Friday Fright Night

47
Fri, Aug 2, 2013 - 8:54pm

I was going to try to write a slightly funny, moderately informative post for today. Not another dark, downer of a diatribe. Perhaps something about why the UK seems to be amassing a silver hoard that is twice the size of all silver held in the SLV trust, or coping mechanisms of societies in other parts of the world before and during times of economic hardship.

Then I came across this (via ZH à from Michele Catalano):

“What happened was this: At about 9:00 am, my husband, who happened to be home yesterday, was sitting in the living room with our two dogs when he heard a couple of cars pull up outside. He looked out the window and saw three black SUVs in front of our house; two at the curb in front and one pulled up behind my husband’s Jeep in the driveway, as if to block him from leaving.

Six gentleman in casual clothes emerged from the vehicles and spread out as they walked toward the house, two toward the backyard on one side, two on the other side, two toward the front door. […]

They asked if they could search the house, though it turned out to be just a cursory search. They walked around the living room, studied the books on the shelf […], looked at all our pictures, glanced into our bedroom, pet our dogs. They asked if they could go in my son’s bedroom but when my husband said my son was sleeping in there, they let it be. […]

By this point they had realized they were not dealing with [trrrrrrsts]. They asked my husband about his work, his visits to South Korea and China. The tone was conversational.

They never asked to see the computers on which the searches were done. They never opened a drawer or a cabinet. They left two rooms unsearched. I guess we didn’t fit the exact profile they were looking for so they were just going through the motions.

They mentioned that they do this about 100 times a week. And that 99 of those visits turn out to be nothing.”

In later clarification, the Suffolk County PD in Yaphank, NY issued a statement:

“Suffolk County Criminal Intelligence Detectives received a tip from a Bay Shore based computer company regarding suspicious computer searches conducted by a recently released employee. The former employee’s computer searches took place on this employee’s workplace computer. On that computer, the employee searched the terms “pressure cooker bombs” and “backpacks.”

So THAT’S supposed to make it all right? Here are my issues with this picture:

  • The author’s husband was released (presumably fired) in April 2013 from the employer who ultimately reported the ‘suspicious’ searches. The alleged web searches had to have taken place before that date (and presumably after Marathon Day).
  • The employer seems to have waited ca. 3 MONTHS to contact authorities (this is conjecture, but based on the fact that 6 plainclothes detectives were dispatched, appears likely that the PD acted immediately and forcefully on the info). Patriotic concern? Employee contract/labor dispute?
  • The family in question allowed authorities access to search their home, yet despite this permission only a cursory scan was conducted. So what was the point of the visit?
  • ‘they do this about 100 times a week’

This is a relatively benign case, with an ultimately ‘harmless’ outcome of a frightened blogger, and an IT worker with a more ingrained understanding of the lack of privacy of using a workplace computer. No harm, no foul, right?

Some hypothetical/rhetorical questions:

  • WHAT IF the husband in question had denied the detectives access?
  • WHAT IF there had been a cooking implement of the sort in question sitting on the stove?
  • WHAT IF the inquisitive lawmen had found firearms in the home?
  • If similar ‘visits’ are carried out 100x per week, that equals about 20x per weekday. Let’s say it only takes an hour to do each one, and on average only 2 officers are sent. That’s still 4-6 full-time, year-round jobs doing nothing else, just for this county of 1.5M people.
  • Computer logs are ‘relatively’ tangible things, though of course are not infallible or immune to manipulation by malicious parties. What would have happened if a neighbor or co-worker had phoned in a tip (anonymous or otherwise) that he/she had overheard someone talking in an agitated manner about said cooking implement and high-speed/high-pressure oxidation processes?

Look, I realize that there are plenty of arguments to counter ANY concerned/worried/alarmist position. There is no definitive proof that the BoE leased/sold large amounts of gold into the market, thus any suppositions to that effect are off-the-wall loony. There are no court convictions involving the senior management of TBTF institutions, so the idea that they did/are doing anything illegal is baseless libel. There have been no criminal charges brought against high- or even mid-level law-enforcement officials, so there is NO reason to think any of them (let alone the entire establishment) might be infringing on laws. No war crimes tribunals, hence no war crimes. Individual, anecdotal cases of overreach, abuse of force, mistaken identities, negligence are supposedly just that – individual cases. Like the IRS made some ‘regrettable, individual mistakes’ in targeting specific groups and people. Like the DoJ seems to have suffered from an unfortunate string of ‘individual’ lapses in judgment regarding a wide and unconnected range of issues, from Mexican trafficking to investigation of journalists.

When I was younger, I never bothered to think too much about whether my country was ‘free’ (it most assuredly was not). The denial of free speech and all the other rights taken for granted in the US affected me only tangentially – and as I was growing up and became aware of these distinctions, the dictatorial regime melted away into irrelevance, and was replaced by supposedly democratic, free institutions. The era of ‘hope and change’ that apparently all societies are periodically susceptible to. After a few years, it became apparent that what had happened was not so much a liberation, as a re-labeling. The old thieves got new coats of paint, and the new thieves were bought off with the remaining (meager) wealth of the nation. Pretty soon, this new amalgamated group of people above the law began to fight among themselves, and to explicitly reinstate the arbitrary (extra)legal mechanisms of old.

The day I finally realized that any hope of a just, representative, honest society was gone happened on a bright, sunny July morning a few years ago. I was (ironically enough) on my way to an appointment at a fearsome and powerful governmental bureaucracy, around 7 AM. As I stepped out of my apartment into the balcony of the inner courtyard up on the top floor (I always hated the Panopticon-like effect of these buildings), I see something like this:

Now imagine, in the place of that red-topped cupboard, there stands a man in faded jeans, black T-shirt and ski mask. A sidearm strapped to one thigh, another in his hand pointed at a row of 3 people who are kneeling, facing the wall, with their hands clasped behind their necks, where the broom is standing. One is in underwear, one in pajamas, one in sweatpants. Another ‘gentleman’ in a black ski mask has a yellow T-shirt, brown cargo pants, a weapon in hand and is standing guard at the door of the apartment in the corner, which is open.

No identifying markings, no badges, not even an excess of (para)military equipment/gear/clothing that might put my mind more at ease that this is a police raid. For all I know, it could be a loan-shark collecting on a debt. Or a hit. Or a gang attempting to forcefully rob the owners/tenants of valuables – or even of their apartment.

By a quirk of fate, my exit to the gangway is silent and rapid enough that none of them look up. I slink away to the far end of the hallway, slip down the stairs and out to the street, frantically trying to think -- what to do? Did they see me, will they follow? If they are cops, why so few and without insignia? If they are NOT, I can’t stick around, but I don’t want to leave the residents to their fate – what if the real cops get there too late?

In the end I call the precinct from a payphone a few blocks away. Give the address, describe the situation, note the presence of arms and people being held against their will at the point of a barrel, ask if any raids were underway. The dispatcher says no, they are not aware of any police activity in the area at the moment, but they will look into it. No questions are asked. Nobody presses me further about details. Though it was a while ago and I am not sure I remember correctly, I think no one even asked for my name.

As far as I know, no other resident of the building (with around 60-70 apartments, half of which looked directly onto this scene) called the cops. By the time I got back from the bowels of the bureaucracy, having proven my non-offensive, law-abiding, useful tax-paying nature, all was well. Residents were bustling to and from work, and old lady was sweeping the courtyard, someone was taking a dog for a walk.

This is how it starts, how it has always started. And in almost every case in recent history (the last century or so) it is always LEGAL. The actions of the Schutzstaffel, Geheime Staatspolizei and later the Staatssicherheit, the Chrezvychaynaya Komissiya, those of the Securitate and the Mukhabarat – the list goes on. The powers and authority granted to security forces, representatives of the justice system (whether prosecutors or the courts themselves) are all eminently, collectively (and sometimes retroactively) enshrined in law or reasonable facsimiles thereof.

How long, before domestic cultivation of food-plants becomes a restricted activity, requiring government permission and subject to criminal prosecution? Ownership of projectile implements containing cylindrical inserts that originally worked with charcoal, sulphur and saltpeter (though now have more smoke-less components)? The willful dissemination of information deemed to be aimed at disrupting governmental policy? Where are we currently along these continua? What constitutes a ‘red line’?

And societies will take a LOT of this before realizing its inherently destructive effect on its members, wealth, liberty and freedom. As long as it’s SOMEONE ELSE being taken away, it’s of no direct concern to me. Chances are they had it coming. Probably some low-life. Should have kept their head down.

And IF after years, or even decades of oppression, blatant injustice, state-sanctioned arbitrary incarceration/torture/murder a society IS able to rise up, and attempt to throw off the yokes of servitude? Perhaps momentary, symbolic gains are made. Perhaps a few guilty (but nevertheless merely symbolic) parties are brought to justice.

Perhaps after a revolution or uprising a society is given a few years to breathe, to rebuild, to try to start over. But the temptation to institute (and the tools to build) an authoritarian society are ever-present, only waiting to be picked up. And picked up they inevitably are, as the cycle begins anew.

History is written by the victors. “It could never happen HERE” is a thought shared by many societies across the centuries – even (perhaps ESPECIALLY) after it already had. It is up to everyone to keep an eye on just what temperature the thermostat is currently set to.

(image credit: DonkeyHotey)

It seems to me that incredibly hard though it is, it’s still a LOT easier to prevent the noose of tyranny from tightening, than it is to remove it once it has established its grip in full. To a large degree, this depends on the degree of legitimacy of the state, and the degree of helplessness of the people as perceived by the populace.

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Aug 5, 2013 - 12:06pm

Alphabet soup

"A secretive U.S. Drug Enforcement Administration unit is funneling information from intelligence intercepts, wiretaps, informants and a massive database of telephone records to authorities across the nation to help them launch criminal investigations of Americans. Although these cases rarely involve national security issues, documents reviewed by Reuters show that law enforcement agents have been directed to conceal how such investigations truly begin - not only from defense lawyers but also sometimes from prosecutors and judges." https://www.reuters.com/article/2013/08/05/us-dea-sod-idUSBRE97409R20130805 The comments on the ZH version of the story are worth reading too.

redwood
Aug 4, 2013 - 4:43pm

bbacq

First we need to get people to use the internet for educational purposes. Too often I hear, and not outwardly spoken of course, is that the net serves baser needs...pornography, child pornography for self or distribution purposes, credit card theft,and predatory practices. Far greater use than most would think and more sinister.

I don't have a solution for that, only a disturbing awareness. Also the concept of "the blog" or blogging still has derogatory implications, as though info gleaned from blogging has inferior quality to "scientific" sources, again underscoring the portrayal of alternative media as highly inferior.

btw enjoyed your post and glad to see you back.

القراع عصفور
Aug 4, 2013 - 4:11pm

ribbit

(i agree with what bbacq said.)

bbacq
Aug 4, 2013 - 2:10pm

optimism...

Like the fellow at this link, I had reserved judgement on Assange. Like the fellow at this link, I made my decision after reading the interview with Eric Schmidt. I have no audio on this machine at the moment, so I'll have to catch up on this later... but didn't want to let it slide by on a thread about frogs and pots... the internet can (and is! hey, we are having this interaction, right?!) help us either hop out of the pot, or turn down the temperature, or both. The important thing is simply that enough frogs recognize that they are in a pot, not a pond. https://libertyblitzkrieg.com/2013/08/04/julian-assange-discusses-mainst... If the internet stays free enough, the rest will follow. Awake and spread the news. bb

Aug 4, 2013 - 1:48pm

@bbacq & RaRa

Good to see you out & about, bbacq. @ RaRa -- having narrowly missed the medical field myself, I have a lot of fond ( if hazy) memories from my younger days of drinking with medical & nursing students. Aside from law students, they were the group to take their partying most seriously. Cadaver jokes are funnier than one would think...

¤
Aug 4, 2013 - 1:08pm

bbacq

We'll said & nice to see you poke your head (and thoughts) in here.

bbacq
Aug 4, 2013 - 1:00pm

bbacq again...

Hi all. It's important to keep one's eye on the info-diet of the masses. At least, that's my excuse for slugging in front of the Pana-Plasma when I do. Last night it was a tough decision on the channel lineup, what with the 1964 classics "Bikini Beach" and "Muscle Beach Party" to keep me distracted with the prospect of Frankie Avalon's peninsula having some fun with Annette's funny cello (Newfie humour), but two channels down - "Apocalypse: The Rise of Hitler" was on, and stole my attention away. I was surprised to see this on the National Geographic channel, which I have come to associate with TPTB brainwashing. But here now was the story of the German frog being heated! And all the clever tactics used. I watched as first the French marched through Germany, riling the Ruhr natives, knocking off their hats and intimidating German civilians in the early '20s when Germany was failing to pay its WWI war reparations (can you say "bankers? I knew you could!"). Turns out that wasn't so bright by the French, but perhaps part of the plan? Then I watched as the Germans voted themselves right out of the democratic process. All it really took was some bad times and polarization of the people around two different potential "solutions" to the economic problems, very similar to what I now see occurring in the US and elsewhere. Hitler was quite clever, and only wanted two ministries in his first mandate, but these two had all local police under his mandate. Can you say "Homeland Security?" I knew you could. The first bright line that we must all draw and cross as good daisies is the personal one, the one where we become willing to share with all and sundry what we truly believe. And I mean everyone, while it is still safe to do so. At every checkout counter I mention banks, banking, money and currency to anyone in earshot. I find many people agree that the banks are too big and powerful, that inflation and unstable currencies are bad, that centralized governments are doing a bad job of things, that smaller and more local is where we need to go. These are people who would never, ever consider voting the way I have in my past. I refuse to let that divide us. One has to be willing to talk about the elephant in the room with everyone, and do so civilly, without resorting to invective and insult. Just the facts, ma'am. Start with your family, neighbours and friends. One has to be willing to let people know when they are being stupid, and to let them know that their stupidity is not their own fault. Russell: "We are born ignorant. It is education that makes us stupid." If one does not chase differences in opinion back to fundamental principles, then one is doomed to argue about superficialities as the train continues its slow-motion path of democracy-destruction. If we could just wake the switchman maybe train 102 could avoid a few hundred years of Romanesque decline. Bastiat had the dichotomy right 150 years ago. You either believe in freedom or you don't. The rest follows. best to all, bbacq

Aug 3, 2013 - 8:42pm

Moonless night Tue. Aug. 6th

If airstrike(s) should need to be launched... The less ambient light, the better. See also the post on ZH about impending civil war in Egypt providing opportunity for regionwide conflict to be instigated. High oil & inflation? Not the Fed's fault, those extremists in MENA are to blame.

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Dyna mo hum
Aug 3, 2013 - 7:11pm

That damn main stream media at it again....

On the hour on 1/4 hour on the half hour etc.... All I hear are warnings of embassy closings, warnings to travelers and on and on. The gov has rolled out the boogiemen again so I ask what are they trying to divert my/our attention away from this time? If the US gov. can,t secure their embassy's in assorted nations then close the damn building's and come home dammit. The band of fools that run this nation are despicable. Btw I feel safe here at my home for now. F---em

¤
Aug 3, 2013 - 6:51pm

Gold's Triple Threat

Gold’s triple threat – Gold Miners weekly recap

RJ Wilcox - Gold Miners Report | August 3, 2013

For those of you who do not follow basketball, you may not know what a triple threat is. The triple threat is the best position an offensive player can be in because he has all possible options available to beat his defender. He can shoot, dribble, or pass. I’ll get back to this.

Paper Market Troubles

However, since you are reading this, I will assume you follow the gold market. As such, you’ve probably read many recent headlines indicating that gold is in backwardation, GOFO rates are negative, gold exchange physical inventories are plummeting, and speculator short positions are the largest in COMEX history.

To put it mildly, when all of the above are taken together, they are suggestive of fairly strong physical demand and/or inadequate supply. The topics of backwardation and negative GOFO rates in particular have drawn thought provoking commentary from many distinguished gold market commentators.

Backwardation, using the London Bullion Market Association (LBMA) definition, is defined as a market situation where prices for future delivery are lower than the current spot price as a result of shortage or tightness of supply.

The Gold Forward Offered Rate (GOFO), again using the LBMA definition, is the rate that will induce contributors (i.e. bullion banks) to swap gold for US dollars. In a swap agreement both parties agree to return the swapped item at some date in the future.

The reason why these two topics have received so much attention is precisely because they rarely occur. And, when they have happened in the past, it has typically marked a major turning point in the price of gold.

Although we are eagerly waiting for history to repeat itself, which we will get to a little later, part of our discussion this week focuses on how these two rare and related phenomena are affecting the bullion banks.

The Bullion Banks

In simple terms, a bullion bank, much like an ordinary bank, holds gold on deposit on behalf of clients (like central banks) or themselves, and arbitrages the metal for profit while it is in their possession.

The four largest bullion banks are JP Morgan, HSBC, Deutsche Bank, and Scotia Bank.

Generally, bullion banks make money on gold by either lending it in the form of a swap agreement (earning the GOFO rate), selling a futures contract against the gold they own (earning the difference between the future price and the spot price), or selling gold in the physical market for a premium.

Whichever trade they choose is a function of which is the most profitable at the moment.

Currently the GOFO rate is negative, which makes the swap a relatively unattractive trade for bullion banks.

The GOFO rate has now been negative for an unprecedented 19 trading days and this has only happened on two prior occasions and then for a maximum of only 3 trading days.

Also, because of backwardation in certain delivery dates, selling futures contracts against gold, which the bullion banks may or may not have, is also unattractive.

Therefore, given the current gold market conditions outlined above, we think some important bullion banks are currently short physical gold and trying desperately to cover by sourcing as much physical gold as they can get.

There is anecdotal evidence of this in the Commitment of Traders Reports (COT) and the Bank Participation Reports (BPR). According to the BPR, during the 1st half of the year, the US bank category position changed from a net short position of 70,000 to a long position of 30,000 reflecting a change of 100,000 contracts.

This is an unprecedented shift in such a short period of time and is corroborated by a decline of 113,000 short contracts in the COT reports over the same period.

There are only 4 US banks indicated on the BPR report, and although they are not named, knowledgeable commentators indicate that JP Morgan is the primary actor in this massive shift from the short to long side of the ledger.

But please, keep this in mind; although the U.S. bullion banks are now net long, they are net long in paper futures contracts and not physical metal.

Unfortunately for them, some futures contracts dates are in backwardation and thus, not very profitable. To get their hands on physical gold, they have to jump in line with everyone else or turn to their favorite uncle.

Why isn’t the Gold Price Rising?

This brings us to the central question being asked by many observers in the gold market. If current physical demand for gold is so strong that it is causing a breakdown in the paper markets for gold, then why isn’t the price rising?

As we pointed out in last week’s recap, entitled “Gold Price Defies Law of Supply & Demand”, the gold price isn’t rising because there is massive selling coming from official government held gold reserves.

This assertion is supported by a comprehensive analysis prepared by Sprott Asset Management on behalf of their clients. It is based on official government records and research from respected industry groups.

We believe the decline in the gold price is a result of a combination of large scale shorting operations by major bullion banks along with large scale dishoarding of official U.S. gold holdings that have overwhelmed historic demand during the 1st half of this year.

This week, additional information hit the newswires from

https://www.mining.com/web/golds-triple-threat-gold-miners-weekly-recap/

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Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
8/28 9:45 ET Chicago PMI

Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
8/21 9:45 ET Markit flash PMIs July

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

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