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2017-05-17 11:05 by Karl Denninger
in Editorial , 470 references
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Let's take three at once here.

First, the alleged Comey Memo.  If that memo is real -- that is, if there really was a conversation between Trump and Comey in which he tried to talk Comey out of investigating Mike Flynn then there's real trouble brewing.  What's worse is that from reports thus far it appears the memo does exist.

That's impeachable.  It might, depending on the context, also be Obstruction of Justice, but I strongly doubt that it's able to be prosecuted without some sort of attendant threat.

It's not criminal to say that someone's a "good guy" and ask if an investigation can be concluded.  It becomes criminal if there's a threat communicated that is linked to the statement and no, the fact that you can fire someone doesn't make the statement into a threat.

So this is probably not an actual crime, but remember that impeachment is a political remedy, not a criminal one and therefore whether someone can be indicted is neither required or necessary.  It just happens to be a bar that, if you can jump it, makes impeachment far more likely to succeed.

Politically it would be suicidal for the Republican Party to support an impeachment over this issue and thus they won't, provided it stands alone and nothing else of substance appears that is linked to it.

Where the calculus changes immediately and irrevocably is if there is more; that is, if there is actual proof of some sort of collusion with the Russians within the Trump Administration or transition team and this memo proves up.  There is a monstrously-deranged set of views that this "must" exist somewhere, somehow among the Democrat party and although being unable to find and prove it up they cling to it like the hard-right clings to their bibles and anti-gay rhetoric.  Both sorts of irrational garbage are equally destructive, by the way and this one is literally tearing the Democrat Party apart.

I will note that there is no evidence at all for this sort of link as things stand right now and I don't believe it exists either based on the data that is in the public but if it emerges then Trump is burnt toast.

Second, on the so-called classified data allegedly given to the Russians in the meeting in the Oval Office.  So what?

Folks, there are two non-issues here.  First, the President can declare anything, classified or not, sharable with anyone he wishes.  I remind you that Obama did this repeatedly with various foreign state actors in the context of terrorism.  Second, in that context I'd hope the President would do so if it advances the cause of catching or killing those jackasses.  Nobody said a single word when Obama did the same thing, and the reason for it simple: It not only isn't illegal or improper it's expected and normal.  If you're deranged enough to go after Trump on this then you might want to consider consuming a whole bottle of Drano, as doing so would measurably improve the collective IQ of the country.

Finally, Seth Rich.  Over the last few days there have emerged claims that Seth Rich just prior to being murdered did send tens of thousands of emails to Wikileaks.  I remind you that when Seth was alleged shot in a "robbery" not one thing was taken from him.  I said at the time that this alleged "robbery story" stunk to high Hell and it now appears evidence is emerging that he in fact was the leaker to Wikileaks on the DNC materials and thus the odds are extremely high, given the proximity of his murder to him doing so, that he was murdered because someone found out that he had done so.  This is very plausible and it required only that someone was watching him at the time.

If Seth Rich was murdered for leaking DNC materials to Wikileaks then he was politically assassinated and that points straight back at the Clintons, Obama and the DNC generally.

That, my friends, should be the story here.

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Have you seen the reaction that GOP congressfolk are getting in the streets Mr. President when it comes to your so-called repeal and replace (which is nothing of the sort, and you know it)?

I think you have, if you're paying attention.

A lot of it is pretty ugly, and all revolves around the same sort of thing: Someone with a "pre-existing condition" that is facing a bone-crushing screwing.

Look, as a 53-year old who's healthy, and in fact while you're reading this I'm out in the woods enjoying myself instead of engaging in entrepreneurship if I "lose" the health lottery I'm ok with getting on a plane to buy whatever I need where I can't get butt-sexed by the monopolists you and Paul Ryan keep protecting, and if that is impossible due to an exigent circumstance I'm ok with dying. I've not had a bad run and I'm sure as hell not going to hand over a material portion of my wealth to people I believe are simply robbing the people of this country blind every single day.

But then again, that's because it's me.  You might want to consider that this sort of problem could befall someone else that a person cares about.  Like their wife or child, for instance.

That could lead to some very severe political solutions, and if you don't cut the crap it's going to, because your margin of victory wasn't really very big.  You know damn well how this works because you played the game; it's all about electoral votes, not popular ones, and you only needed to lose one "big" state and one smaller one and Hillary was President.

You didn't win Florida by much, and it's a big state.  If you'd lost Florida then just 8 more EVs and you would not be President.  Pick any of the heavily-populated states you won in the Midwest -- or Missouri -- and it's all over but the shouting.

I'll leave aside the potential for some non-political solutions that people might resort to if you and Congress keep ignoring the real issue and throwing BS at the people, because if we go there as a country then everything that makes America unique in the world is lost.  There's enough heat in the country right now that it wouldn't take much to set that off and you have to be a special brand of crazy to have any desire to see it happen.  There are, however, a fair number of people who are that nuts.  I'm quite sure you're not one of them and I thank the maker for that.

2018's election season is just around the corner.  Yes, you're not directly part of this one, but all 435 House Members are and either cementing those seats held by your party or destroying them is happening right here, right now and that fight will only intensify in the coming weeks and months.

President Trump, you simply have to come to grips with where the problem lies in health care. It's not access to insurance; as you know damn well if there was a terrorist bombing of a building every week where your properties were located it would be impossible for you to get insurance on those buildings at any price you -- or your tenants -- could afford. One of the reasons I believe you were a better choice than Hillary, incidentally, is that you understand this and as I said to a large number of people before the election "You have to be rather crazy to think that Trump would do things as President on purpose that would lead his own properties to be replaced by big smoking holes in the ground.  I'm not sure Hillary has the same level of concern; in fact I'm quite sure she doesn't."

Health insurance accessibility is, at its core, all about the price of the underlying service.  And let's cut the crap, eh -- that price has no market force or discovery mechanism available to the common man today, and hasn't for 30+ years.  That is why -- and is in fact the only reason why -- health care is so damned expensive and health "insurance" is what people are "falling back on."

This is why "single payer" cannot work, incidentally.  It fails to control cost because it has no mandate on price discovery.  It provides even more protection for those doing the screwing today than they have in the present.  It would destroy the few outlying beacons of competition that exist now and which make quite clear that common hospital procedures are priced at ten or more times a market rate -- such as the Surgery Center of Oklahoma.

Why does it cost $100,000 to treat cancer?  Why does it cost the federal government 25% of its Medicare spend (and likely that amount in Medicaid too) to treat a condition, Type II diabetes, that can be relieved in most sufferers at a cost of zero?  Why does it cost $80,000 to cure Hepatitis C in this country and under $900 in India?  Why is a scorpion sting a $50,000+ occurrence in Arizona and less than a hundred miles south in Mexico it's $200.  Why is a rattlesnake bite $150,000 when there is exactly nothing proprietary about rattlesnake venom?

You know damn well the answers to those questions: It's impossible to get a price for anything as a customer before it's done and what's worse is that the price you pay is based on a tied sale with what "insurance" you carry instead of the condition you have or how complex it is.  If you don't have insurance then you are charged 5, 10, 20 or even 100 times what is charged to someone who does.  If you don't consider this to define extortion and racketeering then you either have an IQ smaller than my hiking shoe size or you're profiting from doing it yourself. There is not one other industry where this kind of crap is or would be tolerated, from gasoline to groceries to construction to re-roofing a house or fixing a car and it certainly doesn't appear to be legal either under 100+ year old law (15 USC) which is a section of law designed, written and passed specifically to prevent exactly these sorts of abuses.

The so-called "medical industry" has built edifices worthy of the Taj Mahal and stuffed them full of administrators who do not provide one scintilla of care to anyone, all financed with debt up to the rooftops.  What's worse is that the medical industry has been sued over these practices and gone to the Supreme Court twice since the 1970s to try to get it all declared "legal" and lost both times yet neither the state AGs or Federal Government has come after these jackals with prosecutors and grand jury indictments a-blazing. Nor will the FTC chase down the medical industry for deceptive and unfair practices -- can you please tell me how refusing to quote a price or honor it, say much less billing someone for a "drive by" consultation in a hospital where a doctor literally says "hello" from the door and then sticks an out-of-network charge on your bill is anything but a fraudulent and deceptive practice?

I get it that if you take this on using existing law, which certainly appears fully adequate to put a stop to all of this, and demand (1) price lists be posted publicly for everything, (2) everyone pays the same price for the same good or service no matter whether they have insurance or not, who it's through or how they're paying, (3) that consent on an individual and priced basis is required for anyone able to give it; if you're unable due to unconsciousness or similar "drive by" and similar types of charges are deemed felonious and (4) the United States demands and enforces "most favored nation" for pricing of drugs and devices with any firm that refuses loses all its US patent protections and US licensing that we'd have a deep and immediate recession since roughly 15% of GDP would disappear in a puff of smoke in an afternoon.

All those facilities built with debt -- which is most of them, as I'm sure you know -- would be bankrupted immediately.

But that's good, not bad.  Someone would buy that bankrupt hospital the next day for 5% or 10% of what it cost to build, and the lights would remain on.  Costs would plunge like a stone thrown off one of your high-rise buildings; in fact, they'd fall by up to 90%.  Telling "practitioners" that Jeff Sessions will be as rough on them as you want him to be with dope dealers with maximum charges for peddling known lies when it comes to disorders such as Type II diabetes -- that one should "chase" their fast carbs with drugs instead of not eating the damn things in the first place would go a long way toward resolving not only the cost issues in health care but the underlying diseases themselves.

We have an opiod epidemic in this country in no small part because of the loss of jobs available to blue-collar workers -- people who are not rocket scientists; people with no hope, no future and no job prospects often turn to intoxication.  There's a lot of people in this country facing this situation today; most people fall under the "average" area of the bell curve when it comes to intelligence.  Their jobs went overseas or simply disappeared not only because of bad trade deals but because the medical system got parasitic to the point that it now consumes nearly one dollar in five in the United States.  Laws such as ERISA, EMTALA and similar anti-discrimination statutes along with this parasitic sector of our economy mean that a small business offering health coverage as a benefit will be instantly bankrupted by one person who gets hired and has a $100,000/year chronic condition, and the owner of said business is forced by law to conspire with the ill applicant that comes in his door seeking work to screw his other employees.

The result?  You're nuts to hire your first employee and you're definitely nuts to violate any of the thresholds that trigger various requirements in laws when it comes to benefit packages and similar.

One-person businesses are great but they need to grow into 5, 10, 20 and 50 person businesses for the United States to be great again.

They can't under the present system because just one event completely out of the owner's control destroys everything he or she has built, it is trivial for anyone who has such a condition to target said company and if they do there is nothing that either the employer or other employees can do about it.

If you put a stop to all of these abuses then all the small firms in the United States and those not-yet started suddenly have every reason to hire the first, 5th, 10th, 20th and 50th employee.  The threat of being destroyed by a parasitic venomous health care system that you are forced to conspire with as a boss is removed and American entrepreneurship is instantly unshackled.  Our nation becomes the country in the world with both the best system of law and a much lower cost of labor.  People with hope and opportunity have far fewer reasons to find solace in the bottle -- or the needle.

The recession such a change produces will be deep and nasty but it will also be over very quickly and the recovery will quickly eclipse anything this nation has experienced over the last 30 years.

You must accept the temporary (and severe) contraction in the economy that will occur when you fix this problem.  I know that economic contraction will happen, you know it will happen, and I'm sure you've had lobbyists via various indirect forms such as Paul Ryan tell you it will happen and thus you "can't" do anything like this.

You have to do it anyway Mr. President, and you have to do it now because if you don't not only is the political firestorm going to overrun you and the GOP the economic storm bearing down on this nation caused by 30 years of this mafia-style racket in the health "industry" is going to destroy our way of life and may destroy the American political system entirely.

I know you're aware of this which is why the AHCA tries to throw off some of the damage onto the States via block-granting Medicaid.

Take those people who are ready to lynch their representatives and turn into your strongest advocates.  Take the $50,000 cancer bill and make it $5,000 in a daywhich is not only able to be financed and paid in cash by the average American and insurance to cover it, if you're not yet sick, will cost a couple hundred bucks a year.  Take the person who has Hepatitis C and make that $80,000 bill for a drug that cures it $900 which they can put on a credit card, even if it's a 24% interest subprime card, and be cured.  Take the person with Type II diabetes and insist that their physician tell them the truth about their condition and that ceasing eating all carbohydrates other than green vegetables will probably result in not only zero medical expense but also normal blood sugar levels and prevent the otherwise-likely blindness, amputations and kidney dialysis.  Take the $8,000 "routine" childbirth and make it $900 which again can be paid by the average couple who wants to have a baby.  Take the person bitten by a rattlesnake and turn that $150,000 bill into a $5,000 bill -- still nasty, to be sure, but able to be paid. Make America a place where I want to start a new business that hires people instead one a nation where I'd be nuts to do so.

Give me a reason to set up shop where there used to be hope and bring that hope back with me, working toward alleviating the opioid epidemic instead of hiking in the mountains -- which is what I'm doing right now while you're reading this, and the reason I'm out hiking instead of bringing to market products and services I have invented is that you and Congress keep allowing this screwing to go on and I refuse to participate.

In short take all the people who hate you and the government generally because you have all allowed them to be butt-sexed for 30 years by the medical industry and turn them into people who love you because now their child, their wife or their husband can pay for the medical care they want and need rendering the entire "Obamacare" debate and discussion moot.

You can do this President Trump.  The Executive can enforce existing laws without Congressional involvement.  In fact Congress and their lobbyists can't stop you.

You not only can do this you must do it President Trump, and you must do it now.

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2017-05-15 17:20 by Karl Denninger
in Musings , 367 references
[Comments enabled]  

Sarah's blog is at 

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2017-05-14 08:25 by Karl Denninger
in Editorial , 602 references
[Comments enabled]  

I hate having to use this....


It wasn't that long ago that I wrote a few articles on the hubris of our government thinking they were the smartest people in the room when it came to computer hacking.  I pointed out that while we undoubtedly have very smart people working for the NSA and other three-letter agencies so do other nations and their people, along with "unaffiliated" folks who are just plain old-fashioned troublemakers, are equally smart.

Indeed, that was the focus of an article from 10/2014 in relation to one of Comey's brain-farts in which he implored Congress to basically force back doors into US-made equipment and software.

Now we get treated to the outcome without the force first, because the NSA was writing that code anyway and a group of crooks got their hands on it, perverted it to force cryptolocker software on computers and is spamming it all over the globe.

How did they get their hands on it?  That's the subject of much debate. Many are pointing to the "all Russians, all the time" narrative run by many in the so-called "security industry" (including some who have been caught lying in the past) along with half the left-leaning idiocracy parade that makes up most of the mainstream media punditry.

A more-plausible explanation is that it was an inside job, although in reality it doesn't matter because the entire point is that no matter how good you are someone's equal or better and thus whether they work for you or someone else it only takes one such person with their own motives and you're toast.

What we do know is that the "weaponization" of this apparent NSA code took mere hours after the password to the encrypted archive was posted publicly.

There's another key point here though that nobody in the media is talking about and yet it's the key point when it comes to this particular aspect of cybersecurity:

I have also said repeatedly that nobody in their right mind runs "packaged" software, say much less "cloud based" software, for critical system purposes from places like Microsoft or any of the other big vendors.  Why?  Because there are too many damned cooks in the kitchen, too many of them are incompetent and will drop a rat in the stew pot whether on accident or otherwise and too many shortcuts will be taken.

Witness Android and the repeated security problems found in its mediaserver component.  One, two, over all these years, ok.  But no! It seems that every time a new month rolls around there's another one - or six.  Exactly how many years has Google had to rewrite Android and get that horse**** out of there permanently?  Yet they haven't done it, probably never will and you have no way to compel them to do so.

Windows?  Same deal.  I've been raising hell about problems with "security" under Windows since the time of NT 3.51 which dates back to when I ran MCSNet and in fact that, plus it's resource-piggishness and baroque and impossible to audit internal code was why Microsoft's attempt to get me to port my back office systems to it resulted in their entourage being summarily dismissed.  That's roughly 20 years ago now!  Yes, I had an NT 3.51 and then 4.0 system in my building at MCSNet.  One.  It's sole purpose in life was to run Pagemaker to do prepress work (color seps and similar) for hard-copy circulars and similar and it had no access to our internal, mission-critical systems.  Yes, I'm serious.  Why the hell do you need "antivirus" software on a system unless it fundamentally blows big fat ones to start with?

It is absolutely essential that you write your own damn code for serious applications which will screw you if they're compromised, keep it close to the metal so the attack surface is small and can be audited, keep the development group responsible for it small so you can vet all of those people yourself and keep control of it in-house so you can audit and fix it FAST if you find -- or even suspect -- something is going wrong.  And yes, contrary to the howls of protest from all the IT and public company screaming you hear daily on CNBS, at trade shows, in seminars and elsewhere this means you cannot buy any of the "software as service" offers from any vendor ever nor can you use any of the "kit" rapid-development systems pushed by many for any such mission-critical application and be "reasonably safe" because every damn one of those firms and alleged "solutions" has hundreds or even thousands of people, none of whom you can personally vet, who not only wrote the freaking code but in the case of anything in the "cloud" they also have administrative access to the machines!

Violating these rules is why upwards of 50,000 entities have been staring at screens demanding Bitcoin ransoms be paid "or else" including, apparently, systems at both FedEx and England's National Health Service!

This isn't the first lesson on the consequences of American (and in fact world-wide) arrogance when it comes to this subject and I predict it also won't be the last.

Let's hope the next lesson doesn't come in the form of something aimed a bit more-precisely than a shotgun-style blast of cryptolocking extortionware.

And oh by the way, if you're wondering how this thing was contained it was simple dumb luck.  There are a number of organizations, including Microsoft, trying to at least weakly spike the football. Uh uh.  A researcher noted a host address (DNS target) in the malware that was unregistered and he registered it himself in an attempt to track the infection process; he surmised the code would "ping home" there which would give him a nice map of all the systems it got into as it progressed.  What he uncovered by accident was a "stop button" in the code and when he registered the domain and thus the DNS lookup succeeded the malware stopped trying to infect other systems.  The next round of this fun will almost-certainly either have the "stop button" stripped out of it or made far more complex to trigger.

In the meantime if you're a business or government and you are running mission-critical say much less "highly important" software on Windows or similar systems, you have said systems written using any of the so-called "rapid development" toolkit packages out there (there are too many to count these days) or worse you're running said mission-critical systems "in the cloud" on someone's software as a service offering, you are an idiot and when, not if, you get nailed by something like this you deserve it as you've been fairly warned, including by me, with a clear documentary record going back years.

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2017-05-12 11:35 by Karl Denninger
in Technology , 427 references
[Comments enabled]  

Let's dispose of the commonly-spewed horsecrap right up front: There is no such thing as "artificial intelligence" or "machine learning."

What does exist is pattern recognition and the price of doing it well has gone down very rapidly as the cost and power of computing devices has gone down and up, respectively.

Decades ago doing it "well" required mainframes and then only in certain segments -- because it was simply impossible to analyze a larger data set.  AC Nielsen made their business out of analyzing supermarket checkout scanner data.  So did IRI.  Both did it using big iron and they were only looking at specific data from a specific source, which they paid for (frequently by subsidizing the installation of all that hardware in the grocery stores) and then sold back to the suppliers of those stores (food companies like Heinz.)

That was a symbiotic relationship.  The grocery store got helped twice: First with the capital cost for installation of (at the time) extremely expensive checkout line scanners, which allowed them to bust the checker's union and hire people at half their previous salary -- and then again in that the overriding goal of a grocery store is, of course, to sell more groceries.  As such empowering the food suppliers in figuring out what sold and what didn't had no negative impact on the stores and in fact it was to their benefit.  While two potato chip companies fighting over an endcap might be amusing to a store manager it didn't do violence to the store's sales numbers and actually might improve them.

Today running much more complex pattern analysis requires only some server racks full of Xeon processors and SSDs -- a tiny fraction of the cost of a big IBM or Amdahl mainframe for much more capability.

But this belies a far larger problem when it comes to companies like Salesforce, Amazon and others: Essentially no firm, even the behemoths like Amazon and Salesforce, have enough data of their own to provide the enormous data sets that lead to better and better pattern recognition.  In fact companies like Salesforce have, for all intents and purposes, no data of their own upon which to apply said algorithms at all!


To put it in simple terms: There is no symbiotic relationship, as will become clear in a moment.  In fact being a part of and plugged into these systems is actually likely to screw you as a company.

What does IBM's "Watson", for example, have to suck up to continue to process language at an ever-more accurate level?  Lots of language -- all of which has to come from somewhere.  With language it's pretty easy to come up with a huge data set on an ever-increasing basis that nobody actually owns, because speech is all around us all the time.

There are exceptions.  Visa, Master Card, Discover and American Express, for example, have very large and high-quality data sets to detect fraud from which they own because between those four they basically own the market.  Their volume is so high that they need nobody else's data to make good decisions nor do they have to share any of what they have.

But few companies -- even huge ones like Amazon -- have such a luxury.

So where do you think all these data sets come from that the "machine learning" touts are talking about?

I'll give you one place and in fact arguably the biggest placeAll the ad networks your computer is "accidentally" connected to.

Let me point out just one example: Fox News' web site, if I look at it critically, tries to transmit data to 30 different connected networks when I simply look at the top page.  And that's with transmission blocked.  With it unblocked it literally tries to connect data to over 100 different places on the Internet because each of the 30 passes on data to others.

This is not unusual.  In fact it's not only common it's universal!

So where do Salesforce and Amazon, never mind all these other sites, get their data sets?

From you, short -- both from when you contemplate buying something and when you actually buy something.

That shouldn't shock anyone because it's what data analysis is all about.

That sounds ok but in fact it's a huge problem for these "analysis" companies and their customers: Most if not all of that data winds up being massaged and then given back to others including their customer's competitors!

Essentially nobody has figured this out yet, but they eventually will.  Where do you think all those ads come from that target something you just looked at or bought somewhere?  If you didn't buy it on Amazon but was clicking around various other places like B&H Photo and similar how did Amazon get the data?

They got it from a competitor.

Indirectly, in many cases, but that's where it came from.

That sound great for Amazon but it really isn't because the same data is sold to anyone who wants it and that means that Amazon's competitors can and do buy that same data too!

This is true across the spectrum and is the dirty little secret about so-called artificial intelligence.  What is being sold as "AI" is not intelligence at all; it's pattern recognition and to feed it you need extremely large sets that can be crunched.

Since nobody owns that sort of data set on their own with damn few exceptions and none of the purveyors of these "solutions" are those exceptions the data that is going into them includes yours and it winds up being sold to competitors too!

This will eventually find recognition in the marketplace and when it does the paradigm of 100+ competitors to Fox News being given the data on what I read there who will then use it to pick off Fox's customers will run into a "wee problem" from Fox.

You've been sold a bill of goods from the likes of Mark Cuban and others in the tout investment game folks.  The entire concept of broad-based "machine learning" is utter and complete horse**** and so are all of the firms engaged in sustaining themselves on it at exponentially ever-higher valuations.  It is nothing more or less than pattern recognition and in order to have a data set large enough to provide an "advantage" it must inherently take data from other people and sell it on, including to the data source's competitors which inherently damages the very firm who is their client and the firm that provided the data itself!

That's the opposite of symbiosis -- it in fact is parasitic!

When the market recognizes this and the sources revolt against giving their trade secrets away to competing firms while paying for the privilege besides this entire segment of the so-called "Internet craze" will collapse.

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