The Market Ticker
Commentary on The Capital Markets
2016-10-22 12:46 by Karl Denninger
in Editorial , 460 references
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We're about to find out.

First, read Donald Trump's Contract With The American Voterwhich he just released in a bid to convert undecided voters.

There's a lot of good stuff in there.  In fact, I can't find anything in there I disagree with, and I bet you can't either if you're honest about actually improving the nation (leaving aside the red-meat pie-in-the sky stuff, such as "repeal and replace."  If you don't understand why that's a topic for another column.)

Nonetheless, one thing is missing, and it simply can't be missing if we are going to ever have America be great, whether you believe it is now, will be again, or for that matter can ever be in the future.

That's indictments and prison for the health care monopoly abusers violating 15 United States Code Chapter 1 -- a class of individuals and firms that, in my opinion, include virtually the entire health-care industry in this nation.  They have taken health care as a percentage of our economy from about 3% to nearly 20% in 30 years and if we do not only stop but reverse this now the federal government, state governments, pensions, all asset types and the American way of life will all collapse.

There are a number of ways to get there.  We could do it via the means outlined in a post I entitled "How to Fix The Budget" from 2012.  Or we could do it some other way.  I'm not married to the means, but due to the certain outcome if we do not act to resolve this issue now, I am forced to politically demand the ends in return for my vote.

The method by which we accomplish this goal will matter to many, but it matters little to me.  That we get there and do this now, however, is of primary imporance because if we fail to do so during the next President's term the American way of life in this country ends, and it does not matter who is elected President.

That's math, not politics.

On Monday, two days from now, Florida begins early voting.

I would like to vote for Donald Trump.

But if he does not, prior to my voting, publicly take the position from the above "How To Fix The Budget" post or something substantially the same that will plausibly lead to the same outcome, including specifically the enforcement both now and on a forward basis the existing anti-trust regulations against all health-related firms -- a power the Executive Branch already has and thus does not require any form of Congressional approval -- I will be forced to vote for Cthulhu exactly as I did four years ago.

I will not vote for the destruction of this nation irrespective of who will be President when it happens.

Yes, I'm a single-issue voter, and I'm not compromising on the issue that we must resolve in order to keep our nation.  We either act to save this nation or we do not.

To quote Yoda: "There is no try."

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2016-10-22 07:49 by Karl Denninger
in Politics , 515 references
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In just a few days we will begin open enrollment for everyone in Obamacare now.

Eight days before the election, that is.

This is what the nation is going to face:

There is nothing the Democrats can do about it either -- 22 states with massive double-digit premium hikes, 7 of them in excess of 50%.

Many are considered "safe" Democrat states -- Colorado, Maryland, Illinois, Connecticut, Hawaii, Pennsylvania.

Then there's Arizona, Florida, Maine and New Mexico.

How safe is PA?  Illinois will have a million dead voters show up at the polls; they're the land of 102% turnout and nobody has gone to jail in the modern era for doing it, so you can forget that.

Everyone thinks Pennsylvania is clean for Clinton, with "Real Clear" claiming a 6% advantage.  How "real" and "clear" is that, and how fast will it evaporate like a fart in the wind with 50%+ Obamacare price hikes hitting the residents of the state in the face a week before the election?

I will say it again: Trump has a card he has not played, and it's not "repeal and replace."

It's jail and indictand he needs to stick that right now out under the electorate's nose along with these price hikes -- not proposed, not thought about, but approved and coming right up the electorate's ass a week before election day.

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Gee, who would have thought....

San Francisco (AP) -- Apple says it has been buying Apple chargers and cables labeled as genuine on and has found nearly 90 percent of them to be counterfeit.

The revelation comes in a federal lawsuit filed by Apple against a New Jersey company on Monday over what Apple says are counterfeit products that were sold on Amazon.

Why isn't Amazon responsible for this on a legal basis?

It should be.


Because it takes a cut of the sales, it presents the products and runs the marketplace.

Counterfeiting is a major problem, and Amazon is a big part of it, despite their protests to the contrary -- particularly with products that source and ship from outside the United States since enforcement by US authorities in China is impossible.

If you rent out a house to someone who you have every reason to believe is going to sell crack you'll get busted along with the guy doing it.

Of course you're not Jeff Bezos and not a multi-billion dollar corporation, so you will get held responsible while those who are "privileged" will not -- even when they profit from the fraudsters and their operations.

Why do you put up with this again America?  It's why, to a large degree, we're being bled of our jobs, our capital and in fact being destroyed piecemeal by these protected giants.

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DNS, the turning of names such as "" into IP numbers, is an essential part of any online presence on the Internet.  Being without it in most cases doesn't reduce you to using IP numbers, it means what you're trying to do doesn't work at all, especially in any sort of shared hosting environment on the web.

The good news is that it's not all that hard to do DNS on your own but it does take some attention to do well, particularly if you care about security of your domain responses (and online transaction sites most-certainly do!)

The "save a nickel" crowd got rat****ed today, as there appears to be yet another instance of mass-stupidity which has infested the Internet and now it has blown up in those people's faces who relied on it.

This morning a ton of websites and services, including Spotify and Twitter, were unreachable because of a distributed denial of service (DDoS) attack on Dyn, a major DNS provider. Details of how the attack happened remain vague, but one thing seems certain. Our internet is frightfully fragile in the face of increasingly sophisticated hacks.


Why is Dyn at the center of all of this?  Is it impossible for Twitter, Amazon, CNN, Reddit, the NY Times, PayPal, Spotify, Soundcloud, AirBnB, HBO, Netflix, Etsy, Github, Vox and others to run their own damn DNS servers?

No.  They're just cheap, ignorant fools.

And, like the "cloud" guys (some of them are the "cloud guys") they bought into the same bull**** they peddle to the masses.

Oh, and it probably didn't help that a bunch of other cheap bastards sold a lot of crap into the consumer market (like webcams, etc) that are grossly insecure, trivially hacked and taken over either.

What appears to have wound up happening is that these firms DNS services got concentrated at one company instead of being spread out as the Internet was originally designed to work, and some malefactors discovered this and hammered the concentration point using said insecure devices as their "relays", trashing all of them at once.


It's not supposed to work like that, or have an impact like that.  But it did, and it does, and on we go.

You know, I'm just a little blog publisher.  But I run my own DNS.  I even secure it with DNSSEC so attempts to poison my zone won't work.

Gee, how come?

Because it's not really very hard, it's a small part of what running the rest of the site consists of in terms of effort and expense, and without DNS nothing works at all.

That last part is sort of important, you know.....

But heh, it's kinda like sticking your so-called "encrypted" data on a cloud machine, then putting the key there so you can use said data and believing that all of this is secure even though anyone who has administrative access at said cloud provider can almost-certainly read the memory image of your virtual machine, steal the key and once they've done so they have it forever.

Yes, I know, all these nice big cloud companies have great security policies, some might even fingerprint people and do background checks (is it really hard to pull a background check on a high-level sysadmin?).  It's not like taking the three or five guys and gals who might need "God" keys to the infrastructure at your company and multiplying the risk of compromise from five people to 500, including some who aren't even in the US and thus aren't reachable by US law through playing "cloud" is a bad idea, right?

Never mind that if some big company did screw the pooch they'd be held accountable both civilly and criminally, yes, just like the thousands of criminal charges brought against officers, directors and executives of various firms that have done all sorts of nasty things over the years, including the fraud-laced Internet bubble, the fraud-laced housing bubble and the pie-in-the-sky market bubble now, right? You could look at Yahoo, which was so forthcoming about being massively hacked with 500 million accounts stolen; they got indicted, right? Or you could look at all those indictments out at Wells Fargo offices for identity theft against 2 million consumers who had accounts set up under false pretense complete with claimed signatures that never were given (that's forgery, by the way, and bank fraud, by the way, and last time I checked both are crimes.)  Oh wait, you mean there hasn't been even one arrest made in either case and in the latter the abuse has been going on for nearly 10 years?  And how many similar screw jobs have there been in other big businesses and how many busts?  Uhhhhh..... yeah.

And as for the producers of all those nice "Internet of things" devices they have all been held accountable too, just like you would be for putting up a pool with no fence since they've been selling knowingly insecure devices that are trivially hackable and able to be abused to screw others, right?  I mean, we can find thousands of indictments against the officers, directors and owners of those companies, and a bunch of them are in jail right now,  yes?  Oh wait.....

Finally, and for context in the present situation, none of these firms would ever screw up due to just pure stupidity, incompetence, lack of knowledge or laziness, none of the people they hired would ever be careless, crooked, bribed or blackmailed and the firms would never take a shortcut like........ putting their DNS in the same, concentrated, non-dispersed and thus easily-attacked place?

Aw ****.

You folks getting the point of my last couple of articles on this yet?

Where's the media?

How come my phone is still silent?  Heh, it still works even if Netflix doesn't!

Yeah, that's what I thought -- we can't talk about any of this for real and how all these firms had it coming. Why no, we can't do that, because there's no accountability anywhere and everyone has been selling "vomit" claiming it's all good stuff, just like in 2005-2007.  The difference is that today it's in the Internet of things and "cloud" space but we must not have that discussion in the mainstream (and especially not the "investment" oriented) media because the minute we start having any sort of honest conversation in this area several dozen high-flying stupid-valuation hot-air firms all get turned into a big smoking hole in an hour and we get 2008, on steroids, all over again.

You read it here first, just like you did with WaMu and their dividends paid with magic capitalized interest in the founding posts for The Market Ticker that ran in the spring of 2007.

How's WaMu doing, by the way?

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Public cloud computing, that is, computers at a remote location you do not own but lease space on, which have a hypervisor and clients running under it where you do not have complete, 100% control of said hypervisor are not secure.

If you have allegedly "encrypted" data there that is accessed, modified and used on said machine then the key to decrypt said data must also be on the machine and unprotected so it can be used.  If that is the case it can be trivially stolen since the hypervisor has complete access to all of the memory and disk resources of the client process and once stolen any pretense of security vanishes like a fart in the wind.

This is the lesson of the Wikileaks "Podesta" and related hacks.  It is not that Russia was involved (or not), it is not whether the "hack" was criminal, it is nothing of the sort.  It is that many of these people had their data (email in this case) on a public cloud environment and said environment was trivially broken into and the data stolen within minutes of being targeted.

The media and "business channels" have not and will not talk about this underlying fact for the simple reason that a huge percentage of the current market bubble is being driven and sustained by these so-called "innovations" and what they've done to market valuation.

This is continually claimed to be the "future" of corporate computing, but if you follow this road, embrace this path, and do so with data that needs to be secure then this is what's coming to you the moment your data is specifically targeted, whether you like it or not.

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