TBR News August 27, 2015
The Voice of the White House
Washington, D.C. August 19, 2015: ”A very informative, and very well-connected, neighbor has been speaking with us about very imporant, often astonishing, national and international matters. His family connections are beyond question and we have spent the last few weeks making copious notes of our meetings.
It is obvious that the current administation detests Russian president Vladimir Putin. He blocked the take-over of Russian oil and gas companies by joint American/Israeli business and political interests, took advantage of the CIA-inspired Kiev upheavels to lay his hands on the Crimean, an area lusted after by Washington because of its strategic naval base and a great deal of offshore oil deposits. Now, the Beltway Bandits are afraid Putin will block their ongoing efforts to grab the oil and gas deposits in the newly-ice free Arctic.
It is therefore no surprise to be told that a plot has been hatched to assassinate Putin when he comes to New York to attend the 70th Session of the U.N. General Assembly on the 15th of September next.
Given the pattern of earlier assassinations, the deed will be done by an identifiable foreigner, in this case a rabid Chechen Muslim, who will be promptly shot to death so he cannot identify anyone.
Obama will, of course, be horrified and send immediate condolences to Moscow while the CIA is deciding whom they want to put in office as Putin’s successor.
On the other hand, however, the CIA has failed miserable in all of its earlier instigated revolutions, fake and planted news stories, and it remains to be seen if their computer-instigated recent Chinese stock market collapse will be successful.
In our next edition, we will be discussing the destruction, by a false-flaga operation, of a very sacred Muslim religious site to get back at ISIS.
Exclusive: U.S. government, police working on counter-drone system – sources
August 20, 2015
by David Morgan
Reuters
WASHINGTON As concerns rise about a security menace posed by rogue drone flights, U.S. government agencies are working with state and local police forces to develop high-tech systems to protect vulnerable sites, according to sources familiar with the matter.
Although the research aimed at tracking and disabling drones is at an early stage, there has been at least one field test.
Last New Year’s Eve, New York police used a microwave-based system to try to track a commercially available drone at a packed Times Square and send it back to its operator, according to one source involved in the test.
The previously unreported test, which ran into difficulty because of interference from nearby media broadcasts, was part of the nationwide development effort that includes the Department of Homeland Security, the Federal Aviation Administration and the Defense Department, the source said.
The sources were not authorized to speak about the effort and declined to be identified.
Asked about the development of counter-drone-technology, the Department of Homeland Security said it “works side-by-side with our interagency partners” to develop solutions to address the unlawful use of drones. Officials with the Defense Department, FAA and New York Police Department declined to comment.
But the sources acknowledged that efforts to combat rogue drones have gained new urgency due to the sharp rise in drone use and a series of alarming incidents.
The number of unauthorized drone flights has surged over the past year, raising concerns that one could hit a commercial aircraft during landing or take-off, or be used as a weapon in a deliberate attack, the sources said.
Drones have flown perilously close to airliners, interfered with firefighting operations, been used to transport illegal drugs into the United States from Mexico, and sparked a security scare at the White House, among other incidents.
LIMITED POWERS
But U.S. authorities have limited tools for identifying drone operators, many of them hobbyists, who violate federal rules that drones fly no higher than 400 feet (120 meters) and no closer than 5 miles (8 km) to airports. One reason for the enforcement gap is that Congress in 2012 barred the FAA from regulating recreational drones.
A system capable of disabling a drone and identifying its operator would give law enforcement officials practical powers to block the flights.
At crowded venues such as Times Square or the Super Bowl, police want to be able to take control of a drone, steer it safely away from the public and guide it back to the operators, who can then be identified, the sources said.
A Reuters analysis of FAA data shows that authorities identified operators in only one in 10 unauthorized drone sightings reported in 2014, while only 2 percent of the cases led to enforcement actions.
“We can’t shoot it out of the sky. We have to come up with something that’s kind of basic technology so that if something happens, the drone or device will just go right back to the operators. It won’t crash,” one of the sources said.
To do that, experts say that a drone needs to be tracked and identified with a receiver and then targeted with an electromagnetic signal strong enough to overwhelm its radio controls.
“You need enough power to override the transmitter. If I just jam it so it can’t receive signals, it’s probably going to crash. But if I know the transmission codes the drone is using, I can control that object,” said retired U.S. Marine Lieutenant Colonel Muddy Watters, an electronic warfare expert.
Laws governing the use of drones have lagged their dramatic rise in areas spanning agriculture, filming and recreational use. Recreational drone operators are not required to register their machines, obtain training or put identifying features on the aircraft, making it extremely difficult for police to track down rogue operators.
FIRE-FIGHTING DISRUPTION, SECURITY SCARES
U.S. pilots have reported more than 650 drone sightings this year, as of Aug. 9, well over double the 238 total for all of 2014, the FAA said last week.
More than 1 million drones of all kinds are expected to be sold in the United States this year, compared to 430,000 in 2014 and 120,000 in 2013, according to the Consumer Electronics Association.
In California, errant drones forced firefighters to suspend air drops of water and fire retardant on wild fires this summer.
In January, a “quadcopter” drone landed on the White House lawn after its operator lost control of the device in downtown Washington. Federal officials decided not to bring criminal charges.
Police say their greatest fear is weaponization, as the advance of drone technology enables the unmanned aerial vehicles (UAVs) to travel farther and faster and carry larger payloads.
Guns can be fixed to drones and fired with relative ease, as demonstrated in a popular video posted to YouTube by a Connecticut teenager in July. The 15-second video, entitled “Flying Gun”, shows a quadcopter hovering just above the ground in a wooded area and jerking backward with each of four shots.
The case is under investigation by the FAA to determine whether the drone violated aviation safety rules.
Safety and security concerns have prompted bipartisan discussions in Congress about options that include federal support for jamming drone systems and other p
Drone industry executives say that one possible solution is an industry-wide agreement to include so-called “geo-fencing” software in drones to prevent them from straying above the legal altitude or too close to sensitive sites.
Chinese drone maker SZ DJI Technology Co Ltd, whose drone was involved in the January crash on the White House grounds, has since released a software fix that will restrict flights around sensitive areas.
Federal authorities say they are also prepared to bring federal criminal charges against rogue drone operators who violate FAA restrictions.
otential technology solutions.
Senator Charles Schumer, a New York Democrat, proposed this week that drone manufacturers be required to install technology capable of preventing the unmanned aircraft from straying near “no fly” areas such as airports.
(Additional reporting by David Alexander, Andrea Shalal and Doina Chiacu; Editing by Soyoung Kim and Stuart Grudgings)
Ashley Madison: Leaked accounts fallout deepens
August 20, 2015
by Chris Baraniuk
Technology reporter
BBC News
Data from the Ashley Madison website breach has flooded on to the web, leaving thousands of people fretting about the potential consequences.
Several big names have supposedly been “outed” by the press after the release of personal information stolen from the dating website, which is aimed at married people. And generally speaking, there is huge potential for damaging people’s reputations.
There are questions about how – or whether – Ashley Madison will recover from the incident, which has the potential to be one of the messiest and most legally troublesome data dumps in history.
What are people doing with the data?
There are already some who have tried to tie names and email addresses in the database to real individuals. One particularly widely reported incident concerns two Australian DJs who, while interviewing a concerned listener live on air, revealed to her that details identifying her husband were present in the database. The woman responded in shock, saying: “Are you freaking kidding me?” Shortly afterwards, she hung up.
One of the hosts admitted: “I don’t know if we should have done that. That hasn’t left me with a good feeling.”
It’s worth noting that people were able to sign up to Ashley Madison using false names and email address – no email account verification was required. One SNP MP, Michelle Thompson, whose email address was among the millions included in the dump, has said the address was harvested by hackers and that she never contacted the website herself. There are also a number of obviously fake details – including an email address for FBI agent Fox Mulder, a character on TV show, The X-Files.
Who else has been linked to the site as a user?
One allegation hitting the headlines is that anti-divorce activist and US TV personality Josh Duggar had an account, though he has yet to comment on the claim. Further to this, a wide range of public figures and government employees’ names and email addresses have been found in the data, but again it’s not clear whether this is indicative of actual use of the site. The list includes names of police officers, government officials, members of the military, diplomats and senior politicians. No such individuals have so far publicly admitted using Ashley Madison.
What are the implications of being able to search the data?
Several people have created tools to let users search for email addresses in the data, but it’s not always clear how these tools are working, how accurate they are, or whether they are recording such search attempts. Microsoft-accredited security expert Troy Hunt has published a tool to allow people to be notified if their email address is part of the dump, but does not allow people to search through it at will. He has also uwritten a Q&A explaining why he believes doing so would be unfair.
A breach of privacy may have occurred if personal information has been discovered and published, according to Mark Watts, head of data protection at London law firm Bristows. In such cases the victim may decide to sue the perpetrator.
However, searching the data on an individual basis and purely out of curiosity is not likely to be considered illegal. “Simply looking at it itself as an individual shouldn’t be a problem,” he told the BBC.
Did Ashley Madison users take steps to protect themselves from this?
Besides using fake names and email addresses, some users had in the past paid Ashley Madison to remove their data. Previously, Ashley Madison’s chief executive told Ars Technica that data would be deleted “permanently”. However, multiple reports have now alleged that data which users paid £15 ($23) to be removed actually remained in the database that has now been made public online.Avid Life Media, which owns Ashley Madison, did not respond directly to a request for comment on the claim. Mr Watts said users might, in theory, be able to make a claim against the company that there had been a breach of contract. But he said such a move would be complicated, costly, and risk further exposure.
Would the Data Protection Act aid people here?
A question mark exists over whether Ashley Madison was in fact subject to the UK’s Data Protection Act. Mr Watts said that for this to be the case, the company would have to have some physical presence, such as an office or server, in the UK.
“If we assume they are somehow subject to [the act], then people have a right to have their data deleted for free. You can’t charge for it,” he said. “That would potentially be an issue.”What about the legal consequences for married couples?
If someone suspected their spouse of adultery or infidelity, finding identifying details within the Ashley Madison details could be grounds for a divorce case, according to Marilyn Stowe, a prominent British divorce lawyer who spoke to the BBC. Evidence that a husband or wife had used the site could be considered “unreasonable behaviour” she explained.
“Even if you’re not able to prove adultery, which is one basis for an immediate divorce, unreasonable behaviour is another one,” she said.
USIS security check company that greenlighted Snowden slapped with $30mn for fraudulent practices
August 20, 2015
RT
The firm that was the largest provider of background security checks on numerous US federal agency employees – including whistleblower Edward Snowden – will have to pay out $30 million, concluding a four-year investigation into its lax practices.
The United States Investigations Services Inc. (USIS), as the private company was known, had been suspected of massive irregularities in its work for some time. The probe uncovered very serious breaches of security from 2008 to 2012, as hundreds of thousands of cases were found to be poorly processed, before being approved and sent to the agencies tasked with ensuring national security.
The 2011 lawsuit, joined later by the US Justice Department, resolves claims that no adequate quality control was carried out during background checks. The $30-million settlement also relates to a wider bankruptcy deal for Altegrity Inc, the USIS parent company, which filed for bankruptcy in February.
It transpired in early 2014 that the USIS had submitted a total of 665,000 incomplete investigations to the US government, which amounted to about 40 percent of the caseload over four years, up until late 2012. The Justice Department then filed a 25-page civil complaint against the USIS, alleging they simply “flushed” hundreds of thousands of poorly performed security checks to various federal agencies. These included the Department of Defense, the Department of Homeland Security and the National Security Agency – a fact that exposed the country to very serious potential security breaches.
The USIS, which employs some 6,000 workers, handles roughly 45 percent of the government’s security checks on potential new hires. It is responsible for some 2.2 million background checks, including that of former NSA contractor and whisteblower, Edward Snowden, and Aarone Alexis, the technology contractor who murdered 12 people at the Washington Navy Yard last year.
About 90 percent of the company’s caseload used to come from the US government, which supplied it with $4 billion in contracts over the years.
The current investigation into substandard performance was not related to the separate Snowden probe, but the government’s attention has been focused on the company for some time now.
“Shortcuts taken by any company that we have entrusted to conduct background investigations of future and current federal employees are unacceptable,” the head of the Justice Department’s civil division, Benjamin Mizer, told reporters in a statement.
Altegrity, the parent company of the now-defunct USIS, declined to comment.
In its internal practice of ‘dumping’ incomplete cases to the US Office of Personnel Management, USIS was ruled to have taken shortcuts in order to boost its profits. The damages were set at $30 million, which was the sum Altegrity/USIS initially believed it was oweIn the course of the investigation, the company was found to generally have a very lax attitude to its work.
The Justice Department complaint alleged at the time that one USIS official even joked to his quality-control higher-ups at the USIS that the company had “flushed everything like a dead goldfish.”
Also in late 2010, another employee talked of a “backlog” of work, while discussing tickets to a New Year’s Eve show in the same email. “Have a bit of a backlog building, but fortunately, most people are off this week so no one will notice!” the unidentified employee was reported to have said in the correspondence.
The lawsuit was first filed by former employee Blake Percival, under the False Claims Act in June 2011. He is set to receive a share of the settlement under the law, but the sum is not being disclosed. The Justice Department later joined the lawsuit.
UN Expert Slams China on Chemical Blast Secrecy
August 19, 2015,
ABC News
GENEVA — A U.N. human rights expert has criticized China for its lack of transparency in handling a chemical blast in the northeastern city of Tianjin.
Baskut Tuncak, U.N.’s expert on hazardous substances and waste, said the disaster might have been prevented or the extent of the damage limited if authorities had provided more information and pointed to countries’ obligations to inform the public about hazardous substances.
“This chemical disaster serves as yet another tragic example of the need of information about hazardous substances to protect, respect and realize human rights,” he said in a statement Wednesday. “The lack of information when needed — information that could have mitigated or perhaps even prevented this disaster — is truly tragic.”
The comments amount to an unusually sharp rebuke for Beijing from a U.N. expert and join appeals in China for better communication from authorities about the fates those who were killed or remain missing. The Aug. 12 blasts at a warehouse for hazardous materials in Tianjin killed at least 114 people. Another 65 people are still missing and 674 are hospitalized.
The statement criticized Chinese press restrictions after the explosions and called for “complete transparency” in the pending investigation.
“The reported restrictions on public access to health and safety information and freedom of the press in the aftermath are deeply disturbing, particularly to the extent it risks increasing the number of victims of this disaster,” Buncak added.
The blasts occurred at a warehouse where 700 tons of sodium cyanide — a toxic chemical that can form combustible substances on contact with water — was being stored in amounts that violated safety rules.
Why Donald Trump Won’t Fold: Polls and People Speak
August 22, 2015
by Michael Barbaro, Nate Cohn and Jeremey W. Peters
New York Times
In the command centers of Republican presidential campaigns, aides have drawn comfort from the belief that Donald J. Trump’s dominance in the polls is a political summer fling, like Herman Cain in 2011 — an unsustainable boomlet dependent on megawatt celebrity, narrow appeal and unreliable surveys of Americans with a spotty record of actually voting in primaries.
A growing body of evidence suggests that may be wishful thinking.
A review of public polling, extensive interviews with a host of his supporters in two states and a new private survey that tracks voting records all point to the conclusion that Mr. Trump has built a broad, demographically and ideologically diverse coalition, constructed around personality, not substance, that bridges demographic and political divides. In doing so, he has effectively insulated himself from the consequences of startling statements that might instantly doom rival candidates.
In poll after poll of Republicans, Mr. Trump leads among women, despite having used terms like “fat pigs” and “disgusting animals” to denigrate some of them. He leads among evangelical Christians, despite saying he had never had a reason to ask God for forgiveness. He leads among moderates and college-educated voters, despite a populist and anti-immigrant message thought to resonate most with conservatives and less-affluent voters. He leads among the most frequent, likely voters, even though his appeal is greatest among those with little history of voting.
The unusual character of Mr. Trump’s coalition by no means guarantees his campaign will survive until next year’s primaries, let alone beyond. The diversity of his coalition could even be its undoing, if his previous support for liberal policies and donations to Democrats, for example, undermine his support among conservatives. And in the end, the polling suggests, Mr. Trump will run into a wall: Most Republicans do not support his candidacy and seem unlikely ever to do so. Even now, more say they definitely would not vote for him than say they support him.
But the breadth of Mr. Trump’s coalition is surprising at a time of religious, ideological and geographic divisions in the Republican Party. It suggests he has the potential to outdo the flash-in-the-pan candidacies that roiled the last few Republican nominating contests. And it hints at the problem facing his competitors and the growing pressure on them to confront him, as several, like Jeb Bush and Scott Walker, are starting to do.
His support is not tethered to a single issue or sentiment: immigration, economic anxiety or an anti-establishment mood. Those factors may have created conditions for his candidacy to thrive, but his personality, celebrity and boldness, not merely his populism and policy stances, have let him take advantage of them.
Tellingly, when asked to explain support for Mr. Trump in their own words, voters of varying backgrounds used much the same language, calling him “ballsy” and saying they admired that he “tells it like it is” and relished how he “isn’t politically correct.”
Trumpism, the data and interviews suggest, is an attitude, not an ideology.
For voters like Jan Mannarino, a 65-year-old retired teacher who drove an hour from her home in Green Oak Township, Mich., to see Mr. Trump this month, his defiance of political norms is his single greatest virtue.
“Even if he doesn’t win, he’s teaching other politicians to stop being politicians,” Ms. Mannarino said. “He comes on strong. He could say it gently. But I think no one would listen.”
When people talk about the qualities Mr. Trump would bring to the White House, they describe the raging, merciless executive who fired people for sport on television. Some mention trips to his golf courses, which they admiringly note are impeccably run. A common refrain: “He’s a person who gets things done.”
That he has no experience in government is not a liability, many say, but rather one of the main reasons they want him in Washington.
“We don’t need a politician for president; we need a businessman,” said Tom Krzyminski, 66, a hairstylist from Bay City, Mich. “That’s what we need to get us out of the mess we’re in.”
A New York Times review of nine nonpartisan national polls and more public surveys in the early nominating states shows that, thus far, Mr. Trump is outperforming his Republican rivals with constituencies they were widely expected to dominate.
For example, he leads Senator Ted Cruz of Texas, a hero to fiscal conservatives, among Tea Party supporters, 26 percent to 13 percent, according to averages of the last nine national polls. He leads former Gov. Mike Huckabee of Arkansas, a former preacher, among evangelicals, 21 percent to 12 percent. And he is ahead of Mr. Bush, the former Florida governor and a favorite of mainstream donors, among moderate Republicans, 22 percent to 16 percent.
National polls, and both public and partisan pollsters, have struggled to unravel the precise sources of Mr. Trump’s support, leaving many to ascribe it to anger and angst in the Republican electorate. But interviews with voters highlight the degree to which his popularity hinges on personality — and offer an answer to an enduring mystery: Why haven’t Mr. Trump’s outrageous statements, his lack of loyalty to the Republican Party and his caustic attacks on rivals hurt his standing?
His most offensive utterances have, for many Republicans, confirmed his status as a unique outsider willing to challenge conventions, and satisfied a craving for plain-spoken directness.
Asked if Mr. Trump had crossed a line with his language, Carl Tomanelli, 68, a retired New York City police officer in Londonderry, N.H., seemed surprised by the question.
“People are starting to see, I believe, that all this political correctness is garbage,” he said. “I think he’s echoing what a lot of people feel and say.”
Many say they support Mr. Trump because of his unusual statements, not in spite of them.
Lisa Carey, 51, of Greenfield, N.H., immediately cited Mr. Trump’s outspokenness when asked why his support remains so high.
“As inappropriate as some of his comments are, I think it’s stuff that a lot of people are thinking but afraid to say,” she said. “And I’m a woman.”
Asked if they think his brashness would make it more difficult for him to work effectively as president, many voters argue the opposite.
“I want people who are negotiating with him to believe my president when he says he’s going to do something,” said Lori Szostkiewicz, 54, an educator from Hampstead, N.H. “I want to negotiate from a position of strength, not weakness.”
In interviews with voters in Michigan and New Hampshire over the past two weeks, after events hosted by Mr. Trump, none cited his policies as chief motivation for backing him. Many pointed, instead, to his wealth, saying they believed it set him apart from career politicians and freed him of the demands of donors.
Even as dozens of national and state polls have charted Mr. Trump’s steady ascent, Republican campaigns have taken solace in their conviction that those surveys are flawed and misleading. In interviews, campaign pollsters argue that such polls, conducted largely by media organizations and universities, rely on feedback from many Republicans who are unlikely to vote because the polls do not verify the party registration or voting history of respondents — a fact that those conducting the surveys concede.
New data provided to The Times by Civis Analytics, a firm aligned with Democrats and founded by the former chief analytics officer of the Obama re-election campaign, shows that there is merit to those concerns, but not enough to call Mr. Trump’s lead into question. Curious about the Republican primary landscape, the firm decided to see what it could learn from its own survey, at first for internal research purposes.
Unlike most public polls, Civis’s relied on a list of registered voters that included their voting histories, allowing it to measure Mr. Trump’s support among those who regularly cast ballots in primary elections.
The survey, which was conducted on landlines Aug. 10 through Wednesday and has a margin of sampling error of plus or minus four percentage points, showed Mr. Trump’s support at 16 percent among registered voters who identified as Republicans. That tally is less than any public poll in more than a month, but still more than any other candidate. Ben Carson was at 11 percent, and Mr. Bush at 10 percent.
Trump doesn’t need anybody’s money,” said Maureen Colcord, 60, a clinical dietitian from Derry.
A poll weighted to reflect the characteristics of the adult population, like most conducted for national media organizations, would have shown Mr. Trump faring some two points better than the Civis data, which was adjusted to reflect the characteristics of registered voters who identify as Republicans. The survey included 757 Republican-leaning respondents, considerably more than other polls of the Republican presidential field.
“In reality his real support is less than what we see in the polling today,” said Masahiko Aida, lead survey scientist for Civis.
The Civis poll also hinted at a potential problem for Mr. Trump: states that allow only registered Republicans to participate in nominating contests, including Iowa and Nevada. He was at 14 percent among registered Republicans in the states with party registration, compared to 18 percent of the voters who were unaffiliated with a party.
As expected, Mr. Trump performed best among less-frequent voters. He had the support of 22 percent of Republican-leaning adults who did not vote in the 2012 general election. But he still held an edge, with 15 percent, among registered Republicans who had voted in a primary since 2008.
“Whether the person voted in two or eight or 12 elections, Trump leads,” Mr. Aida said.
His falloff in support when infrequent voters were sifted out was not unique: Support for some of Mr. Trump’s rivals, including Mr. Bush and Mr. Carson, declined by similar amounts, or even more, among the most frequent voters, Civis found.
Mr. Trump’s strength among less-frequent voters is a challenge for his campaign, which may lack the organizing experience and infrastructure to motivate them and turn them out in large numbers for a primary or caucus.
But those irregular voters, like Norman Kas-mikha, 41, a grocer from Shelby Township, Mich., represent a real opportunity for the Republican Party, which is determined to retake the White House in 2016 after losing the last two campaigns.
“Right now I don’t have a second choice,” Mr. Kas-mikha said. “They all blend in to me. It’s Donald Trump — and everyone else.”
“My second choice,” he added, “might be staying at home.”
China fears and global growth doubts grip markets
August 13, 2015
by Sarah White
Reuters
MADRID- Markets will be watching for China’s next move as signs of a slowdown in the world’s second-largest economy stack up, raising expectations it will act to stoke growth.
A looming snap election in Greece and a closely watched conference hosted by the Federal Reserve in the United States are also likely to keep investors on their toes next week, in particular as they look for hints on when the U.S. will raise interest rates.
Fears that Chinese growth is weakening, dragging down the global economy with it, are already hammering commodities and world stock markets.
Both tumbled on Friday after a survey showed Chinese manufacturing slowed the most since the global financial crisis in 2009 – adding to other worrying clues about the country’s health, including its falling exports.
China devalued the yuan earlier in August, by pushing its official guidance rate down 2 percent. The central bank has said there was no reason for the currency to fall further, but investors are also bracing for further interest rate cuts.
“It will be all eyes on the Chinese authorities for any further policy support steps, alongside the People’s Bank of China yuan fixings and trading swings,” analysts at Investec Economics said in a note to clients.
China is also widely expected to relax reserve requirements ratios for its banks again in the coming months, a measure intended to spur lending by reducing the cash they need to hold. It is trying to keep its economy on course to grow 7 percent in 2015 – its slowest pace in a quarter of a century.
“We continue to expect a total of 100 basis points of reserve requirement ratio cuts by end-2015, with the first cut likely to take place within the next two weeks,” economists at Standard Chartered said.
The cash reserves ratio has already been cut three times this year.
EYES ON FED, GREECE
By the end of next week attention may shift away to the Rocky Mountains, where policymakers are due to gather from Aug. 27-29 for the Fed’s conference of central bankers, finance ministers, academics and financial market participants in Jackson Hole.
Fed chair Janet Yellen is not expected to attend, raising the prospect that other Fed officials may be more tight-lipped about the likelihood of the first rate increase in almost a decade, some analysts said.
The prospect of an increase as soon as September receded this week as the Fed released minutes of July meeting. They gave no clear signals as to the timing of such a move – which would affect markets across the world and could cause more pain for emerging market assets, already being hit by China’s woes.
Fed policymakers are still concerned about the weakness of the global economy, the minutes showed, but they were also more confident about US growth prospects.
Further clues on both matters should be gleaned from data releases this week, including second-quarter gross domestic product figures for the United States, due on Thursday.
Quarter-on-quarter GDP growth in the period is expected to be revised upwards to 3.2 percent from 2.3 percent, according to a Reuters poll.
In the euro zone, investors will also be looking at an German economic sentiment survey due on Tuesday for a better idea of the scope of the bloc’s recovery.
Preliminary August consumer price readings for Germany and Spain on Friday will provide further insight into how effective the European Central Bank’s bond-buying efforts have been at warding off deflation.
But the spotlight will mainly fall once again on Greece, where Prime Minister Alexis Tsipras has resigned. That opened the way for early elections after he secured much-needed funds from the country’s third international bailout program.
The current Greek government aims to strengthen its position in the election after accepting a rescue deal it once opposed. But that creates more uncertainty for markets already on edge over whether Greece will deliver on promised reforms and get its economy and banks back on track.
(Additional reporting by Koh Gui King in Beijing, editing by Larry King)
Why is China’s stock market falling and how might it affect the global economy?
Concerns about inflation, shares and interest rates are raised after ‘Black Monday’ chaos sees billions wiped off markets around the globe
August 24, 2015
by Katie Allen
The Guardian
What has happened in China?
China’s stock market has fallen sharply over recent weeks despite measures by officials in Beijing aimed at calming investors’ jitters and shoring up global confidence in the country’s slowing economy.
Shares in China had soared 150% in the 12 months to mid-June as individual investors piled into the rising market, often borrowing heavily to do so. But chiming with warnings that shares were overvalued and the signs of an economic slowdown, the momentum came to a shuddering halt when shares hit a seven-year peak.
Following another plunge on what was dubbed “Black Monday”, China’s stock markets have now given up all their gains for the year.
China’s shock move to devalue its currency, the yuan, this month only served to intensify worries about the world’s second-largest economy.
What has happened on other markets?
Shares around the world followed China’s stock markets lower. About £74bn was wiped off the value of the FTSE 100 and on Wall Street, the Dow Jones Industrial Average slumped by a record of more than 1,000 points at one stage.
Commodities such as crude oil and copper have also tumbled to multi-year lows as investors take fright over signs of waning demand in the world’s leading consumer of raw materials.
The currencies of emerging Asian economies have weakened as investors drop those assets seen as riskier to hold. But investments perceived as safe havens in times of trouble, such as gold and some government bonds, are in demand.
Is this a repeat of the 2008 global financial crisis?
Some of the falls on stock markets are certainly reminiscent of the swings seen around the time of the collapse of the US bank Lehman Brothers. The FTSEurofirst 300, a pan-European share index, suffered its biggest one-day drop since late 2008, losing 5.4%. For Shanghai’s composite index, Monday’s 8.5% slump was the biggest since February 2007.
But some economists say the parallels stop there. They see limited risk to China’s real economy from the stock market turmoil and little to be worried about beyond China.
Julian Jessop, the chief global economist at the consultancy Capital Economics, said: “The current panic is essentially ‘made in China’. The recent data from other major economies, including the US, eurozone and Japan, has generally been good … Aside from the bad news from China, there is very little to support fears of a major global downturn.”
But others are less sanguine. They point out that China’s slowdown is just one of many factors worrying investors alongside lingering political problems in the eurozone, signs of weaker global growth and vast sums flowing out of fragile emerging markets such as Brazil. Furthermore, policymakers apparently have few tools left to help.
Should I be worried?
George Osborne, the UK chancellor, suggests not and believes China’s stock market woes will not have much impact on European economies.
But there are plenty of other voices saying this could get a lot worse. Larry Summers, the former US Treasury secretary, has suggested that the US Federal Reserve may be forced to ease monetary policy, rather than hiking interest rates in the next few months as had been expected.
Is Trumpism the ‘New Nationalism’?
Pat Buchanan: To the Donald, ‘the world is not Davos; it is the NFL’
August 24. 2015
by Patrick J. Buchanan
Since China devalued its currency 3 percent, global markets have gone into a tailspin. Why should this be?
After all, 3 percent devaluation in China could be countered by a U.S. tariff of 3 percent on all goods made in China, and the tariff revenue used to cut U.S. corporate taxes.
The crisis in world markets seems related not only to a sinking Chinese economy, but also to what Beijing is saying to the world; i.e., China will save herself first even if it means throwing others out of the life boat.
Disbelievers in New World Order mythology have long recognized that this new China is fiercely nationalistic. Indeed, with Marxism-Leninism dead, nationalism is the Communist Party’s fallback faith.
China has thus kept her currency cheap to hold down imports and keepexports surging. She has run $300 billion trade surpluses at the expense of the Americans. She has demanded technology transfers from firms investing in China and engaged in technology theft.
Disillusioned U.S. executives have been pulling out.
And the stronger China has grown economically, the more bellicose she has become with her neighbors from Japan to Vietnam to the Philippines. Lately, China has laid claim to virtually the entire South China Sea and all its islands and reefs as national territory.
In short, China is becoming a mortal threat to the rules-based global economy Americans have been erecting since the end of the Cold War, even as the U.S. system of alliances erected by Cold War and post-Cold War presidents seems to be unraveling.
Germany, the economic powerhouse of the European Union, was divided until recently on whether Greece should be thrown out of the eurozone. German nationalists have had enough of Club Med.
On issues from mass migrations from the Third World, to deeper political integration of Europe, to the EU’s paltry contributions to a U.S.-led NATO that defends the continent, nationalistic resistance is rising.
Enter the Donald. If there is a single theme behind his message, it would seem to be a call for a New Nationalism or New Patriotism.
He is going to “make America great again.” He is going to build a wall on the border that will make us proud, and Mexico will pay for it.
He will send all illegal aliens home and restore the traditional value of U.S. citizenship by putting an end to the scandal of “anchor babies.”
One never hears Trump discuss the architecture of our rules-based global economy. Rather, he speaks of Mexico, China and Japan as tough rivals, not “trade partners,” smart antagonists who need to face tough American negotiators who will kick their butts.
They took our jobs and factories; now we are going to take them back. And if that Ford plant stays in Mexico, then Ford will have to climb a 35-percent tariff wall to get its trucks and cars back into the USA.
Trump to Ford: Bring that factory back to Michigan!
To Trump, the world is not Davos; it is the NFL. He is appalled at those mammoth container ships in West Coat ports bringing in Hondas and Toyotas. Those ships should be carrying American cars to Asia.
Asked by adviser Dick Allen for a summation of U.S. policy toward the Soviets, Ronald Reagan said: “We win; they lose.”
That it is not an unfair summation of what Trump is saying about Mexico, Japan and China.
While the economic nationalism here is transparent, Trump also seems to be saying that foreign regimes are freeloading off the U.S. defense budget and U.S. military.
He asks why rich Germans aren’t in the vanguard in the Ukraine crisis. Why do South Koreans, with an economy 40 times that of the North and a population twice as large, need U.S. troops on the DMZ?
“What’s in it for us?” he seems ever to be asking.
He has called Vladimir Putin a Russian patriot and nationalist with whom he can talk. He has not joined the Republican herd that says it will cancel the Iran nuclear deal the day they take office, re-impose U.S. sanctions and renegotiate the deal.
Trump says he would insure that Iran lives up to the terms.
While his foreign policy positions seem unformed, his natural reflex appears non-ideological and almost wholly results-oriented. He looks on foreign trade much as did 19th-century Republicans.
They saw America as the emerging world power and Britain as the nation to beat, as China sees us today. Those Americans used tariffs, both to force foreigners to pay to build our country, and to keep British imports at a price disadvantage in the USA.
Then they exploited British free-trade policy to ship as much as they could to the British Isles to take down their factories and capture their jobs for U.S. workers, as the Chinese do to us today.
Whatever becomes of Trump the candidate, Trumpism, i.e., economic and foreign policy nationalism, appears ascendant.
Hungary scrambles to confront record migrant influx
August 26, 2015
by Marton Dunai
Reuters
ROSZKE, Hungary- Hungary made plans on Wednesday to reinforce its southern border with helicopters, mounted police and dogs, and was also considering using the army as record numbers of migrants, many of them Syrian refugees, passed through coils of razor-wire into Europe.
Over 2,500 mainly Syrians, Afghans and Pakistanis crossed from Serbia into the European Union on Tuesday, over, under or around a razor-wire barrier into the hands of an over-stretched police force that struggled to fingerprint and process them.
Unrest flared briefly at a crowded reception center in the border region of Roszke, with tear gas fired.
Another 1,300 were detained by 9.30 a.m. (0730 GMT) on Wednesday.
More will have passed unnoticed, walking through gaps in a border fence being built by Hungary into a Europe groping for answers to its worst refugee crisis since World War Two.
In Germany, which expects to receive 800,000 asylum-seekers this year, Chancellor Angela Merkel was due in the eastern town of Heidenau, near Dresden, the scene of violent clashes over the weekend involving far-right militants protesting against the arrival of around 250 refugees, underscoring the social tensions unleashed by the influx.
With frequent attacks on refugee shelters and warnings of rising xenophobia, Merkel’s cabinet agreed to double the funding this year to help towns cope with the record number of arrivals.
Hungary, which is part of Europe’s Schengen passport-free travel zone, is building a 3.5-metre high fence along its 175-km (110-mile) border with Serbia in a bid to keep them out, taking a hard line on what right-wing Prime Minister Viktor Orban says is a threat to European security, prosperity and identity.
Government spokesman Zoltan Kovacs said parliament would debate next week whether to employ the army in the border effort.
“Hungary’s government and national security cabinet … has discussed the question of how the army could be used to help protect Hungary’s border and the EU’s border,” Kovacs said.
Authorities said over 140,000 migrants had entered Hungary from Serbia to far this year. The numbers traveling through the Balkans have soared in recent weeks, with 3,000 crossing into Macedonia daily from Greece then whisked by train and bus north to Serbia and beyond.
The chief commissioner of Hungarian police, Karoly Papp, said police were readying six special border patrol units of an initial 2,106 officers, equipped with helicopters, horses and dogs, to be sent in depending on the situation on the Serbian border.
“They don’t have and will not get an order to shoot,” Papp told a news conference.
Saudi Arabia ‘could cut billions’ from budget amid plunging oil prices – report
August 26, 2015
RT
Saudi Arabia is preparing to cut billions of dollars from its budget amid a steady drop in crude oil prices, a Bloomberg report suggests. Reportedly, Riyadh is currently working with advisers to review capital spending plans and delay some projects.
“The government is in the early stages of the review and could look at cutting investment spending, estimated to be about 382 billion riyals ($102 billion) this year, by about 10 percent or more,” wrote Bloomberg, citing two people familiar with the matter speaking on condition of anonymity.
According to the sources, besides reviewing its capital spending, the Saudi government may delay or reduce some of its projects to save money. However, spending items such as public sector salaries would not be affected, the report claims.
The Saudi budget, which draws some 90 percent of its revenue from the petroleum sector, has been heavily hit by a 50 percent drop in oil prices and is expected to incur a deficit amounting to 20 percent of GDP in 2015, the International Monetary Fund has estimated.
“This is a response to the lower oil prices but also to the fact that capital spending has been growing strongly over the past few years,” Fahad Alturki, chief economist and head of research at Jadwa Investment Co., told Bloomberg while commenting on the report.
He added that though a cut in capital spending “will impact economic growth, the non-oil sector is not as reliant on government spending as it was 20 or 30 years ago.”
In the meantime, the Saudi Finance Ministry declined to comment.
Earlier in August, the Financial Times reported that Riyadh planned to raise $27 billion on the bond market by the end of 2015 to balance its budget, which had been prepared based on an estimated crude oil price of $106 per barrel.
As a result of the sharp recent dip, the price for Brent crude oil currently stands at $43.32 per barrel as opposed to over $100 a year ago, while the price of WTI Crude oil has dropped to $39.55 from over $90.
Saudi Arabia, which dominates OPEC, is thought to have played a key role in instigating the slump in crude oil prices. The biggest economy in the Arab world has been unwilling to cut its crude output. In June, OPEC confirmed it is not cutting output, which has even increased since last year from under 30 million to about 32 million barrels per day.
Who slipped? How fake report on ‘Russian soldier deaths’ in Ukraine set media on fire
August 27, 2015
RT
A Forbes report on alleged Russian army casualties in Ukraine citing a dodgy Russian website has sparked a media and Twitter storm. Some said Russia had “finally slipped” with the leak on its troops in Ukraine; others were baffled by the “fake publication.”
A Forbes contributor, Paul Roderick Gregory, published an article on Wednesday citing a Russian web source called “Delovaya Zhizn” (translated as Business Life), which was said to reveal “official figures on the number of Russian soldiers killed or made invalids in eastern Ukraine.”
The report, dated March 2015 and entitled “Increases in Pay for Military in 2015,” was altered, with the relevant information being removed, after the Forbes publication came out. However, the original copy was webcached by Google.
The cache shows that the website, which has articles on Russian finance, markets and leisure, claimed that the Russian government had paid monetary compensation to Russian soldiers who “took part in military actions in Eastern Ukraine.”
Without citing a source, the article claimed that as of February 1, more than 2,000 families of soldiers killed in Ukraine had received compensation of 3 million rubles (about $50,000) and those crippled during military action – a half million rubles (about $25,000). It added that another 3,200 soldiers wounded in battle had received compensation of 1,800 rubles for every day they were in the conflict zone.
The Forbes contributor accused “Russian censors” for “quickly removing the offending material.”
The Forbes report was picked up by Western media and independent journalists. The International Business Times reported that the Russian article had “accidentally published the leaked figures.”
An article by The Independent on Wednesday called Delovaya Zhizn a “respected news site in Russia,” and cited the head of the Russia and Eurasia Programme at Chatham House, James Nixey, who said that the report is a “nail in the coffin” in proving Russia is engaged in military action.
Another media outlet piling on was was Radio Free Europe/Radio Liberty (RFE/RL), which claimed it had received a response from some Anatoly Kravchenko from Delovaya Zhizn, who said the website had “received the casualty figures from relatives of dead servicemen as well as ‘insider information’ from the Russian Defense Ministry.” However, they added that the website’s representative had “declined to identify any specific sources.”
Western officials, including two former US ambassadors to Russia and to Ukraine and the US ambassador to OSCE, also retweeted the report
The publication sparked a Twitter storm with some western journalists, researchers, analysts and think-tanks giving their full trust to the source.
However, at a certain point the media storm came to a halt. Bloomberg’s Leonid Bershidsky concluded that the initial Delovaya Zhizn report was fake, questioning the URL, Bs-life.ru, and exposing a grammatical error (“v Ukraine” instead of “na Ukraine”).
AP journalist Nataliya Vasilyeva pointed out the ease of spreading fake information on the web.
“The ease of spreading rumors in the digital world is astonishing,” she wrote.
“Two days of Western officials retweeting a Forbes report quoting a Ukrainian web-site quoting a non-existent Russia news web-site re Ukraine,” she added.
“The main problem here is, of course, where was the Forbes online editor when the story was published, why nobody bothered to check sources?”
Indeed, the Russian State media watchdog, Roscomnadzor, has four registered media sources of that name on its website. All of them are listed as print publications – newspapers or magazines. Electronic media is not mentioned.
The Delovaya Zhizn (bs-life.ru) website, however, does not contain any reference to a print edition or mail subscription. Moreover, it does not detail its staff, its owner or founder, or any relevant contact information except for an online reply form.
RT attempted to contact the publication by phone numbers collected through open sources on the web, but received no answer by phone – or via the online form.
This is not the sole example of unverified information related to the Ukrainian conflict appearing on the web. However, few such “leaks” make it to big media.
In one of the instances, US ambassador to Ukraine Geoffrey Pyatt was caught posting unverified images on his Twitter feed in September 2014. The photos, which he said showed US-Kiev military exercises in Ukraine, had already been published in July 2014 and in October 2013.
In another case in April, Pyatt claimed that Russia’s military was continuing to expand its presence in eastern Ukraine. As proof, he posted a picture of a Buk-M2 missile defense system that he said was stationed in Ukraine. However, it turned out to be a two-year-old photo from an air show near Moscow.