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2018-01-09 12:10 by Karl Denninger
in Corruption , 217 references
[Comments enabled]  

Were there anything approaching the Rule of Law in this country Intel would be bankrupt by now.

Let's leave aside their claim, made publicly, that their chips were operating "as designed."  Maybe so, but the question then becomes did you know they were vulnerable and yet proclaimed on a continued basis that the ring design you used was secure?

See, the problem isn't that Intel made a mistake.  We know they did.  There are two different attack vectors involved here and Meltdown doesn't impact anyone but Intel (AMD and ARM are not vulnerable) and the Meltdown bug, which Intel is vulnerable to, is the far-more serious problem because it allows cross-protection boundary access to data.  In other words the allegedly-secure encryption keys in said protected parts of the environment are not secure.

Companies make mistakes all the time.  But what we now know is that Intel knew of the problem six months or so ago and yet continued to manufacture and ship chips that they knew were vulnerable in this manner.

Worse, their CEO sold a huge amount of stock -- all but the board-required minimum holding -- after the company became aware of the flaw.

Why did not Intel shut down the production line and recall everything in the pipeline until they could get a new photomask and start producing chips with the issue mitigated once they became aware of the problem?

Because Intel would have taken a huge financial hit, that's why; it would have cost them billions in sales.

Instead Intel sold into the market chips they knew were insecure and the operating system changes required to work around the flaw, which at the time did not existwould materially impact performance.

Where are the damned indictments?

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2018-01-08 10:07 by Karl Denninger
in Corruption , 228 references
[Comments enabled]  

Let's start with Cuomo and others, and make clear to both state governors and their legislatures that introducing, passing or signing a bill that constitutes a fraud upon the federal government by its very nature will be met with an immediate criminal felony indictment.

The Federal Government needs to make clear that this sort of game won't just be taken to court; the people who attempt same will be arrested and prosecuted for felony tax evasion.

 by tickerguy

Folks, the law is clear and that there are already schemes out there that arguably meet the same sort of criminal standard doesn't mean we should look the other way.  To the contrary.

To be a charitable contribution you cannot receive anything of value in return for the alleged donation.  If you do then you must take off the entirety of the received value from the alleged charitable contribution you deduct.

For example, let's say I make a $500 donation to my church.  As the church is a 501c(3) I can deduct that.  However, if the church as a consequence of my donation invites me to a $200-a-plate dinner (it's free market value) then I can only deduct $300 of the $500, because I received something worth $200 as a consequence of my "contribution."

This is long-standing federal law.

So were a state to, for example, set up a scheme where you could "donate" to your district school and take that off your taxes in an attempt to game the SALT change that's disallowed because you received something of value (the state tax reduction) for the alleged "donation."  If you then allegedly take the so-called "charitable" deduction you have committed the federal offense of tax evasion because your so-called "charitable deduction" is false; you claimed it on something you got value for and as such it's already disallowed.

In past years when I was running MCSNet I basically always itemized (because it was the better choice) and thus took charitable deduction for those contributions I made to charities of various sorts.  However, in some cases I got something of value back, such as a set of tickets to a show or similar, and the value of same had to be taken off the deduction.  In this case the value of same is dollar-for-dollar determinable since it would result in a dollar-for-dollar deduction from the state or local (property, usually) tax owed and thus same is disallowed.

This requires no new laws or interpretations -- the federal tax code has been this way since I have been earning money and paying taxes!

This is not a mistake or an interpretation; the state and local authorities are well-aware of the fact that any value received for a charitable donation must be subtracted dollar-for-dollar from the alleged deduction and as such attempting such in state law is a knowing ruse and thus a federal, and felony-level at that, criminal act.

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2018-01-04 07:00 by Karl Denninger
in Corruption , 230 references
[Comments enabled]  

Now this is amusing...

Hinting there's a "there" there: Per the Guardian: “ 'You realise where this is going,' [Bannon] is quoted as saying. 'This is all about money laundering. Mueller chose [senior prosecutor Andrew] Weissmann first and he is a money-laundering guy. Their path to f---ing Trump goes right through Paul Manafort, Don Jr and Jared Kushner … It's as plain as a hair on your face.' "

Uh, probably right.  And probably ugly too.

Never mind that if true this isn't "Russian Election Interference" either; it's violations of sanctions that have been out there for a long time and money laundering to cover it up.  There's nothing generally illegal about engaging in transactions with foreign entities unless you try to either evade taxes on the gains or are engaging in transactions with a sanctioned entity.

Then it's big trouble.

It also becomes a charge that would be nearly-impossible to justify a pardon over, since you cannot argue that the sanctions are "improper" or otherwise indefensible.  In other words you cannot raise a "process" argument; sanctions against individuals and foreign firms/governments are something we claim to honor all the time including right now with North Korea.  As such pardoning anyone for an offense of that sort is exactly the kind of act that could give rise to an impeachment bid within the Republican party.

Nobody is, of course, paying any attention to this as a "risk" but that IMHO is idiotic.

The risk is real and so will be the consequences if it plays out that way.

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2018-01-03 10:50 by Karl Denninger
in Corruption , 205 references
[Comments enabled]  

Once again, this is infuriating...

WATERLOO, ONTARIO and BEIJING, CHINA--(Marketwired - Jan 3, 2018) - BlackBerry Limited (BB)(BB) and Baidu, Inc. (BIDU) announced today that the two companies will collaborate to accelerate the deployment of connected and autonomous vehicle technology for automotive OEMs and suppliers worldwide.

The companies have signed a statement of intent to make BlackBerry QNX's industry-leading ISO26262 ASIL-D certified safety operating system (OS) the foundation for Baidu's Apollo autonomous driving open platform. Also, BlackBerry and Baidu will work together to integrate Baidu's CarLife, the leading smartphone integration software for connected cars in China, as well as its conversational AI system DuerOS, and high definition maps to run on the BlackBerry QNX Car (Infotainment) Platform.

This is very material information and could easily double BlackBerry's market cap -- which is a tiny $7 billion these days.  Remember, Baidu is not only in China it's very large in that regard.

The stock is up 8% this morning, but that's not the news.

No, the news is that yesterday, prior to the announcement, not only was the stock up big there were a hell of a lot of $13 March Calls traded too.

In other words someone not only knew about this announcement they traded on it as well, and that's illegal.

There were plenty of followers-on I'm sure, and that's not against the law (observing the market action and buying or selling something doesn't use non-public information.)  But the person(s) who originally created the dislocation in the option trade and underlying are another matter entirely; that's a crime.

To Jeff Sessions and Putrid Orifice Threatening Uranus Suckface: Where are you and where is your so-called "Rule of Law"?  Too busy busting people for smoking weed and ignoring Hillary's crimes?  Or is it all the porn you're watching in the Oval Orifice and DOJ buildings, never mind the SEC, that has you addled this time around?

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2017-12-26 10:01 by Karl Denninger
in Corruption , 682 references
[Comments enabled]  

Time for this one again:


Just in from a reader..... Texas' teacher's retirement system (TRS) served up an upper-decker for Christmas.

You know all those teachers and others who say "they're protected" in their retirement -- and health care?

Well, maybe they are, but guess what -- their spouses?  Not so much.

Health premiums for spouses (paid by the retiree) just went up -- a wee bit.

From $200 -> $700 a month.

2% inflation eh?  Uh huh......  See what happens when you intentionally ignore all the fraud for years because you believe "I'm protected"?

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