The world has simply shifted private debt to the public balance sheet

October 21, 2015: Excerpted from Artemis Capital Management letter to investors

The arms race of devaluation is not free and has come at the cost of massive global debt expansion. There is no precedent in financial history for a robust economic recovery absent either debt reduction or rampant inflation. We never deleveraged, in fact we just doubled down. According to a recent McKinsey study the world has reached $200 trillion of debt in 2014 (286% of global GDP), which is a staggering 40% increase from 2007 levels (+$57 trillion). In China, debt has grown four times faster than GDP since 2007, and half of that debt is linked to their property market. The world has simply shifted private debt to the public balance sheet.

20151021_debt1_0

The private risk transfer to the public balance sheet can also be seen in the evolution of credit default swap pricing since 2007. Notice the sharp divergence between global sovereign CDS (red) and financial corporate CDS (blue) starting in 2013. The next major global crash will likely be driven by unhealthy sovereign credit rather than corporate credit. The next Lehman moment will be the financial collapse of a major developed country instead of a bank.

ddebt2_0

There are those who point to aggressive central banking of the late-1930s as the model for de-leveraging post-depression but this argument is highly flawed.

We didn’t financially engineer our way out of the Great Depression – we won a World War.

It’s extremely helpful in the de-leveraging process if you are the only capitalist industrial power left in the world untouched by utter and complete destruction. De-leveraging from the Great Depression had as much to do with the blood, sweat, and tears of American soldiers, the development of nuclear weapons, and the fact we were an ocean removed from the battlefield on both sides, as anything related to fiscal and monetary policy from the era.

I don’t think some investors are being radically honest when they omit this brutal truth in their analysis of late-1930s as model to argue for more quantitative easing. More quantitative easing is a great thing if you run a large risk parity fund but it will not help the American middle class.

Artemis Capital Management / Zero Hedge

Our laws and policies are more racist than the officers who enforce them

Police Killings of Blacks: Here Is What the Data Say

By SENDHIL MULLAINATHAN
NY Times : October 16, 2015

Tamir Rice. Eric Garner. Walter Scott. Michael Brown. Each killing raises a disturbing question: Would any of these people have been killed by police officers if they had been white?

I have no special insight into the psychology of police officers or into the complicated forensics involved in such cases. Answering this question in any single situation can be difficult and divisive. Two outside experts this month concluded, for example, that the shooting of Tamir Rice, a 12-year-old boy in Cleveland who was carrying a toy gun, was a “reasonable” if tragic response. That will hardly be the last word on the subject.As an economist who has studied racial discrimination, I’ve begun to look at these deaths from a different angle. There is ample statistical evidence of large and persistent racial bias in other areas — from labor markets to online retail markets. So I expected that police prejudice would be a major factor in accounting for the killings of African-Americans. But when I looked at the numbers, that’s not exactly what I found.

I’m not saying that the police in these specific cases are free of racial bias. I can’t answer that question. But what the data does suggest is that eliminating the biases of all police officers would do little to materially reduce the total number of African-American killings. Police bias may well be a significant problem, but in accounting for why some of these encounters turn into killings, it is swamped by other, bigger problems that plague our society, our economy and our criminal justice system.

To understand how this can be, let us start with the statistics on police killings. According to the F.B.I.’s Supplementary Homicide Report, 31.8 percent of people shot by the police were African-American, a proportion more than two and a half times the 13.2 percent of African-Americans in the general population. While this data may be imperfect, other sources in individual states or cities, such as in California or New York City, show very similar patterns.

The data is unequivocal. Police killings are a race problem: African-Americans are being killed disproportionately and by a wide margin. And police bias may be responsible. But this data does not prove that biased police officers are more likely to shoot blacks in any given encounter.

Instead, there is another possibility: It is simply that — for reasons that may well include police bias — African-Americans have a very large number of encounters with police officers. Every police encounter contains a risk: The officer might be poorly trained, might act with malice or simply make a mistake, and civilians might do something that is perceived as a threat. The omnipresence of guns exaggerates all these risks.

Such risks exist for people of any race — after all, many people killed by police officers were not black. But having more encounters with police officers, even with officers entirely free of racial bias, can create a greater risk of a fatal shooting.

Arrest data lets us measure this possibility. For the entire country, 28.9 percent of arrestees were African-American. This number is not very different from the 31.8 percent of police-shooting victims who were African-Americans. If police discrimination were a big factor in the actual killings, we would have expected a larger gap between the arrest rate and the police-killing rate.

This in turn suggests that removing police racial bias will have little effect on the killing rate. Suppose each arrest creates an equal risk of shooting for both African-Americans and whites. In that case, with the current arrest rate, 28.9 percent of all those killed by police officers would still be African-American. This is only slightly smaller than the 31.8 percent of killings we actually see, and it is much greater than the 13.2 percent level of African-Americans in the overall population.

If the major problem is then that African-Americans have so many more encounters with police, we must ask why. Of course, with this as well, police prejudice may be playing a role. After all, police officers decide whom to stop or arrest.

But this is too large a problem to pin on individual officers.

First, the police are at least in part guided by suspect descriptions. And the descriptions provided by victims already show a large racial gap: Nearly 30 percent of reported offenders were black. So if the police simply stopped suspects at a rate matching these descriptions, African-Americans would be encountering police at a rate close to both the arrest and the killing rates.

Second, the choice of where to police is mostly not up to individual officers. And police officers tend to be most active in poor neighborhoods, and African-Americans disproportionately live in poverty.

In fact, the deeper you look, the more it appears that the race problem revealed by the statistics reflects a larger problem: the structure of our society, our laws and policies.

The war on drugs illustrates this kind of racial bias. African-Americans are only slightly more likely to use drugs than whites. Yet, they are more than twice as likely to be arrested on drug-related charges. One reason is that drug sellers are being targeted more heavily than users. With fewer job options, low-income African-Americans have been disproportionately represented in the ranks of drug sellers. In addition, the drug laws penalize crack cocaine — a drug more likely to be used by African-Americans — far more harshly than powder cocaine.

Laws and policies need not explicitly discriminate to effectively discriminate. As Anatole France wrote centuries ago, “In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.”

(read the full article at NY Times)

As world seeks to eradicate polio, Laos suffers vaccine-linked case

Reuters : October 12, 2015

Laos has suffered a case of vaccine-derived polio, the World Health Organization said on Monday, in a new setback to a global plan to eradicate the crippling disease after the virus resurfaced in Ukraine and Mali.

The WHO said an 8-year-old boy died of the disease on Sept. 11, and genetic sequencing suggested the virus strain has been circulating in the area of Bolikhamxay province, which has low immunisation rates, for more than two years.

There is no cure for polio, which attacks the nervous system and can cause irreversible paralysis within hours of infection. But a global vaccination campaign has all but beaten the wild polio virus, with only Pakistan and Afghanistan reporting cases of wild polio virus infection this year.

Specialists have warned that vaccine-derived cases – such as this one in Laos and previous ones in Ukraine and Mali – could hamper progress towards global eradication.

The WHO stressed that “ending polio for good requires eliminating both wild and vaccine-derived polio”.
(full article at reuters)

Ten ways the TPP gives too much power to foreign investors

Gus Van Harten
rabble.ca: September 28, 2015

One of the most controversial parts of trade and investment agreements like the Trans-Pacific Partnership (TPP) is the special status they give to foreign investors.

Foreign investor lawsuits under these agreements have exploded, growing from a few cases in the late 1990s to more than 600 worldwide today.

This explosion has happened partly because the lawsuits are extremely powerful and lucrative for companies and their lawyers, compared to other kinds of lawsuits against countries. They are so powerful, I would call them super-sized.

Thus, under the TPP, U.S., Japanese, Malaysian, and other foreign companies would get a new power to sidestep Canada’s legal system by bringing a TPP lawsuit against Canada.

Or, they could go to the courts in Canada to attempt to strike down a decision, while using the TPP to seek public compensation not otherwise available in Canadian law.

By the same token, the lawyers sitting as arbitrators under the TPP would have immense power to condemn Canada by ordering compensation for foreign investors.

The arbitrators’ awards of compensation do not have a monetary ceiling. They are available not only for the amounts actually invested in an economy but also for lost future profits. They are enforceable against a losing sovereign’s commercial assets around the world, making the awards more enforceable than any court judgment against a sovereign.

The arbitrators’ power — and by extension foreign companies — can get hidden or drowned in legal details, especially by lawyers who promote investment treaties.

I highlight 10 points below that give a sense of how far this power would go, using the TPP as an example.

1. After a TPP lawsuit is filed by a foreign investor, the arbitrators can review almost anything Canada has done on behalf of its people. There would be complex exceptions in the TPP that safeguard aspects of Canada’s sovereignty, but generally the arbitrators’ power is very broad.

2. Foreign investors would be able to challenge — and TPP arbitrators could then review — a decision by a government, a legislature, or a court. The usual principles of Canadian law requiring such disputes to be decided in a Canadian court do not apply.

3. Foreign investor lawsuits are not limited to the federal government alone. The decisions of a province or a territory or by a municipal or First Nation council can also be challenged. In international law, all bodies that exercise public powers are part of Canada as a unified entity.

4. TPP arbitrators would operate at a different level from Canadian courts. A decision by a court is a sovereign act of Canada. Thus, all court decisions would be subject to final review by TPP arbitrators, if challenged by a foreign investor.

5. TPP arbitrators would not be limited by Canada’s constitution or other parts of Canadian law. They would be subject to the TPP and relevant rules of international law.

6. To a far greater degree than other treaties — on human rights, anti-corruption, or the environment, for example — trade deals like the TPP lay out elaborate rights for private parties (here, foreign investors only) in clear, binding language and they make those rights highly enforceable.

7. Treaties like the TPP describe foreign investors’ rights in vague language, which arbitrators have often interpreted broadly as a basis for compensating a foreign investor.

8. TPP arbitrators would largely be a power unto themselves. Their awards are subject to little or no review in any court. In some cases, they can be reviewed on limited grounds by a panel of other arbitrators chosen by the president of the World Bank in Washington, D.C. In other cases, they can be reviewed on limited grounds in a court, albeit typically in a place chosen by the arbitrators themselves.

9. If Canada did not pay a TPP award, a foreign investor could take the award to other countries that have agreed to enforce arbitration awards in other treaties. The most important of these other treaties — the New York Convention of 1958 and the Washington Convention of 1965 — were originally created to back up arbitrations under contracts, not trade deals.

10. TPP arbitrators would have the power to order countries to pay backward-looking compensation to foreign investors. That is, the compensation against a country is calculated from the time of the country’s original decision that is later found to have violated the treaty. It is not calculated from the time of the arbitrators’ decision itself. So, countries can rack up massive liability without knowing if the original decision actually violated the treaty. This can give powerful leverage to large corporations with deep enough pockets to fund a TPP lawsuit.

Since the early 1990s, foreign investor lawsuits have led to billions of dollars in awards against countries.

On the other hand, a foreign company could not itself be sued and ordered to pay Canada under the TPP. The trade and investment treaties are structured one way. They give exceptionally powerful rights to foreign investors without any actionable responsibilities.

(read the full article at rabble.ca)

Selling Canada out, one deal at a time

Gus Van Harten
Toronto Star : September 30, 2015

Since winning his majority, Stephen Harper’s government has signed or finalized 23 new trade or investment deals.

The right trade agreements can create opportunities for Canada. But the Harper government has seemed more interested in getting lots of deals than in making sure each is good for Canada’s economy.

Of all the deals facing Canada, three are by far the most important. They are the Foreign Investment Promotion and Protection Agreement (FIPA) with China, the Comprehensive Economic and Trade Agreement (CETA) with Europe, and the U.S.-led trans-Pacific Partnership (TPP).

Considering the financial transfers they tend to create, a more precise name for these deals might be: A Locked-In Agreement to Transfer Public Money to Large Companies, Lawyers and Arbitrators.

The deal we know the most about is the FIPA with China. Of the big three, it is the only one that has been finalized.

Some details of the FIPA will illustrate my point that the government has been behaving like a salesperson who gets lots of orders by selling at a loss. For example:

1. The Harper government gave Chinese investors “market access” to Canada — meaning a right to buy what they want in our economy — without getting the same for Canadian investors in China.

That is the most lopsided concession I had ever seen by Canada or, for that matter, any other country across hundreds of similar agreements.

2. When he announced the FIPA, Harper said that a FIPA “ensures non-discriminatory treatment” for foreign investors. But the actual terms of the FIPA (Article 8(2)(a), to be exact) let China keep all its existing laws, policies, or practices that discriminate against Canadian investors.

No one could fact-check Harper’s misleading claim at the time because the text was kept secret for about eight months after he made it.

3. In the FIPA, the Harper government exposed Canada to potentially massive financial liabilities due to the generous protections it gives to foreign companies, including a right to seek uncapped amounts of compensation from governments directly before international tribunals.

The Mulroney government gave similar rights to U.S. companies in Canada under NAFTA. But NAFTA was concluded before anyone could predict the hundreds of costly claims brought by foreign companies against countries in the last 15 years.

Having looked closely at the FIPA, I also see cause for concern in the CETA and the TPP.

Harper was clearly desperate to finalize the CETA before the election. Several times he has announced it with fanfare. Yet, despite various concessions, he could not get it done in time. This is mostly because the Europeans looked closely at the deal’s generous protections for foreign investors and asked about the consequences for domestic courts, democracy, and public budgets.

There has been a similar debate in the United States over the TPP.

Worse, Harper is poised to compromise Canada’s dairy and auto industries in a bid to finish the TPP negotiations before the election. The Americans seem to have sensed his political vulnerability and played him to Canada’s expense.

(read the full article at Toronto Star)

The Mind of Mr. Putin

Patrick Buchanan
LewRockwell.com : October 2, 2015

So Vladimir Putin in his U.N. address summarized his indictment of a U.S. foreign policy that has produced a series of disasters in the Middle East (that we did not need the Russian leader to describe for us).

Fourteen years after we invaded Afghanistan, Afghan troops are once again fighting Taliban forces for control of Kunduz. Only 10,000 U.S. troops still in that ravaged country prevent the Taliban’s triumphal return to power.

A dozen years after George W. Bush invaded Iraq, ISIS occupies its second city, Mosul, controls its largest province, Anbar, and holds Anbar’s capital, Ramadi, as Baghdad turns away from us — to Tehran.

The cost to Iraqis of their “liberation”? A hundred thousand dead, half a million widows and fatherless children, millions gone from the country and, still, unending war.

How has Libya fared since we “liberated” that land? A failed state, it is torn apart by a civil war between an Islamist “Libya Dawn” in Tripoli and a Tobruk regime backed by Egypt’s dictator.

Then there is Yemen. Since March, when Houthi rebels chased a Saudi sock puppet from power, Riyadh, backed by U.S. ordinance and intel, has been bombing that poorest of nations in the Arab world.

Five thousand are dead and 25,000 wounded since March. And as the 25 million Yemeni depend on imports for food, which have been largely cut off, what is happening is described by one U.N. official as a “humanitarian catastrophe.”

“Yemen after five months looks like Syria after five years,” said the international head of the Red Cross on his return.

On Monday, the wedding party of a Houthi fighter was struck by air-launched missiles with 130 guests dead. Did we help to produce that?

What does Putin see as the ideological root of these disasters?

“After the end of the Cold War, a single center of domination emerged in the world, and then those who found themselves at the top of the pyramid were tempted to think they were strong and exceptional, they knew better.”

Then, adopting policies “based on self-conceit and belief in one’s exceptionality and impunity,” this “single center of domination,” the United States, began to export “so-called democratic” revolutions.

How did it all turn out? Says Putin:

An aggressive foreign interference has resulted in a brazen destruction of national institutions. … Instead of the triumph of democracy and progress, we got violence, poverty and social disaster.

 

Nobody cares a bit about human rights, including the right to life.”

Is Putin wrong in his depiction of what happened to the Middle East after we plunged in? Or does his summary of what American interventions have wrought echo the warnings made against them for years by American dissenters?

Putin concept of “state sovereignty” is this: “We are all different, and we should respect that. No one has to conform to a single development model that someone has once and for all recognized as the right one.”

The Soviet Union tried that way, said Putin, and failed. Now the Americans are trying the same thing, and they will reach the same end.

Unlike most U.N. speeches, Putin’s merits study. For he not only identifies the U.S. mindset that helped to produce the new world disorder, he identifies a primary cause of the emerging second Cold War.

To Putin, the West’s exploitation of its Cold War victory to move NATO onto Russia’s doorstep caused the visceral Russian recoil. The U.S.-backed coup in Ukraine that overthrew the elected pro-Russian government led straight to the violent reaction in the pro-Russian Donbas.

What Putin seems to be saying to us is this:

If America’s elites continue to assert their right to intervene in the internal affairs of nations, to make them conform to a U.S. ideal of what is a good society and legitimate government, then we are headed for endless conflict. And, one day, this will inevitably result in war, as more and more nations resist America’s moral imperialism.

Nations have a right to be themselves, Putin is saying.

They have the right to reflect in their institutions their own histories, beliefs, values and traditions, even if that results in what Americans regard as illiberal democracies or authoritarian capitalism or even Muslim theocracies.

There was a time, not so long ago, when Americans had no problem with this, when Americans accepted a diversity of regimes abroad. Indeed, a belief in nonintervention abroad was once the very cornerstone of American foreign policy.

(read full article at Lew Rockwell)

Radiation Impact Studies – Chernobyl and Fukushima

Robert Hunziker
Counterpunch : September 23, 2015

Some nuclear advocates suggest that wildlife thrives in the highly-radioactive Chernobyl Exclusion Zone, animals like it, and not only that, a little radiation for anybody and everybody is harmless and maybe good, not bad. This may seem like a senseless argument to tackle were it not for the persistence of positive-plus commentary by nuke lovers. The public domain deserves better, more studied, more crucial answers.

Fortunately, as well as unfortunately, the world has two major real life archetypes of radiation’s impact on the ecosystem: Chernobyl and Fukushima. Chernobyl is a sealed-off 30klm restricted zone for the past 30 years because of high radiation levels. Whereas, PM Abe’s government in Japan has already started returning people to formerly restricted zones surrounding the ongoing Fukushima nuclear meltdown.

The short answer to the supposition that a “little dab of radiation is A-Okay” may be suggested in the title of a Washington Blog d/d March 12, 2014 in an interview of Dr. Timothy Mousseau, the world-renowned expert on radiation effects on living organisms. The hard answer is included further on in this article.

Dr. Mousseau is former Program Director at the National Science Foundation in Population Biology, Panelist for the National Academy of Sciences’ Panels on Analysis of Cancer Risks in Populations Near Nuclear Facilities and GAO Panel on Health and Environmental Effects from Tritium Leaks at Nuclear Power Plants, and a biology professor – and former Dean of the Graduate School, and Chair of the Graduate Program in Ecology – at the University of South Carolina.

The title of the Washington Blog interview is:

Chernobyl and Fukushima Studies Show that Radiation Reduces Animal and Plant Numbers, Fertility, Brain Size and Diversity… and Increases Deformities and Abnormalities.

Dr. Mousseau made many trips to Chernobyl and Fukushima, making 896 inventories at Chernobyl and 1,100 biotic inventories in Fukushima. His mission was to test the effects of radiation on plants and animals. The title of his interview (above) handily serves to answer the question of whether radiation is positive for animals and plants. Without itemizing reams and reams of study data, the short answer is: Absolutely not! It is not positive for animals and plants, period.

Moreover, low doses of radiation aka: “radiation hormesis” is not good for humans, as advocated by certain energy-related outlets. Data supporting their theory is extremely shaky and more to the point, flaky.

Furthermore, according to the Cambridge Philosophical Society’s journal Biological Reviews, including reported results by wide-ranging analyses of 46 peer-reviewed studies published over 40 years, low-level natural background radiation was found to have small, but highly statistically significant, negative effects on DNA and several measures of good health.

Dr. Mousseau with co-author Anders Møller of the University of Paris-Sud examined more that 5,000 papers involving background radiation in order to narrow their findings to 46 peer-reviewed studies. These studies examined plants and animals with a large preponderance of human subjects.

The scientists reported significant negative effects in a range of categories, including immunology, physiology, mutation and disease occurrence. The frequency of negative effects was beyond that of random chance.

“There is no threshold below which there are no effects of radiation,” Ibid.

“With the levels of contamination that we have seen as a result of nuclear power plants, especially in the past, and even as a result of Chernobyl and Fukushima and related accidents, there’s an attempt in the industry to downplay the doses that the populations are getting, because maybe it’s only one or two times beyond what is thought to be the natural background level…. But they’re assuming the natural background levels are fine. And the truth is, if we see effects at these low levels, then we have to be thinking differently about how we develop regulations for exposures, and especially intentional exposures to populations, like the emissions from nuclear power plants….” Ibid.

Results of Major Landmark Study on Low Dose Radiation (July 2015)

A consortium of researchers coordinated by the International Agency for Research on Cancer (IARC) in Lyon, France, examined causes of death in a study of more than 300,000 nuclear-industry workers in France, the United States and the United Kingdom, all of whom wore dosimeter badges, Researchers Pin Down Risks of Low-Dose Radiation, Nature, July 8, 2015.

The workers received on average just 1.1 millisieverts (mSv) per year above background radiation, which itself is about 2–3 mSv per year from sources such as cosmic rays and radon. The study confirmed that the risk of leukemia does rise proportionately with higher doses, but also showed that this linear relationship is present at extremely low levels of radiation.

The study effectively “scuppers the popular idea that there might be a threshold dose below which radiation is harmless,” Ibid.

Even so, the significant issue regarding radiation exposure for humans is that it is a “silent destroyer” that takes years and only manifests once damage has occurred, for example, 200 American sailors of the USS Reagan have filed a lawsuit against TEPCO, et al because of radiation-related illnesses, like leukemia, only four years after radiation exposure from Fukushima.

Japan Moving People Back to Fukushima Restricted Zones

Japan’s Abe government has started moving people back into former restricted zones surrounding the Fukushima Daiichi Nuclear Power Station even though it is an on-going major nuclear meltdown that is totally out of control.

Accordingly, Greenpeace Japan conducted a radiation survey and sampling program in Iitate, a village in Fukushima Prefecture. Even after decontamination, radiation dose rates measured ten times (10xs) the maximum allowed to the general public.

(read the full article at Counterpunch)

Report says 70 to 100 percent of nuclear fuel in Fukushima No. 2 has melted

Fukushima reactor could have suffered total meltdown – report

RT : September 26, 2015

Fukushima’s reactor No.2 could have suffered a complete meltdown according to Japanese researchers. They have been monitoring the Daiichi nuclear power plant since April, but say they have found few signs of nuclear fuel at the reactor’s core.

The scientists from Nagoya University had been using a device that uses elementary particles, which are called muons. These are used to give a better picture of the inside of the reactor as the levels of radioactivity at the core mean it is impossible for any human to go anywhere near it.

However, the results have not been promising. The study shows very few signs of any nuclear fuel in reactor No. 2. This is in sharp contrast to reactor No.5, where the fuel is clearly visible at the core, the Japanese broadcaster NHK reports.

The team believes that 70 to 100 percent of the fuel has melted, though they did add that further research was needed to see whether any fuel had managed to penetrate the reactor

A report in May by the Tokyo Electric Power Company (TEPCO), which is the plant’s operator, said that a failure in reactor No.2’s pressure relief systems was one of the causes of the disaster. The team used a robot, which ventured into the building and measured radiation levels at various places, while also studying how much leakage had occurred from the control systems.

TEPCO has used 16 robots to explore the crippled plant to date, from military models to radiation-resistant multi-segmented snake-like devices that can fit through a small pipe.

However, even the toughest models are having trouble weathering the deadly radiation levels: as one robot sent into reactor No.1 broke down three hours into its planned 10-hour foray.

Despite TEPCO’s best efforts, the company has been accused of a number of mishaps and a lack of proper contingency measures to deal with the cleanup operation, after the power plant suffered a meltdown, following an earthquake and subsequent tsunami in 2011.

Recent flooding caused by Tropical Typhoon Etau swept 82 bags, believed to contain contaminated materials that had been collected from the crippled site, out to sea.

“On September 9th and 11th, due to typhoon no.18 (Etau), heavy rain caused Fukushima Daiichi K drainage rainwater to overflow to the sea,” TEPCO said in a statement, adding that the samples taken “show safe, low levels” of radiation.

“From the sampling result of the 9th, TEPCO concluded that slightly tainted rainwater had overflowed to the sea; however, the new sampling measurement results show no impact to the ocean,” it continued.

A recent study by the University of Southern California said the Fukushima disaster could have been prevented. One of the main faults cited was the decision to install critical backup generators in low-lying areas, as this was the first place the 2011 tsunami would strike, following the massive earthquake.

(read the full article atrt)

New Snowden Leak Confirms UK Spies Track Web Users’ Online Identities

From Radio to Porn, UK Spies Track Web Users’ Online Identities

Ryan Gallagher
The Intercept : September 25, 2015

There was a simple aim at the heart of the top-secret program: Record the website browsing habits of “every visible user on the Internet.”

Before long, billions of digital records about ordinary people’s online activities were being stored every day. Among them were details cataloging visits to porn, social media and news websites, search engines, chat forums, and blogs.

The mass surveillance operation — code-named KARMA POLICE — was launched by British spies about seven years ago without any public debate or scrutiny. It was just one part of a giant global Internet spying apparatus built by the United Kingdom’s electronic eavesdropping agency, Government Communications Headquarters, or GCHQ.

The revelations about the scope of the British agency’s surveillance are contained in documents obtained by The Intercept from National Security Agency whistleblower Edward Snowden. Previous reports based on the leaked files have exposed how GCHQ taps into Internet cables to monitor communications on a vast scale, but many details about what happens to the data after it has been vacuumed up have remained unclear.

Amid a renewed push from the U.K. government for more surveillance powers, more than two dozen documents being disclosed today by The Intercept reveal for the first time several major strands of GCHQ’s existing electronic eavesdropping capabilities.

One system builds profiles showing people’s web browsing histories. Another analyzes instant messenger communications, emails, Skype calls, text messages, cell phone locations, and social media interactions. Separate programs were built to keep tabs on “suspicious” Google searches and usage of Google Maps.

The surveillance is underpinned by an opaque legal regime that has authorized GCHQ to sift through huge archives of metadata about the private phone calls, emails and Internet browsing logs of Brits, Americans, and any other citizens — all without a court order or judicial warrant.

Metadata reveals information about a communication — such as the sender and recipient of an email, or the phone numbers someone called and at what time — but not the written content of the message or the audio of the call.

As of 2012, GCHQ was storing about 50 billion metadata records about online communications and Web browsing activity every day, with plans in place to boost capacity to 100 billion daily by the end of that year. The agency, under cover of secrecy, was working to create what it said would soon be the biggest government surveillance system anywhere in the world.

Radio radicalization

The power of KARMA POLICE was illustrated in 2009, when GCHQ launched a top-secret operation to collect intelligence about people using the Internet to listen to radio shows.

The agency used a sample of nearly 7 million metadata records, gathered over a period of three months, to observe the listening habits of more than 200,000 people across 185 countries, including the U.S., the U.K., Ireland, Canada, Mexico, Spain, the Netherlands, France, and Germany.

A summary report detailing the operation shows that one aim of the project was to research “potential misuse” of Internet radio stations to spread radical Islamic ideas.

GCHQ spies from a unit known as the Network Analysis Center compiled a list of the most popular stations that they had identified, most of which had no association with Islam, like France-based Hotmix Radio, which plays pop, rock, funk and hip-hop music.

They zeroed in on any stations found broadcasting recitations from the Quran, such as a popular Iraqi radio station and a station playing sermons from a prominent Egyptian imam named Sheikh Muhammad Jebril. They then used KARMA POLICE to find out more about these stations’ listeners, identifying them as users on Skype, Yahoo, and Facebook.

The summary report says the spies selected one Egypt-based listener for “profiling” and investigated which other websites he had been visiting. Surveillance records revealed the listener had viewed the porn site Redtube, as well as Facebook, Yahoo, YouTube, Google’s blogging platform Blogspot, the photo-sharing site Flickr, a website about Islam, and an Arab advertising site.

GCHQ’s documents indicate that the plans for KARMA POLICE were drawn up between 2007 and 2008. The system was designed to provide the agency with “either (a) a web browsing profile for every visible user on the Internet, or (b) a user profile for every visible website on the Internet.”

The origin of the surveillance system’s name is not discussed in the documents. But KARMA POLICE is also the name of a popular song released in 1997 by the Grammy Award-winning British band Radiohead, suggesting the spies may have been fans.

A verse repeated throughout the hit song includes the lyric, “This is what you’ll get, when you mess with us.”

The Black Hole

GCHQ vacuums up the website browsing histories using “probes” that tap into the international fiber-optic cables that transport Internet traffic across the world.

A huge volume of the Internet data GCHQ collects flows directly into a massive repository named Black Hole, which is at the core of the agency’s online spying operations, storing raw logs of intercepted material before it has been subject to analysis.

Black Hole contains data collected by GCHQ as part of bulk “unselected” surveillance, meaning it is not focused on particular “selected” targets and instead includes troves of data indiscriminately swept up about ordinary people’s online activities. Between August 2007 and March 2009, GCHQ documents say that Black Hole was used to store more than 1.1 trillion “events” — a term the agency uses to refer to metadata records — with about 10 billion new entries added every day.

As of March 2009, the largest slice of data Black Hole held — 41 percent — was about people’s Internet browsing histories. The rest included a combination of email and instant messenger records, details about search engine queries, information about social media activity, logs related to hacking operations, and data on people’s use of tools to browse the Internet anonymously.

Throughout this period, as smartphone sales started to boom, the frequency of people’s Internet use was steadily increasing. In tandem, British spies were working frantically to bolster their spying capabilities, with plans afoot to expand the size of Black Hole and other repositories to handle an avalanche of new data.

By 2010, according to the documents, GCHQ was logging 30 billion metadata records per day. By 2012, collection had increased to 50 billion per day, and work was underway to double capacity to 100 billion. The agency was developing “unprecedented” techniques to perform what it called “population-scale” data mining, monitoring all communications across entire countries in an effort to detect patterns or behaviors deemed suspicious. It was creating what it said would be, by 2013, “the world’s biggest” surveillance engine “to run cyber operations and to access better, more valued data for customers to make a real world difference.”

(read the full article at The Intercept)

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Fukushima Report Dangerously Downplays Ongoing Health Risks

RINF: September 2, 2015

A new report from the International Atomic Energy Agency (IAEA) “downplays” the continuing environmental and health effects of the Fukushima nuclear meltdown while supporting the Japanese government’s agenda to normalize the ongoing disaster, Greenpeace Japan charged on Tuesday.

The Vienna-based IAEA released its final report Monday on the 2011 triple meltdown at the Fukushima No. 1 nuclear power plant. While the agency pointed to numerous failings, including unclear responsibilities among regulators, weaknesses in plant design and in disaster-preparedness, and a “widespread assumption” of safety, it was more circumspect with regard to health concerns.

The Fukushima disaster released vast amounts of radiation, leading to fears that cases of thyroid cancer in children would soar as they did following the Chernobyl disaster of 1986.

The 200-page report sought to assuage those worries, stating: “Because the reported thyroid doses attributable to the accident were generally low, an increase in childhood thyroid cancer attributable to the accident is unlikely.”

That assertion wasn’t bulletproof, however. The report added: “[U]ncertainties remained concerning the thyroid equivalent doses incurred by children immediately after the accident.”

In a press statement, Greenpeace Japan seized on the information gap.

The IAEA concludes that no discernible health consequences are expected as a result of the Fukushima disaster, but admits important uncertainties in both radiation dose and long-term effects,” said Kendra Ulrich, senior global energy campaigner with Greenpeace Japan. “Nobody knows how much radiation citizens were exposed to in the immediate days following the disaster. If you don’t know the doses, then you can’t conclude there won’t be any consequences. To say otherwise is political rhetoric, not science.

The IAEA report conveniently comes as pro-nuclear Prime Minister Shinzo Abe systematically seeks to lift evacuation orders and re-start the country’s nuclear program.

“The IAEA report actively supports the Abe government’s and the global nuclear industry’s agenda to make it appear that things can return to normal after a nuclear disaster,” Ulrich said. “But there is nothing normal about the lifestyle and exposure rates that the victims are being asked to return to.”

In July, Greenpeace Japan charged that the IAEA “has sought to downplay the radiological risks to the population since the early days in 2011. In fact, it produced two documents that can be said to have laid the foundation and justification for Abe’s current policy of de facto forced resettlement.”

[…]

(read the full article at RINF)

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