Police admit planting evidence

Police admit planting evidence
Huntington Beach chief says officers routinely employ tactic with civilian vehicles as part of training exercises.

HUNTINGTON BEACH –

A Huntington Beach police officer’s exoneration for planting a loaded gun in a suspect’s car has led to the revelation that police routinely plant evidence in unsuspecting civilians’ vehicles for training exercises.  Chief Kenneth Small said Friday that police plant contraband – including unloaded weapons, fake drugs and drug paraphernalia – in suspects’ vehicles after they’re arrested as a method of training new officers in searches.  The training practice came to light Friday after a Huntington Beach man said he learned that an officer who planted a handgun in his car during a traffic stop was exonerated of wrongdoing. Thomas Cox, who was later convicted of traffic and drug violations, said he watched in horror as another officer found the gun in the trunk of his Hyundai, igniting laughter among officers.  News of the training technique sparked surprise and criticism from police officials across the county, who said planting weapons in civilian vehicles is “inappropriate” and a “bad idea.”  “I’ve never heard of anybody doing that,” said George Wright, chairman of the Criminal Justice Department at Santa Ana College. “You’re using someone else’s property, and that can lead to other problems. … What if someone forgets about the gun and just leaves it behind?”.  Police in Las Vegas abandoned a similar training tactic for drug-sniffing police dogs last year, when a man was falsely charged with drug possession after a canine officer forgot to retrieve drugs planted in the man’s car, according to published reports.  Still, Small said the exercises teach newer officers how to search vehicles in realistic situations.  Performing the exercise in a parking lot with a police vehicle would not be as effective because the officers would be expecting to find contraband, he said. The training is usually done after suspects are arrested and the cars are being readied for impound, Small said.  But Cox said he was feet away from Officer Brian Knorr that January evening when Knorr flung the gun into the trunk.  “I was thinking, ‘what the hell is this?'” said Cox, a 45-year-old construction superintendent. “I thought I was going to get a weapons charge. I thought I was going to get my ass kicked.”  An officer found the gun minutes later, Cox said.  “That’s not my gun!” Cox said he shouted.  Cox had been pulled over by police after a witness said he saw Cox hit another vehicle and flee the scene.  Cox said he was never told the officers were performing a training exercise.  He filed a complaint with the police department in August against Knorr and another officer, who he said barreled questions at him and called him names like “Slick.”  Several officers testified about the incident during Cox’s October trial. Knorr testified that he planted the loaded gun because he “saw an opportunity to create a realistic search of a vehicle.”  He said he and another officer “had a little chuckle” that night because the gun was found by a veteran police officer instead of the intended subject of the exercise.  Cox was convicted of hit and run, driving without a license, driving under the influence, reckless driving and possession of marijuana. He awaits sentencing Dec. 15.  Last month he received a letter from the police department saying the officers in his complaint had been “exonerated” of wrongdoing.  Small said Friday that using a loaded weapon during training – as Knorr testified he had done – is against department policy, and that performing the exercise in front of Cox “could have been done in a better way.”  But he said Knorr was exonerated because the policy was not widely understood.   “I didn’t feel comfortable holding one officer accountable for it when others were doing it as well,” Small said. “I think the department did something wrong because we didn’t make sure people understood what our policy really was.”  The department doesn’t have a formal protocol for using the public’s vehicles in training exercises, department spokesman Lt. Craig Junginger said. However, vehicle owners typically aren’t told their cars are being used for training because they’re not usually present when the training occurs, Small said.  The training exercises are “designed to be very controlled situations, planned … and discussed with a supervisor in advance,” Small said.  Ed Pecinovsky, bureau chief of training for the state’s commission on Peace Officer Standards and Training, said that no matter how careful officers are, using an arrestee’s car in a training exercise is “asking for problems.”Cox said he’s considering a lawsuit.”This is police abuse,” he said. “Huntington Beach used to be my dream home. Now, I’m moving away.”

Parliament supports Anonymous!

 

Europe signs up to controversial ACTA web treaty

Top official Kader Arif has quit in protest after the EU signed up to the ACTA anti-piracy treaty, which opponents say will fundamentally alter the nature of the internet.

Members of the Polish parliament wore 'Anonymous' masks to protest against the ACTA bill

Members of the Polish parliament wore ‘Anonymous’ masks to protest against the ACTA bill 
The treaty, which must still be ratified by the European parliament, has been mired in controversy over its secret drafting. It aims to prevent counterfeiting and piracy, and introduces tougher sanctions on copyright theft. It has already been the subject of street protests in Poland, where politicians put on masks to support hacker group ‘Anonymous’.  The Anonymous group itself says it is now preparing to mount a ‘huge operation’. The European Parliament has also previously voted against ACTA, saying that its negotiation has been undemocratic. Kader Arif, rapporteur for ACTA in the European Parliament, resigned and wrote that “I want to denounce in the strongest possible manner the entire process that led to the signature of this agreement: no inclusion of civil society organisations, a lack of transparency from the start of the negotiations, repeated postponing of the signature of the text without an explanation being ever given, exclusion of the EU Parliament’s demands that were expressed on several occasions in our assembly.”  He said right-wing parties had “depriv[ed] the Parliament of its right to expression and of the tools at its disposal to convey citizens’ legitimate demands. I will not take part in this masquerade.”  Although some of the most hostile elements of ACTA, such as the threat to deprive users of web access, have been removed in recent drafts. Criminal penalties for copyright infringement, or aiding and abetting it, have been negotiated behind closed doors.

Invisibile Human Body

invisible

invisible

Who needs an invisibility cloak when you can be truly Anonymous? Researchers in Japan recently developed a chemical reagent that turns biological tissue transparent, opening doors to optical imaging techniques and avenues of research that scientists have long only dreamed of. And speaking of dreaming — if you’re going to start turning body parts transparent, where better to start than the brain?  What if you could dissect an organism without so much as picking up a scalpel? For years, researchers have used animals like zebrafish — which are naturally transparent at the embryological stage of development, and were recently genetically engineered to remain transparent through adulthood — to do just that. But for other model organisms, like mice and rats, scientists have always had to get at their insides the old fashioned way: by cutting them up.  Slicing and dicing is necessary because modern techniques for looking at the insides of an organism can’t see deep enough to be of any real use; the tendency for tissue to scatter light, for instance, keeps modern optical methods of observation from probing deeper than 1mm into biological matter.

But all that is about to change. Take a look at the image pictured here. The object on the right may looklike a pineapple gummi bear, but it’s actually a mouse embryo that’s been treated with a new chemical reagent that turns biological tissue transparent. Compare it to the embryo on the left, and you’ll get a sense of why scientists are heralding this discovery as a revolution in the field of optical imaging.  The reagent, known as Scale, was developed by a group of scientists from Japan’s RIKEN Brain Science Institute, and the team has already used it to study neurons in the brains of mice at unprecedented levels of detail. See, what’s really impressive about Scale is that it not only renders tissue transparent, it manages to do so without interfering with fluorescent labels and signaling. (Fluorescent labeling is a well-establish imaging technique that allows scientists to genetically alter proteins of interest so that they light up with a specific color when exposed to certain wavelengths of light.)

The researchers’ findings, which are documented in the latest issue of Nature Neuroscience, demonstrate their ability to visualize in three dimensions the intricate networks of neurons and blood vessels in the brains of embryonic mice at sub-cellular resolution, like the neural stem cells (green) and blood vessels (red) pictured here.  This latest research uses Scale to visualize fluorescently-labeled brain samples, but the researchers say that their reagent will prove invaluable in the study of other tissues, as well. Dr. Atsushi Miyawaki, who led the RIKEN research team, says they envision using Scale on organs like the heart, muscles, and kidneys, and even on tissues from other organisms, including primates and humans.  And while the reagent in its current form is too powerful to use on living organisms, Miyawaki says that could change.  We are currently investigating another, milder candidate reagent which would allow us to study live tissue in the same way, at somewhat lower levels of transparency. This would open the door to experiments that have simply never been possible before.

Jewish Religion Burned!

Anthoney Graziano

Anthoney Graziano

 In a taste for religious revenge, a 19-year-old man was charged Tuesday with so called, “attempted murder and hate crimes”.  In connection with recent firebombings of two northern New Jersey synagogues, it put the region’s Jewish community on edge and prompted round-the-clock police patrols.  Bergen County Prosecutor John Molinelli charged Anthony Graziano, of Lodi, with the Jan. 11 attack on a Rutherford synagogue and the Jan. 3 firebombing of a synagogue in Paramus. He was being held on $5 million bail.  The charges include bias intimidation and nine counts of attempted murder in addition to arson and aggravated arson.  The prosecutor’s office scheduled a 2 p.m. news conference.  Last week, authorities released photos and surveillance video of a man leaving a store on Jan. 9 after allegedly purchasing some of the items used to make the firebomb used in the Rutherford attack. On Monday, tips from the public led them to Graziano, according to the prosecutor’s office. Evidence was recovered during a search of his residence, though Molinelli didn’t provide specifics.  Several Molotov cocktails and other incendiary devices were thrown at Congregation Beth El in Rutherford early on Jan. 11, igniting a fire in the second-floor bedroom of Rabbi Nosson Schuman’s residence. The rabbi, his wife, five children and his parents were sleeping at the time. Police said an incendiary device was thrown through the rabbi’s bedroom and ignited, and the rabbi suffered minor burns on his hands while putting it out.  “I’m elated,” Schuman said Tuesday. “It’s been a very stressful two weeks even with police coverage at our home. We’re still a little scared because obviously this guy’s not normal. Maybe this will restore life back to some Jewish normality, though we will still be doing outreach to try and restore unity.”  The fire at Congregation K’Hal Adath Jeshuran in Paramus was discovered on the morning of Jan. 3 when members smelled gas in the building and contacted authorities. Fire and police officials determined an accelerant had been used in the rear of the building to start a fire. The fire had quickly burned itself out, and no injuries were reported.  In the weeks leading up to the fire bombings, anti-Semitic graffiti was discovered at synagogues in Hackensack and Maywood, according to police. Two days after the Rutherford attack, a swastika was found scrawled in a park in Fair Lawn, though police haven’t said if it is connected to the other incidents.

HACKENSACK, N.J. — A New Jersey prosecutor says a 19-year-old unemployed man charged in the firebombings of two synagogues so called, “anti-Semite” who intended to cause harm?  Bergen County Prosecutor John Molinelli said Tuesday that investigators believe Anthony Graziano of Lodi knew there were people inside when he threw Molotov cocktails into a Rutherford synagogue building that also houses the rabbi’s family.  Molinelli says Graziano rode a bike to the synagogue, and one of the first firebombs he threw into the building landed in the rabbi’s second-floor bedroom while the family was asleep.  Graziano faces nine counts of attempted murder. Molinelli says the charges carry a minimum 30-year sentence because of the number of people in the building. No one was seriously injured.  Graziano is also charged in an earlier firebombing in Paramus.

Anonymous Hacks Again

 

 

anonymous

anonymous


Anonymous strikes again.  Fresh off the last few days’ worth of Web attacks, designed as a kind of cyber-retribution for the demise of file-sharing site Megaupload at the hands of the FBI, members of the “hacktivist” group have taken to Twitter to claim accountability for an attack on CBS.com this morning.  And by CBS.com, we mean all of CBS.com. As in, the attackers didn’t just force the site offline using a barrage of distributed denial-of-service attacks (DDOS) delivered by the group’s “Low Orbit Ion Cannon” tool – which has now been transformed into a Web-based attack vector that unsuspecting users can unknowingly participate in.  It was first assumed that Anonymous somehow acquired root access to CBS.com in this morning’s attack, as the site’s files and directories appeared to have been wiped. However, additional investigation reveals that the attackers used a technique called DNS poisoning to redirect visitors to different web servers than those hosting CBS’ site.  “Anonymous did not take down #CBS .com ; the IP for their web host changed from 92.122.127.27 to 198.99.118.36 & 37; looks like poisoned DNS,” wrote Twitter user @jeremiahfelt.  Users attempting to access the main CBS index page were instead shown a directory structure containing just one file – foundry.html. Any attempts to access any of CBS.com’s sub-sites, like bookmarked pages for its litany of television shows, for example, were met with 404 Not Found errors.  According to the Twitter account @youranonnews, CBS.com was offline for approximately 20 minutes.  But CBS hasn’t been Anonymous’ only Sunday target. The primary site for Universal Music was taken offline earlier today as well, the second such attack on the site in the past week. And the website for French media conglomerate Vivendi, which currently owns Universal Music Group, remains offline as of 2 p.m. (PST).  So, who’s next? A video allegedly representing Anonymous threatened to attack a litany of websites if Megaupload wasn’t put back online within three days’ time. That video (embedded below) was uploaded three days ago, we note, and it appears that whoever was behind it hasn’t followed through with the threats on that one. The list of potential targets included websites and services for the United Nations, Xbox Live, and U.S. Bank, as well as Twitter, Facebook, and YouTube.

Homeland’s future Invasion of Privacy

privacy

privacy

This past summer, at an undisclosed location in a northeastern metropolis, the U.S. Department of Homeland Security (DHS) was trying to predict the future. There were no psychics or crystal balls, just a battery of sensors designed to determine human intention through the subtlest of changes in heart rate, gaze, and other physiological markers.  Together, the sensors are called Future Attribute Screening Technology, or FAST, a $20 million federal project that aims to highlight airport passengers whose bodies betray hostile intentions. In theory, FAST has the potential to detect terrorists in the final minutes before they act, but critics warn that the system may have other consequences, such as flagging innocent travelers through false positives while letting some with ill intent sneak by through false negatives. The DHS, for its part, maintains that FAST is merely improving on a far older and more fallible crime predictor: human judgment.  About 3,000 DHS officers already roam the nation’s airports scanning for suspicious behavior and facial expressions in a program called Screening of Passengers by Observational Techniques, or SPOT. The automated FAST system is intended to supplement SPOT by catching signals that are undetectable to the naked eye. FAST is not designed to replace the decision-making of human screeners, but government officials hope it will eventually be able to passively scan airport passengers and single out those worth pulling aside for additional screening.  In recent trials, DHS recruited subjects and had them attend a mock event, such as a technology expo. Some of the subjects, chosen at random, were asked to perform an objectionable action at the event—not bring in a bomb, obviously, but perhaps steal a CD. Before entering the expo, subjects reported to a kiosk containing a suite of body sensors, each able to take precise measurements from about 20 feet away: A cardiovascular and respiratory sensor measured heart rate and breathing, an eye tracker followed gaze and position of the eyes, thermal cameras measured heat on the face, and floor sensors and a high resolution video system tracked body movement.  That first round of measurements is an essential step, says FAST program manager Robert Middleton, since it assures that individuals are measured against their own baseline rather than some universal standard of agitation. “The system was designed this way from the beginning to avoid simply identifying individuals who enter screening already anxious or angry,” he says.  After the baseline was established, volunteers were then asked a series of questions ranging from innocuous (“Have you been in the area all day?”) to direct (“Are you planning to commit a crime?”). The interview acts like a stimulus: Theoretically, it should trigger a more robust physiological response from conspirators than from innocent passengers. John Verrico, the DHS spokesman for the project, acknowledges the impracticality of a screening system that relies on interrogation but suggests commercial versions will be better. Ultimately, he says, the measurements would be taken in a process akin to passing through a metal detector, and only people with suspicious vital signs would be taken aside for questioning.  DHS’s faith in the technology is based on the controversial theory of malintent, developed 
in 2007 by clinical psychologist and FAST research consultant Daniel Martin. By combining ideas from neuroscience, psychophysiology, psychology, and counterterrorism, Martin concluded that the physiological signs of a future hostile actor would increase with 
the severity of the impending act and as the moment of the crime approaches. If so, a terrorist who plans to blow up a plane in an hour should be easier to detect than a man who plans to cheat on his wife during a business trip. Martin also concluded that the physiological signs, such as heart rate and skin temperature, would be too minute to manipulate, eliminating the possibility that terrorists would outsmart the system. “The system analyzes responses that people have little or no control over,” he claims. “And even if someone can avoid detection on one sensor, it is unlikely he can avoid detection on all.”  So far, DHS has tested FAST on more than 2,000 subjects; the results have been better than chance but not overwhelming. The system correctly determined whether a person was going to commit a malevolent act 78 percent of the time. FAST officials have released some of their findings to peer review and have repeatedly stated their intention to release more, but without complete data in the public forum, some scientists have questioned the feasibility of the program.  Stephen Fienberg, a professor of statistics and social science at Carnegie Mellon University, is one of the most vocal skeptics. In 2003 he led a National Research Council panel that found polygraph testing too imprecisefor use as a screening tool in government hiring. Fienberg has reached a similar conclusion about FAST. “It’s mainly baloney,” he says. “What evidence do we have coming out of physiology, psychology, or brain imaging that we can do any of this? Almost all of what I’ve seen and heard is hype.”  Even if Martin’s theory holds up, the success of FAST also hinges on the reliability and sensitivity of sensors that were not designed for airport security. Robert Middleton cites numerous internal studies showing that remote sensors have the sensitivity required to do the job, and that they performed on par with sensors connected directly to the body. “Scientists who have reviewed our work have typically been impressed with our progress,” he says. However, that work has yet to be scrutinized by the general scientific community.  Criticism of FAST is not limited to sci­entific and tech­nological issues. Some argue that the system violates a basic tenet of personhood: free will. Thinking about doing something and actually doing it are two very different things, says Steven Aftergood, a senior research analyst at the Federation of American Scientists, which provides science-based recommendations on national security issues. “FAST is potentially dehumanizing,” he says. “It denies that a person has the capacity to direct his own actions, to change his mind, and to adapt his behavior to new circumstances.”  The DHS has plenty of time to mull these issues, as FAST is years away from reaching a real airport. But Middleton insists the technology is worth pursuing. “Metal detectors and X-ray machines have been around for a long time, and most people assume they are necessary to keep citizens safe,” he says. “Our program is attempting to do something new, and we are using scientific 
methods to verify that it works.”



 

Three Biological Parents in Three Years!

Three biological parents

Three biological parents

 

Researchers have secured £6m in funding to develop the groundbreaking treatment which could prevent genetic conditions affecting the heart, muscle or brain being passed on to children and future generations.  But the method is controversial because it involves transferring the parents’ DNA into a donor egg, meaning the resulting child would inherit a tiny fraction of their genetic coding from a third party.  Regulations currently forbid scientists from implanting such eggs into patients.  But the Wellcome Trust and Newcastle University has announced a £5.8m package for further lab-based research aimed at assessing the safety of the technique.  It came as the Department of Health ordered a public consultation on whether the technology should be moved from the lab to patients, which will be followed by a Commons debate on the ethics of the issue.  The Health Secretary has the power to lift the regulations and if both the scientific and political criteria are satisfied, the therapy could be trialled in humans within two to three years.  The research is aimed at tackling diseases passed down through families via mutated mitochondria, structures which supply power to cells.  Although 99.8 per cent of our DNA, including all our visible characteristics, is inherited evenly from our father and mother and stored in the nucleus of cells, a tiny fraction resides in the mitochondria and is passed down only by the mother.  Faults in the mitochondria affect about one in 200 children in Britain each year, causing severe and incurable diseases such as muscular dystrophy or ataxia in about one in 6,500 people.  Researchers at Newcastle believe they have developed a method which could prevent this particular group of diseases being transmitted, and potentially wipe them out within a generation.  Prof Doug Turnbull, who is leading the research, said: “The important thing is that this has the possibility of stopping the disease completely.  “If this technique proves to be as safe as IVF and as effective as the preliminary studies, I think we could totally prevent the transmission of these diseases.”  The technique involves taking one egg from the mother and another from a donor, before removing the nucleus from the donor’s egg and replacing it with the nucleus from the mother, either before or after fertilisation.  The child would inherit their identity from their mother and father but would take their mitochondrial DNA from the donor, meaning they would have genetic material from three people.  Sir Mark Walport, head of the Wellcome Trust, said the genetic impact of inheriting a third person’s mitochondrial DNA would be as minimal as changing the batteries in a camera.  He said: “We welcome the opportunity to discuss with the public why we believe this technique is essential if we are to give families affected by these diseases the chance to have healthy children, something most of us take for granted.”  Similar studies conducted on monkeys by US researchers resulted in healthy offspring, and trials on mice showed that the genetic conditions were not inherited by future generations either.  The Newcastle team has so far only tested their technique with abnormal, discarded IVF eggs, meaning the embryos have little chance of developing normally, but the new funding will enable trials with healthy, surplus IVF or donor eggs.  Minister for Universities and Science David Willetts praised the “important and potentially life-saving discovery but added: “It is vital that we to listen to the public’s views before we consider any change in the law allowing it to be used.”  If it is approved in patients the treatment could be made available on the NHS to women using either spare IVF eggs or donated cells from friends or family members.  But it is strongly opposed by groups who oppose embryo research and claim genetic engineering can result in serious defects. Josephine Quintavalle, from the group Comment on Reproductive Ethics (Core), said: “IVF is meant to mimic nature but this is very, very far removed from nature. Even psychologically it’s going to do harm because a child is going to realise what was done to create it. The greatest wisdom is sometimes just to say ‘no’.” The Society for the Protection of Unborn Children described the experiments as “macabre and unethical”. John Smeaton, SPUC director, said: “As with IVF and cloning, this mitochondrial technique may well lead to the developmental abnormalities. Creating embryonic children in the laboratory abuses them, by subjecting them to unnatural processes.”

Anonymous Hackers

anonymous

anonymous

Anonymous, which briefly knocked the FBI and Justice Department websites offline in retaliation for the US shutdown of file-sharing site Megaupload, is a shadowy group of international hackers with no central hierarchy. The temporary disabling of the US government websites is the latest exploit by the loose-knit hacker activists, or “hacktivists,” who have taken credit for scores of online attacks over the past few years. The attacks range from the nuisance-like — the FBI and websites were back up within a few hours — to the truly damaging involving the loss of data and the exposure of private financial information. According to computer , Anonymous does not have a central authority but operates with a “hive mind mentality,” agreeing on targets in discussions in Internet chat rooms and striking simultaneously. Anonymous, on @anonops, one of the various Twitter accounts used by the group, claimed that Thursday’s attacks on the Justice Department and FBI websites were their largest ever, involving over 5,600 people. The distributed (DDoS) attacks were similar to those staged by Anonymous in late 2010 on the Amazon, Visa, MasterCard and PayPal websites in retaliation for their decisions to stop working with WikiLeaks. In a typical , a large number of computers are commanded to simultaneously visit a , overwhelming its servers, slowing service or knocking it offline completely. The defense of WikiLeaks by Anonymous was an extension of “Operation Payback,” a movement which began on the Internet messageboard 4Chan in September 2010. Operation Payback involved cyber attacks on the websites of the (MPAA), (RIAA) and others over their vigorous copyright protection efforts. “Operation Payback stands for free speech and no censorship,” an Anonymous member told AFP in an online chat at the time. The RIAA and MPAA websites were also targeted by Anonymous on Thursday in retaliation for the US government shutdown of Megaupload.com, which the US authorities accused of massive copyright infringement. Beyond DDoS attacks, Anonymous has also taken credit for numerous other hacks, most recently the theft of emails and credit card information for subscribers to US intelligence analysis firm Stratfor. Anonymous said the Stratfor hack was in retaliation for the prosecution of Bradley Manning, the US Army private accused of leaking more than 700,000 US documents to in one of the most serious intelligence breaches in US history. A number of Anonymous members have been arrested in Britain and the United States, but law enforcement authorities have emphasized that it is difficult to trace savvy computer users who know how to hide their tracks. In September, the FBI arrested a member of the Anonymous-affiliated Lulz Security in connection with a crippling cyberattack on Japanese electronic giant Sony’s online operations. Sony’s PlayStation Network, Qriocity music streaming service and Sony Online Entertainment were targeted by hackers beginning in April of last year. Over 100 million accounts were affected and it took Sony months to completely restore its online services. The Sony hacks were both claimed and denied by — a not infrequent occurrence with a group that does not speak with a single voice.

 

Vampire sucking Greece!

Death, Greece

Death, Greece

 

 

Who are the real villains on Wall Street? When it comes to institutionalized greed and corruption, nothing tops the too-big-to-fail banks like JP Morgan Chase, Bank of America and Goldman Sachs. But these financial giants form only one part of the financial oligarchy. Lurking in the shadows are aggressive hedge funds that are just as lethal to our economic well-being. If Goldman Sachs is a vampire squid, as Rolling Stone columnist Matt Taibbi so aptly named it, then hedge funds are like schools of piranhas or sharks, eager to strip the financial carcass to the bone.  The sharks at this very moment are circling Greece, waiting to devour that nation’s resources. To understand this attack we need to enter into the rotting innards of our financial system. But aren’t the Greeks lazy?  Let’s starts with a closer look at why Greece has accumulated so much debt. The answer is not because they sit around sipping retsina rather than working. Instead it has everything to do with the attempt of Europe to improve the lot of the Greek people so they would embrace democracy. Let’s not forget that from 1967 to 1974 Greece was ruled by a military junta that inflicted enormous pain on its people. Helping the Greek people escape poverty was critically important. Greece’s entry into the European Union and the access to capital it provided, allowed the Greek people to rebuild the foundations of prosperity and democracy.  Of course, our vampire squid banks also played a critical role in exacerbating the debt problem. When Greece hit the debt limits set by the E.U., large U.S. banks profited mightily by structuring loans to Greece to skirt those rules.  But the biggest blow came from the 2008 financial crash, which was wholly caused by Wall Street’s reckless gambling spree. When the world economy nearly collapsed into another Great Depression, the weaker economies in the E.U. took the biggest hit. Ireland, Portugal and Greece suffered enormous job loss and massive declines in tax revenues. These countries became the victims of the vast housing bubble that was pumped up by Wall Street’s fantasy financial schemes. Yes, they had accumulated too much debt, but the problem would have been manageable were it not for the Wall Street-created crash.Greece’s debt-crushed government is proposing one way to lighten the load. It’s preparing to rent out ancient archeological sites to advertising firms, demonstrators and, who knows, maybe a hedge fund firm or two looking for a place to hold company parties.  According to this report, Greece’s cultural ministry is prepared to pimp the Acropolis for around $2,000 a day.  “In recent decades,” says the news item, “only a select few people, including Greek-Canadian filmmaker Nia Vardalos and the American director Francis Ford Coppola, have been able to use the Acropolis, while most filming and advertising requests have been refused.” Say goodbye to Greece Classic.  Hedge funds are lightly regulated, privately managed investment funds created and designed for the super-rich, who expect to get much higher rates of return than the rest of us. While you and I are lucky to see a two per cent increase in our retirement portfolios, hedge funds hope to see gains far in excess of 10 per cent. Pension funds and endowments have also followed the super-rich into these funds to gain access to these outsized returns. There are 8,000 or so hedge funds that now manage a total of nearly $2 trillion.  But making these super-profits doesn’t come easy. Hedge funds don’t just get lucky on a few stocks or bonds. They look for an edge, and more than a few go over the edge by engaging in criminal activity like insider trading. Others hope to get to the Promised Land by being tough SOBs who don’t think twice about impoverishing people. Those SOB hedge funds are circling Greece right now, doing all they can to get their hands on the money the European Union wants to lend Greece to reduce its long-term debt problems.  Here’s the play: Greece does not have enough money to pay off the loans that are coming due in the next year. So the E.U. and the International Monetary Fund have assembled a bailout package to help Greece make those payments. In exchange, the Greek people are being asked to suffer through enormous cuts in government spending — which means cuts in jobs, incomes, healthcare, pensions and public education. Everyday citizens are making enormous sacrifices.  But the European Union also insists that the bond holders of Greek debt take a hit. After all, under the supposed rules of capitalism, if you make a bad loan, you suffer the losses. So the E.U. wants to recall the old bonds and replace them with new ones at lower interest rates more suited to Greece’s financial condition. Imagine that! Financial elites are being asked to sacrifice a bit to pay for the problems they helped to create.  Well guess what? The elites don’t like it. You see, hedge funds have been buying up Greek bonds at steep discounts. They want to milk the deal for as much as possible. So they are refusing to accept what the E.U. is offering. The hedge funds want to capture as much of the bailout money as possible. They could care less if the Greek people suffer. (Think Bain.)  But wait — why are the hedge funds refusing the offer when the alternative is having Greece default on the very bonds the hedge funds now own? If they continue to hold out, won’t the hedge funds risk ending up with nothing at all?  Here’s where we dive into rotten core of “modern finance.” These hedge funds think they have covered their bets by taking out financial insurance on their bonds, which would pay them the full value of the bonds (not just the discounted price) if Greece defaults. (These insurance policies are called credit default swaps, and are issued usually by big banks that profit on the insurance premiums.)  So the hedge funds that are playing hardball think they have their bets covered. If Greece doesn’t give them a better deal on their bonds, the hedge funds will welcome a default in order to collect fully on their financial insurance policies.  There’s only one little problem: The entire financial system might collapse, including our own, if Greece defaults. That’s because no one is sure if all the financial insurance can actually be paid off. It could be like AIG all over again, when that giant insurance company couldn’t pay off its financial insurance policies. If one big bank fails to deliver it could set off a chain reaction of financial defaults around the globe.  “Credit default swaps [financial insurance policies] are to ‘hedging’ credit exposure what nuclear weapons are to ‘hedging’ a nation’s defense requirements. Yes, you pay less money than equipping a huge army, but if you use the nukes, everything blows up. Much the same applies with credit default swaps.  “In the old days, bankers basically didn’t bet against their clients. If the borrower was successful, the banker was successful as the loan made money. If you thought the credit risk was bad, you didn’t hedge it by buying a credit default swap; you simply refused to extend the loan (or demanded a lot of collateral against which the loan was secured). Nowadays, no credit analysis is done and ‘hedging’ is done through these toxic instruments which have no social value and create a hugely destabilizing financial system.”  To put it more bluntly, the sharks are using financial nuclear blackmail to milk billions out of the Greek people. They can get away with it because the E.U. and America are enormously fearful that a Greek default will vaporize the global financial system — yet again.   Hopefully one day Occupy Wall Street will grow into a movement larger enough to end this financial terrorism. Until then, we can expect the Greek people to transfer much of their remaining wealth to these amoral and destructive hedge funds.

 

New Human Species

new species

new species

 

The ability to engineer life is going to spark a revolution that will dwarf the industrial and digital revolutions, says Juan Enriquez, a writer, investor, and managing director of Excel Venture Management. Thanks to new genomics technologies, scientists have not only been able to read organisms’ genomes faster than ever before, they can also write increasingly complex changes into those genomes, creating organisms with new capabilities.  Enriquez, who spoke at Technology Review‘s EmTech conference on Tuesday, says our newfound ability to write the code of life will profoundly change the world as we know it. Because we can engineer our environment and ourselves, humanity is moving beyond the constraints of Darwinian evolution. The result, he says, may be an entirely new species. Enriquez is the author of the global bestseller As the Future Catches You: How Genomics & Other Forces Are Changing Your Life, Work, Health & Wealth. His most recent publication is an eBook, Homo Evolutis: A Short Tour of Our New Species.  Technology Review senior editor Emily Singer spoke with Enriquez after his talk.  TR: Why do you think there is going to be a new human species?  Juan Enriquez: The new human species is one that begins to engineer the evolution of viruses, plants, animals, and itself. As we do that, Darwin’s rules get significantly bent, and sometimes even broken. By taking direct and deliberate control over our evolution, we are living in a world where we are modifying stuff according to our desires.  If you turned off the electricity in the United States, you would see millions of people die quickly, because they wouldn’t have asthma medications, respirators, insulin, a whole host of things we invented to prevent people from dying. Eventually, we get to the point where evolution is guided by what we’re engineering. That’s a big deal. Today’s plastic surgery is going to seem tame compared to what’s coming.  How is this impending revolution going to shape the world?  Ninety-eight percent of data transmitted today is in a language almost no one spoke 30 years ago. We’re in a similar period now. But this revolution will be more widespread because this is software that writes its own hardware.  People think this technology will just change pharma or biotech, but it’s much bigger than that. For example, it’s already changing the chemical industry. Forty percent of Dupont’s earnings today come from the life sciences. It’s going to change everything; it will change countries, who’s rich and who’s poor. It’s going to create new ethics.  New ethics? It will change even basic questions like sex. There used to be one way to have a baby. Now there are at least 17. We have decoupled sex from time. You can have a baby in nine months, or you can freeze sperm or a fertilized egg and implant it in 10 years or 100 years. You can create an animal from one of its cells. You can begin to alter reproductive cells. By the time you put this together, you’ve fundamentally changed how you reproduce and the rules for reproduction.  What does it take to make a new species? We’re beginning to see that it’s an accumulation of small changes. Scientists have recently been able to compare the genomes of Neandertals and modern humans, which reveals just a .004 percent difference. Most of those changes lie in genes involved in sperm, testes, smell, and skin. Engineering microbes alone might speciate us. When you apply sequencing technology to the microbes inhabiting the human body, it turns out to be fascinating. All of us are symbionts; we have 1,000 times more microbial cells in our bodies than human cells. You couldn’t possible digest or live without the microbial cells inside your stomach. Some people have microbes that are better at absorbing calories. Diabetics have a slightly sweeter skin, which changes the microbial fauna and makes it harder for them to cauterize wounds. One concern about human enhancement is that only some people will have access, creating an even greater economic divide. Do you think this will be the case? In the industrial revolution, it took a lifetime to build enough industry to double the wealth of a country. In the knowledge revolution, you can build billion-dollar companies with 20 people very quickly. The implication is that you can double the wealth of a country very quickly. In Korea in 1975, people had one-fifth of the income of Mexicans, and today they have five times more. Even the poorest places can generate wealth quickly. You see this in Bangalore, China. On the flip side, you can also become irrelevant very quickly. Scientists are on the verge of sequencing 10,000 human genomes. You point out this might highlight significant variation among our species, and that this requires some ethical consideration. Why?The issue of [genetic variation] is a really uncomfortable question, one that for good reason, we have been avoiding since the 1930s and ’40s. A lot of the research behind the eugenics movement came out of elite universities in the U.S. It was disastrously misapplied. But you do have to ask, if there are fundamental differences in species like dogs and horses and birds, is it true that there are no significant differences between humans? We are going to have an answer to that question very quickly. If we do, we need to think through an ethical, moral framework to think about questions that go way beyond science.

Serious debt

Debt, money

Debt, money

Housingwire reported Thursday that bank risk managers still believe that excessive levels of mortgage debt, student loan debt and credit-card debt are still a serious. In short, risk managers are significantly more pessimistic now than they were last quarter. And for good reason. Over the past 10 to 15 years, total debt outstanding in the US has grown as a much faster pace than population, and little has been done to deal with the debt in spite of widespread unemployment, flat personal income, and declining collateral values. According to this article in the Atlantic Monthly, student loan debt has grown more than 500 percent since 1999. Over a similar period, from 1998 to 2008, household credit-market debt has grown 140 percent. During this period, the US population grew about 10 percent. A similar curve can be observed for mortgage debt as well.  Some economists have made a big deal out the mild increase in the savings rate. This, however, does not show any big improvements either. The personal saving rate, at 3.5 percent during November, was tied at the lowest level seen since Janaury 2008. There was indeed a period following the initial crisis of late 2008 during which the saving rate hit 7.1 percent (during May 2009), but it has since steadily declined and has been below 4 percent for the past three quarters. This is likely as a result of ongoing efforts, through easy money policies, to keep the consumers spending.  And has it worked? Following a post-2008 drop that was similar to the drops in mortgage and credit market debt, consumer debt has been heading back up since the third quarter of 2010. Consumer debt is now about 5 percent below peak levels, following the initial drop, but has grown at about 3 times the rate of population over the past decade. The feds have managed to get consumer debt back up over the past 18 months or so. Has this increased spending been the result of increased employment and wages? Clearly not, since there are still at least 9 million unemployed Americans, and probably more.  Many of those continue to make payments on mortgages, credit card bills and student loans. How much longer this can continue in the fact of ongoing unemployment, underemployment, and underwater real estate remains to be seen, but it’s not difficult to see why the bank risk professionals suspect that more defaults may be on the horizon.  The economy will fix itself through a long and unpleasant period of deleveraging, but that appears to still be in the very early stages. Ongoing government interventions such as the homebuyer tax credits and continued efforts to push down interest rates continue to discourage saving and capital accumulation.  The one place we have seen a fair amount of deleveraging is in the mortgage markets as homeowners default, foreclose, and walk away, but the inventory there continues to be substantial, and declines in mortgage delinquencies may have stalled. During the 3rd Q of 2011, the percent of mortgage loans in foreclosure, according to the Mortgage Bankers Association, was flat from the second quarter, and it was up from the 3rd quarter of 2010. 4.3 percent of mortgage loans were in foreclosure during the 3rd Q of 2010, but 4.4 percent of them were in foreclosure during the same period this year. The overall trend is downward, but at a very slow pace.  Since one can’t get out of student debt through bankruptcy, and since many households use credit cards to balance household budgets, we could be looking at many years before present consumers begin to engage in some serious deleveraging of household debt. We certainly don’t seem to have seen much of it yet.

Federal Reserve Steals $29 Trillion dollars

Ben_Bernanke_Guilty_Federal_Reserve_

Ben_Bernanke_Guilty_Federal_Reserve_

 

The true total of Federal Reserve emergency lending to Wall Street is not $1.2 trillion, as Fed Chairman Ben Bernanke contends, nor the $7.7 trillion figure reported by Bloomberg News, which Bernanke publicly contests.  The real number, argues economist L. Randall Wray, is a staggering $29 trillion.  Wray writes that Bernanke’s recent defense of the lower figure is “misleading” and that the chairman’s claim that Fed bailouts do not constitute a form of spending is plain wrong.   “If he really believes the last claim, then he apparently does not understand the true risks to which he exposed the Treasury as the Fed made the commitments,” writes Wray, a professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY.  He uses data compiled by Ph.D. students under his direction to make the case of Bernanke’s “obfuscation” of the facts about Fed spending during and since the 2008 credit crisis.  Wray argues that the various means of calculating the exposure of the Fed does provide plenty of ways to argue about what “commitment” means but that it is hard to avoid the full number and its effects.  “Think about it this way. A half dozen drunken sailors are at the bar, and the bartender refills their shot glasses with whiskey each time a drink is taken,” he writes.   “At any instant, the bar-keep has committed only six ounces of booze. That is a useful measure of whiskey outstanding. But it is not useful for telling us how much the drunks drank.”  That means that Bernanke’s view of the total underestimates dramatically the effect of all that cash into the system, Wray argues.  “Bernanke would like us to believe that if the Fed newly lent a trillion bucks every day for 3 years to all our drunken bankers that we should total that as only a trillion greenbacks committed. Yes, that provides some useful information but it does not really measure the necessary intervention by the Fed into financial markets to save Wall Street.”  The public dispute about the totals is in contrast to a concerted effort by the Fed to communicate more, not less, about its policies. Bernanke has instituted regular press conferences after Fed actions in an attempt to make its decisions more transparent.  This week, the Fed might even begin to publish a forecast of its future rate decisions, reports The New York Times.  If it decides to do that, such a plan would not be announced any sooner than its next meeting in January, the newspaper reports.