans who would accept the United Nations, not the United States, as their new “nation,” a global nation, one-world government. The last thing the conspirators wanted was a nation of individuals who could or would actually think for themselves. This is how we ended up with Bill Clinton, the classic student achiever of the 1960’s.

Iserbyt writes that, “In 1960, the United Nations Educational, Scientific and Cultural Organization’s Convention Against Discrimination was signed in Paris. This convention laid the groundwork for control of American education, both public and private, by UN agencies and agents.”

Now connect the dots. In 1960, “Soviet Education Programs: Foundations, Curriculums, Teacher Preparation” was published under the auspices of the US Department of Health, Education and Welfare. It was the blueprint for the US school-to-work restructuring that would take place and it would rely on the “Pavlovian conditioned reflex theory.” The mastermind of mind control and conditioning was a psychologist, Dr. B.F. Skinner, who was the guru of the mess that passes for education in America today.

Though hard to believe even now, the US adopted the Soviet Communist approach to education. In 1961, Rep. John M. Ashbrook tried to alert Congress to what was happening. Citing a document published by the Department of Health, Education and Welfare called “A Federal Education Agency for the Future,” he called the new education programs “a blueprint for complete domination and direction of our schools from Washington. Guess what? He was right.

That is why the educational reform this nation really needs is the complete elimination of the US Department of Education. It won’t happen. For the same reason we are now only learning that those “Red baiters” of the 1950’s were right to assert the Department of State was shot through with Communists, no one in 2001 is going to believe that the US Department of Education is modeled on Communist theories.”

BP’s Silent Siren

From The Rag Blog:

“Now, comes the disquieting news that the emergency alarm on the oil rig in the Gulf of Mexico was turned off the night that 11 workers were killed, and that the biggest oil spill in U.S. history began to wreak havoc. This news comes not from a CEO at BP, but, as is so often the case, from a worker — from Mike Williams, who was the chief electronics engineer on the rig. Williams recently told investigators that the alarm was turned off deliberately so that workers would sleep through the night and not be woken by “false” alarms. Hey, who wants to lose sleep, especially when the world might be blown to kingdom come?”

The Defense-Academic Complex At U Penn

Aletho News:

“The Pentagon permeates everyday life in America. Its influence, along with that of the 15 U.S. intelligence agencies, is almost everywhere. From movies like Iron Man and G.I. Joe to video games like Halo 2 and America’s Army, from Home Depot to Google, from MIT to Harvard, the list of Pentagon-sponsored corporations, institutions and products is miles long.

Of course, with two wars going strong and more than 800 military bases in 40 different countries and overseas territories, our global military presence is massive and requires maintenance. As a result, the U.S. accounts for nearly half of all military spending across the globe.

All in all, this presence has meant 60 years of near-constant warfare for America. Between the end of World War II and the end of the Kosovo conflict, the U.S. engaged in more than 200 non-covert military operations, according to a tally by the Federation of American Scientists.

But what does this have to do with you? Penn is part of the “military-industrial complex” (to borrow a term from President Eisenhower) that keeps America’s war machine running. In fact, academia in general is a key pillar in the apparatus that produces weapons, technology, information and innovation for America’s military bureaucracy and its private corporate partners.

According to a 2002 report by the Association of American Universities, nearly 350 colleges and universities do Pentagon-funded research. The Department of Defense (DoD) is, in fact, the third-largest provider of funding for university research, after the National Institute of Health and the National Science Foundation.

Penn is a microcosm of this reality. It has a long history with the DoD, as well as the CIA and the FBI, including a decade-long stint in the 1950s and ‘60s as one of the premier institutions for secret chemical and biological weapons research in the country. Penn does not engage in classified research today, but non-classified research continues apace. For example, in the 2009 fiscal year Penn received approximately $34.3 million in funding from the DoD, according to Penn’s Vice Provost for Research Dr. Steven Fluharty. This money represents only 4.8 percent of total government-sponsored research at the university, but since Pentagon money is often concentrated in very specific departments and laboratories, it has a large impact on a number of disciplines, especially engineering, computer science and math.

The Coming Robot Army: The Case of the GRASP Lab

Penn’s General Robotics, Automation, Sensing and Perception (GRASP) Lab is an interdisciplinary research center nestled neatly into the fourth floor of the Engineering School’s Levine Hall. Bringing together engineers, biologists, mathematicians and computer scientists, the GRASP Lab develops sophisticated robots and the operating systems on which they depend. As a result, it is an on-campus favorite of the Pentagon, which is currently working to replace a large swath of U.S. military personnel with robots and drones.

Almost all of what is being undertaken at the GRASP Lab involves graduate students. The end product is often a series of algorithms, a computer system or a conceptual framework — no one at Penn is developing actual bombs or missiles. And because such research is basic, it also has potential applications outside the realm of war, in search and rescue missions, for instance. Yet as far as the DoD is concerned, the work the GRASP Lab does is the first link in a chain of research and development on which the Department depends as it develops technology for use on the battlefield.

Many have read about the drones the U.S. military is using to conduct bombing raids and surveillance operations in the Middle East. According to Defense Industry Daily, Penn professors, through the SWARMS project, are trying to get those drones to “autonomously converge on enemy troops, aircraft and ships, decide what to do, then engage the enemy with surveillance or weapons to help U.S. forces defeat them. All this without direct human intervention.”

SWARMS, which stands for Scalable Swarms of Autonomous Robots and Mobile Sensors and is headed by Penn professor Vijay Kumar, was funded by a $5 million grant from the Army Research Office. The project is near completion, but similar technology is being developed and applied further under another project, Micro Autonomous System Technologies (MAST) Alliance. This was funded by a $22 million grant for 10 years from the Army Research Lab — the single largest grant in the Engineering School’s history. Like SWARMS, the project is working to enhance “warfighting capabilities” and “situational awareness” in “complex terrain, such as caves and mountains, or an urban environment,” according to the Army.

The SWARMS project and MAST Alliance are being developed for use in the drones that have a central role in the military’s strategy in Afghanistan and Pakistan and are highly publicized in U.S. media. These technologies, nevertheless, are controversial. The New York Times estimates that such attacks have killed approximately 700 Pakistani civilians between 2006 and 2009, while the New America Foundation reports that between 250 and 320 Pakistani civilians have been killed in drone bombings over the same period.

For another project, the Nano Air Vehicle, professor Mark Yim says he received a 10-month $1.7 million contract from Lockheed Martin, the largest arms manufacturer in the world an

d a subcontractor of the DoD. His task was to help develop a 1.5-inch flying robot that looks like a maple tree seed and includes a “chemical rocket enclosed in its one-bladed wing,” a tiny robot that can fly in the air, conduct surveillance operations and readily deliver two-gram “payloads,” a euphemism for bombs, rockets, surveillance devices or whatever else can fit in its minuscule frame.

When researchers were asked about the ethical implications of their work — the preceding examples are only a brief sampling of Penn’s military research — almost all of them took refuge in “hope.” Kumar, for instance, said he “would hope that [the SWARMS technology] would be used to save human lives.” The military, however, has a clearer view of what it wants out of Kumar’s project and others like it. Discussing its overall research agenda in its 2008 annual report, the ARO stated: “The vision of the Director, Army Research Office is to develop the science and technology that will maintain the Army’s overwhelming capability in the expanding range of present and future operations.” In other words, SWARMS and projects like it are meant for war.

Intelligence Agencies, Mandarin Teachers and Covert Classrooms

Research is not the only area of university life in which the military and intelligence establishment are interested. What happens in the classroom has also become a priority for certain agencies. The most notable example of this phenomenon is the Pat Roberts Intelligence Scholars Program (PRISP). With the advent of PRISP, the federal government now operates its own secret scholarship program for future spies and intelligence analysts.

The brainchild of anthropologist Felix Moos and Senator Pat Roberts, “PRISP links undergraduate and graduate students with U.S. security and intelligence agencies like the NSA or CIA, and unannounced to universities, professors or fellow-students, PRISP students enter American campuses, classrooms, laboratories and professors’ offices without disclosing links to these agencies,” according to anthropologist and reporter David Price.

Participants in PRISP receive up to $50,000 in tuition and stipends over a two-year period for university programs that have been approved by one of the U.S. intelligence agencies. In return for this funding, each participant must work as an analyst for the approving agency for at least one and a half years. There is no way to tell if PRISP students are active on Penn’s campus, and that’s the point. Nobody knows who is or is not a soon-to-be secret agent or analyst for the government.

There are other cases in which intelligence agencies are operating openly on Penn’s campus. The most explicit example is that of International Relations 290, Introduction to Theory and Practice of Counterintelligence. Frank Plantan, Bruce Newsome and Anne-Louise Antonoff will teach this undergraduate course for the first time this spring. The course is not particularly unique, except for the fact that the Office of the National Counterintelligence Executive (ONCIX) developed it.

International Relations 290 came about when a representative from the Office of the Director of National Intelligence (DNI) approached the International Relations department at a national security symposium held at Penn in the spring of 2009. Plantan, a co-director of the undergraduate International Relations program, says that both the curriculum and the syllabus for the course came from the DNI (of which OCNIX is a part), which will also send speakers to Penn to discuss the various subjects the class will cover. Penn professors merely teach the material that is provided.

Another example of visible operation of intelligence agencies at Penn is the Startalk Penn High School Chinese Academy. In 2006 the National Security Agency (NSA), in partnership with the University of Maryland, began sponsoring a series of language programs in an initiative called Startalk that teach “critical languages” — those deemed important by the national security establishment — to youth across the country. At Penn, Startalk kicked off in the summer of 2007, when 30 high school students and four local teachers received government subsidies to learn the intricacies of the Chinese language from Penn faculty. The program has continued every summer since.

Mien-hwa Chiang, one of the faculty members involved, recognizes that this program is the U.S. government’s attempt to develop the capacity to exert “soft power ” in the realms of language, culture and communication. She acknowledges, however, that while the students are familiar with the Startalk name they do not know that the program is an NSA initiative. In fact, in scanning Startalk promotional material it is nearly impossible to find any mention of the NSA.

Penn sophomore Chloe Summers participated in the Startalk program two years in a row before enrolling at Penn. She said that while she assumed the program had something to do with the government, she was never told that she was involved in a national security initiative. “Basically what I thought is they are trying to get students to learn Chinese so [the government] can hire them in the future. But it wasn’t explicitly said, they didn’t say it was sponsored by the NSA. It was very ambiguous,” she says. As with INTR 290, an intelligence agency is taking an active role in the classroom with Startalk. But in this case, children under the age of 18 are being incorporated into a national security strategy without full disclosure.

Footnotes from History

None of this is new to Penn. During the 1950’s and 1960’s, according to documents obtained at the University Archives, Penn’s now-defunct Institute for Cooperative Research researched biological and chemical weapons and developed delivery systems for them, funded by massive secret grants from the Pentagon. Back then, students could take Political Science 551, Strategic Intelligence and National Policy, a “thinly disguised training course for future intelligence agents” taught by a pair of former spies, according to a 1966 report in Ramparts magazine title “A War Catalog of the University of Pennsylvania.”

A string of revelations in the 1970s, many of which appeared in reports in the Daily Pennsylvanian, revealed the extent of Penn’s covert involvement with the national security establishment: In 1977, for instance, declassified CIA documents revealed that Penn had participated in the CIA’s secret MKULTRA mind-control experiments, which used narcotics, electric shocks, poisons and chemicals on volunteers, unwitting human subjects and prisoners. Declassified documents from the FBI’s domestic spying program, COINTEPLRO, revealed that at least one member of the University administration in the late 1960s was an FBI informant and that the FBI had attempted to influence coverage in the DP during the same period. It also came to light that the CIA had spied on student protestors in 1969 and that the University’s own campus security force had a history of spying on left-wing student dissident groups. The last revelation led to the resignation of two members of the University administration.

This is all to say that Penn has long been a stomping ground of the military and the U.S. intelligence establishment. There is one major difference, however, between the past and the present. Back then, when students learned about these issues, they took action. For instance, after the secret germ warfare research was revealed a series of large student protests shook the campus, including a six-day occupation of College Hall by 1,000 students and community members. Student action was supported by the faculty senate, which threatened to chastise Penn President Gaylord Harnwell if he did not cancel the secret germ warfare contracts. These actions worked: The contracts were canceled. Penn no longer engages in secret research.

These were the days when young people had their say. It was the age of the student power movement, which took seriously President Eisenhower’s warning, when he said: “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

Buy & Bail: Rich Bail-Out Babies Try New Fraud

Here are the poor, dear, desperate suffering home-owners whom savers (often retired folks on pensions, or thrifty low-income people) have to bail out:

Bloomberg:

“Harvey Collier, a mortgage broker in Fort Lauderdale, Florida, says he gets as many as 10 calls a month from people planning to default on their loans. The twist: They first want financing to buy another home.

Real estate professionals call it “buy and bail,” acquiring a new house before the buyer’s credit rating is ruined by walking away from the old one because it’s “underwater,” or worth less than the mortgage. It’s an attempt to escape payments on a home whose value may never recover while securing a new property, often at a lower price with a more affordable loan.

The practice, which constitutes fraud if borrowers lie on loan applications, is continuing even after Fannie Mae and Freddie Mac, the biggest U.S. mortgage-finance companies, beefed up standards to prevent it, according to brokers such as Collier and Meg Burns, senior associate director for congressional affairs and communications at the Federal Housing Finance Agency. Whether driven by greed or desperation, the persistency of buy and bail underscores the lingering impact of the worst housing crash since the Great Depression.

“People were holding on, hoping the market would turn around,” Collier, who won’t work with applicants who intend to go into foreclosure, said in a telephone interview. “But now they’re giving up because there’s no light at the end of the tunnel in places like Florida.”

It’s bad enough that the thrifty and prudent have to foot the bill for all these slick white-collar tricksters, but on top of that, we’re supposed to be broken-hearted for them……

FOMC Buys Time: Gold Up, Dollar Down

The Fed announcement today:

“The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.1 The Committee will continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature. “

Hard to tell exactly how this will pan out, but, for now, gold popped up and the dollar sank…

Bombs Against Burqas: White Men Rescue Brown Women From Brown Men..

Bretigne Shaffer has an excellent analysis at Lew Rockwell on the way the media is, again, drumming up support for expansion of the war in Afghanistan by appealing to women’s rights. This was precisely the same strategy employed during the war in Iraq, when statistics about female kidnapping, honor killings and so on were massaged to argue that further American intervention in the area was needed, when, in point of fact, the opposite was true – it was the US intervention that had  provoked the deterioration in the general economic picture and, as a consequence, the treatment of women. This is in keeping with the old colonial strategy decribed by post-colonial feminist critics –  “White men rescuing brown women from brown men…”.

“The Afghan Independent Human Rights Commission reported in March of 2008 that violence against women had nearly doubled from the previous year, and a 2009 Human Rights Watch report concludes that “(w)hereas the trend had clearly been positive for women’s rights from 2001–2005, the trend is now negative in many areas.” Other reports (including one from Amnesty International in May of 2005) call the first part of that statement into question:

Says Ann Jones, journalist and author of Kabul in Winter, “For most Afghan women, life has stayed the same. And for a great number, life has gotten much worse.”

Sonali Kolhatkar, co-director of the Afghan Women’s Mission, says “the attacks against women both external and within the family have gone up. Domestic violence has increased. (The current) judiciary is imprisoning more women than ever before in Afghanistan. And they are imprisoning them for running away from their homes, for refusing to marry the man that their family picked for them, for even being a victim of rape.”

Anand Gopal, Afghanistan correspondent for the Wall Street Journal, says “The situation for women in the Pashtun area is actually worse than it was during the Taliban time. …(U)nder the Taliban, women were kept in burqas and in their homes, away from education. Today, the same situation persists. They’re kept in burqas, in homes, away from education, but on top of that they are also living in a war zone.”

“Five years after the fall of the Taliban, and the liberation of women hailed by Laura Bush and Cherie Blair, thanks to the US and British invasion,” wrote The Independent’s Kim Sengupta in November of 2006, “such has been the alarming rise in suicide that a conference was held on the problem in the Afghan capital just a few days ago.”

The US military has made life worse for women in Afghanistan, not better. Is it possible that a US exit will result in their lives becoming even worse than they are now, as Bret Stephens and Time magazine fear? Of course it is possible. But what is certain is that the occupation has had a harmful effect on the lives of the vast majority of Afghan civilians – not a positive one as the promoters of war as a vehicle for social change assert. Also indisputable is that the Taliban has grown in strength since the occupation began, and it only continues to do so. This should come as no surprise to anyone who has looked closely at the motives for terrorism. Even US intelligence agencies have acknowledged that the US occupation of Iraq has strengthened Islamic fundamentalism and .”..made the overall terrorism problem worse.”

To call for even more certain death and destruction as a defense against imagined, possible worse bloodshed reveals a curious kind of moral reasoning. For let’s not forget what it is that Time magazine (despite its protestations to the contrary) and Stephens are defending: The indiscriminate killing of innocent men, women and children, in the pursuit of what they believe to be some greater good.”

Rick Ackerman: Debt Burden Defines Deflation

Rick Ackerman argues that the burden of debt is the key to identifying whether it is the “I” word or the “D” word at work in the economy today: 

“Concerning the inflation-vs-deflation debate, we’re going to try and kick the level of discussion up a notch or two with a couple of suggestions.  First, because the pro and con arguments often bog down in pseudo-intellectual claptrap about what constitutes “money,” we are going to provide you with foolproof way to recognize deflation for what it is – namely, an increase in the real burden of debt. Some will say that this is just a symptom of inflation, but we would tell them that it is ultimately only the symptoms that matter. Trust us on this: You’re a deflationist, just like us, if you believe that paying off your mortgage, servicing the $200,000 debt your daughter racked up attending Vassar, and retiring at 65 will not get any easier within the foreseeable future. If, on the other hand, you believe that Helicopter Ben and his band of tooth fairies will come to the rescue, raising your real income very substantially and causing perpetual increases in the value of your home sufficient to allow you to borrow against it just like in the good old days, then you are an inflationist.

When Money Dies

Our second suggestion is that you beg, buy, steal or borrow a copy of Adam Fergusson’s book, When Money Dies: The Nightmare of the Weimar Hyper-inflation. Used original copies of this minutely detailed and fascinating work go for upwards of $800, but if you search the web for the title, you can turn up cheaper ways to access it.  The book is essential for anyone who wants to understand why it would be impossible for the U.S. to trigger off a hyperinflation in the way the Germans did. The mechanisms simply don’t exist.  Fergusson will save you the trouble of searching a million web pages to find out how all those D-marks actually got into the hands of German workers. Surely this question has occurred to you, right?  Nearly all sources say the same thing – i.e., that the government revved up the printing presses, and… Bitteschön!… hyperinflation simply happened. In fact, putting a google of D-marks into circulation required a degree of collusion between the government and major employers that could not exist in the U.S. without major changes in the law.

It turns out that certain large German companies were allowed to print their own money in times of emergency. Because they did so most promiscuously when Germany’s official-currency printers were on strike, as occurred several times, the ironic result was that the most severe stretches of hyperinflation during the nearly three-year period occurred when sovereign notes were not even being printed. Another revelation from Fergusson is that some officials failed to see a hyperinflation threat even when money-creation was at full-bore. Would America’s political leaders be so stupid as to let hyperinflation occur inadvertently? And, was screwing the allies out of war reparations Germany’s motive for hyperinflating? In fact, maintaining a high level of employment was the original goal, and it worked to the extent that Germany in 1921 had full employment while the war’s victors were wallowing in joblessness. This book is a great read, and the answers you’ve been looking for are all here. “