The Market Ticker
Commentary on The Capital Markets

Hmmm..... now the game is afoot.

​​​​The investigation into the intrusion methods described in the document and the sophisticated attacks that Gemalto detected in 2010 and 2011 give us reasonable grounds to believe that an operation by NSA and GCHQ probably happened

The attacks against Gemalto only breached its office networks and could not have resulted in a massive theft of SIM encryption keys.

So Gemalto believes.

Of course the best hacks are the ones the target does not detect.  Those are of course also the most-dangerous, for all the obvious reasons.

The problem with simply believing Gemalto is that if they were hacked and their SIM key database was stolen this is an existential threat to the future of the company.  It only gets worse if they were hacked and don't know about it.

On the other hand, Snowden -- and Russia -- have plenty of reasons to overstate claims that cannot be refuted as well!

So what should we take from this?

From my point of view, it's simple: It is utterly outrageous and inexcusable, irrespective of the context, for national security-related spy agencies, or any "law enforcement" agency of any sort, to hack into private companies that are not the target of an actual investigation and thus are not subject to a warrant.

There are no exceptions to this.  If we make those exceptions then when the Chinese hack our companies and steal their data we have no right to bitch because we are doing the same thing.  The ostensible and claimed "purpose" of said hacking is immaterial to the fact that once the data has been obtained it can and will be used.

Using undercover means to investigate a target suspected of an actual violation of the law, under court supervision via the warrant process, is fine.  But in cases like this there is no allegation that Gemalto was involved in anything related to law-breaking and as a consequence such an action is utterly indefensible irrespective of the claimed purpose.

I have often written in these pages excoriating our tolerance of Chinese hacking into our corporate databases and personal data stored on various servers, an endemic problem that our government refuses to address via trade and diplomatic sanction.

The problem is that we have no right to complain as long as we're doing the same thing -- and as a result we must stop this crap right here and now.

View this entry with comments (registration required to post)
 

Here we go again....

The three major democratic advanced economies—the eurozone, Japan and the U.S.—continue to experience significant economic challenges. The eurozone is weak and vulnerable; Japan has been in recession again; and while recent data have been better, the American recovery is still slow by historical standards, with stagnant median real wages and a labor market that is weaker than the official unemployment rate indicates.

The particulars of these economic challenges differ, but in each region one thing is constant: endless focus by the media, analysts and investors on the yellow-brick road that leads to central banks. Will the European Central Bank’s quantitative-easing program have major impact? How will the Bank of Japan proceed? When will the Federal Reserve raise interest rates?

Uh huh.  Robert goes on to talk about, of course, that government ought to be spending money (it doesn't have.)  Specifics?  Sure, Robert's got those!

The greater these risks are, the more imperative it is that elected officials do what is needed for a successful economy. In the U.S., that agenda should include a sound and well-constructed fiscal regime, robust public investment, and structural change in areas like immigration, education, trade liberalization and much else. The fiscal regime should consist of upfront job-creating infrastructure spending, enacted simultaneously with somewhat deferred structural fiscal-discipline measures on the spending and revenue sides. And sequestration should be canceled.

Nonsense.

The entire reason we have a bubble machine -- a serial one at that -- in all the advanced economies is because that structure is necessary in order to run fiscal deficits.  This is an act of fraud upon the public; the claim that one can have that which one cannot or will not pay for with current income (in this case, taxes.)

This would be ok if the spending was merely pulled forward and then not undertaken later -- in other words, if you borrowed say, $100 billion and then paid it off.

However, that never happens.  It has never happened in the history of the United States in over 100 years.  It has not happened here, it has not happened in Japan, and it has not happened in Europe.  That's the developed, industrial world.

I recently had a very long conversation with yet another person who was utterly convinced that The Fed was what wrong with the world and Ron Paul (never mind a gold standard) was right.  I may have disabused him of this after quite some time but the fact is that whether I did or not he was and is wrong.

Federal Reserve policies, and commercial bank credit emission (which incidentally is how we get bubbles, NOT The Fed) all come from the fact that the government demands the right to emit credit whenever they want in whatever quantity they want.  This is done through the banks since they buy the Treasuries; ergo, the structure must be in place to emit unbacked credit!

Stop that, and there is no need to allow the banks to have that structure.  Stop that, and there is no inflation.  Stop that, and there are no more bubbles.  There are still good ideas and bad, but there is no more government of whatever you want to "give", there is only government that the people will consent to pay for via taxation.

One Dollar of Capital resolves all of this.  But that's an impossible mandate so long as the government demands the ability to cheat.

You see, the problem doesn't lie in the Eccles Building, just a few blocks from the White House and Washington Monument.  It lies on the other end of the Washington Mall dead-center, the place where of 535 lying sacks of crap meet on a regular basis.

If you want to resolve any of these problems you need to fix one thing first and foremost -- you must end deficit spending and run at least a small but persistent cash-basis surplus.  That is, the "Debt to the Penny" figures must be decreasing on an annual basis, not increasing.

Then -- and only then -- can you address the structural problems that are (a) destroying the middle class in this country and (b) creating repeated bubbles in various parts of the economy.

Without ceasing the predicate act that requires the bubble structure that is currently present you simply cannot get rid of it.  No, not even issuing "greenbacks" would help; in fact, doing that would make the problem worse.

View this entry with comments (registration required to post)
 

for enterprise users, at least.

10.3.2, next update coming, appears to have full S/MIME support.

Unconfirmed at this moment, but it appears so.

Sorry Android.....

View this entry with comments (registration required to post)
 

You get what you deserve America.

You will get it.  Long, hard, and dry.

Reed Hastings' Netflix has largely driven the hysteria about Net Neutrality through one of the most-common means of misleading the public that the government itself is known to use all the time: Create a crisis, then screw you in "solving" it.

Netflix relies on very low-latency, high-speed data delivery over long periods of time to deliver its content to you.  This is an entirely different business model than what has powered the Internet thus far.  It is not an impossible business model, but it is a far more-expensive one to provide than the model used to date.

When you surf a web page the load is taken when the page loads, then there is little or no load while you read it.  You click something, the process repeats.

But both video delivery "on-demand" and unsolicited advertising delivery, particularly video ads, don't work under that model.  The build requirements for that sort of operating model are far more expensive because instead of building for average load plus a margin you now must build for peak bitrate and be able to deliver that with predictable and small degrees of latency -- a peak bitrate which may well be 2, 3, 5 or even 10x higher than average!

Note that unsolicited video ads are effectively spam -- those that play on load, rather than on click, are particularly annoying in that they interrupt whatever you're actually trying to do -- and this is even worse when these ads involve soundtracks that autoplay along with them.

Netflix could have built out the infrastructure to deliver all those bits in a low-latency, high-speed form on their own.  But that would have been extremely expensive, and in turn that would have made their $8/month "all you can eat" model impossible.  So they didn't -- they shoved it off on other people.

They're not the only ones.  Facebook plays video content on-load, rather than on-demand, as well -- particularly if it's in the viewport.  And again, that takes Facebook's data requirement for "good" delivery upward.  Someone has to pay for that and the entire point of this campaign is to make sure it's you, and not Facebook, that pays.

Note again that Facebook charges advertisers for these ads, and now you will get saddled with the cost of delivering them, whether you want them or not.

It is manifestly unjust, and indeed outrageous, to allow this sort of cost-shifting to go on.  It may be legal but it should be considered fraud.  This is the false narrative being sold to you to support "Net Neutrality", and it's going to ram you right up the chute in the form of higher costs for your Internet connections whether you want to use Netflix and Facebook or not.

When, not if, you get rammed by this in your wallet I don't want to hear the complaints.  You are entitled in this country to be stupid and buy into the false narratives used by people who simply want to spam you and shift their costs onto you, but if you do and not only allow but pressure the government to "act" to confirm and cement these sorts of outrageous practices you had better not complain about the outcome later on because you begged for and in fact demanded the reaming you're going to get.

View this entry with comments (registration required to post)
 

LinkedIn has seen quite a run of late in its stock price.

I killed my profile there a couple of years ago because the company was famous for spamming me, literally on a daily basis, with dozens of so-called "I want to add you to my professional network" invites.

Virtually every single one of these was identical down to the last letter.

In other words, exactly none of these were actually people asking me to be part of their network.

No, they were spam.  They were LinkedIn scanning someone's email address book and, finding my email address in there, sending me said "invitation" unsolicited.

How does LinkedIn get around the anti-spamming laws?  You "opted in" when you created an account.

But here's the thing -- all of these so-called "connections" that LinkedIn claims they have "found" for you which forms the entire predicate on which the firm has any value whatsoever, are false.

I might have exchanged emails with 30 or 50% of these people over the last few years, but I can literally count the number of them that I actually know in a contemporary professional context on the fingers of my hands.

It gets worse -- once you have "confirmed" such a person as a member of your "network" they then can "endorse" you for various skills and experience.  And you will be endorsed for same -- by people with utterly no professional basis to make such a claim.

Why do I bring this up now?  Beyond the outrageous ramp-job in LinkedIn's share price I recently got one of these "invitations" even though I didn't have a LinkedIn profile from someone who I really do know.  I thought perhaps that was "real", so I turned a profile back on -- and within hours I got dozens of additional "add me to my network" requests.

Folks, you gotta be kidding me.  And let me be quite clear -- any so-called "generic" invitation from people in general will get ash-canned immediately.  I have no purpose in trying to establish a brag list of people who I allegedly "am networked with" via this or any other form of "social media."

Further, if you got (or receive in the future) such an "invitation" from me you didn't get it as a result of my letting LinkedIn have access to my address book because I not only didn't give it to them they can't get it via third parties as there is only one place it resides -- on my servers, resting on encrypted storage.  I assure you I also did not go through a list of "potential" connections and click the "invite" button either; if you ever see such an invitation from me it will be unmistakably customized so you know I personally sent it.

This is a company selling at 15x sales and over 60 times projected forward earnings -- and which has a current posted EPS loss, all built on the predicate of spamming people (for real -- these are unsolicited emails both from the standpoint of the recipient and alleged sender) to "build their professional networks."

But there's no bubble in Nasdaq and the market in general, they say.

Uh huh.

View this entry with comments (registration required to post)
 

Main Navigation
Full-Text Search & Archives
Archive Access
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.