Google threatens to leave China after Massive Cyberattacks - tried to access Gmail accounts -

Reading - Google threatens to leave China after Massive Cyberattacks - tried to access Gmail accounts -

January 12, 2010 (Computerworld) Google today said that a "highly sophisticated and targeted" attack against its network last month originated in China, and tried to access the Gmail accounts of Chinese human rights activists.

In a blog post Tuesday, David Drummond, Google's chief legal officer, said that attacks have forced the company to "review the feasibility of our business operations in China." Google, continued Drummond, is "no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all."

The end result of those discussions, said Drummond, may be that Google shuts down its search engine and close its offices in the People's Republic of China.

"This is a bold and a very difficult move on [Google's] part," said Leslie Harris, the president and CEO of the Center for Democracy & Technology (CDT), a Washington, D.C.-based civil liberties group. "But with the revelations that there have been major cyber attacks aimed at human rights activists, both in China and in the West, it's hard to see how Google could have remained silent."

According to Drummond, Google was one of at least 20 large companies that were targeted by massive attacks in December. In Google's case, the attacks resulted in the theft of some company intellectual property.

More troubling, said Drummond, was that the attacks were aimed at accessing the Gmail accounts of human rights activists in China. Gmail is officially unavailable in the country, but activists and others use anonymous proxies to circumvent that rule.

"We have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists," said Drummond, who added that with the exception of two accounts, those attacks had been unsuccessful. The message content of those accounts was not compromised, Drummond claimed; instead, only some information, such as subject lines and the date the account was created, was accessed.

Drummond also said Google had discovered that the Gmail accounts of dozens of U.S.- and Europe-based advocates of human rights in China had been "routinely" accessed by unauthorized users.

"We have taken the unusual step of sharing information about these attacks with a broad audience not just because of the security and human rights implications of what we have unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech," said Drummond.

Google launched its Chinese-language search engine at google.cn in early 2006, and at the time spelled out its position on business in the country. "We will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China," the company said four years ago.

The disturbing nature of the attacks, as well as what Drummond called "attempts over the past year to further limit free speech on the Web" by Chinese authorities, gave the company pause, then led it to a decision.

"Any company in China has to constantly monitor the situation," said Harris of the CDT. "And at some point, it may be untenable. Google made that very clear when it went into China. It appears that Google has decided that the risks to their users and their own values outweigh the benefit of operating in China."

Harris declined to speculate on what impact a Google withdrawal from China would have on other technology firms that operate in the country -- both Microsoft and Yahoo, for instance, have a presence there -- but said she expected Google to face resistance if it did pull out. "I can't imagine this was an easy decision for them," she said. "They're certain to get push-back from some shareholders."

If Google does end up closing shop in China, Harris acknowledged that it would be a setback for the idea that Western companies could change China's position on issues such as human rights. "I don't think that [this idea] has had the impact we would have liked, but it has had a huge impact on access of information that China's citizens now have," she argued.

Like Drummond of Google, Harris noted that recent moves by the Chinese government have been hard to stomach. "They've become increasingly shrill about what a company makes available, who can have blogs and domains in the country," she said. "They've been piling on the restrictions."

But the battle isn't over, even if Google leaves, Harris said. "The fact is, [the Chinese government] cannot control all information. That's the hope we've always had, that at some point technology wins."

Drummond did not set a timetable for the discussions Google wants to have with Chinese authorities, or, failing a settlement agreeable to both sides, a deadline for any decision to withdraw from the country and shutter its search site.

Read more - http://www.computerworld.com/s/article/9144139/Google_threatens_to_leave_China_after_massive_cyberattacks?source=CTWNLE_nlt_breaknews_2010-01-12

JP Morgan: Largest Provider Of Food Stamps In U.S. - Really? - Really! -

Watching -

JP Morgan: Largest Provider Of Food Stamps In U.S. - Really? - Really! -

Source: Bloomberg TV

China's 2009 Trade Surplus Falls A Record $100 B - no wonder that the Chinese r buying everything it can stockpile -

Reading - China's 2009 Trade Surplus Falls A Record $100 Billion - no wonder that the Chinese government is buying anything and everything it can stockpile

After posting a record crude-oil import month in December, as well as the second highest iron-ore import month in history, China's program economy is roaring back to life, even if the imports are actually sitting in full warehouses, used to build empty cities that consume negative electricity, make washing machines that never launder anything except the government's flawed economic statistics, and create cars that somehow use up ever-less gasoline. Of course, when the government has trillions in increasingly worthless excess dollar foreign reserves that have to be used up for something, it is no wonder that the Chinese government is buying anything and everything it can stockpile, and that can't be devalued by Tim Geithner, hand over fist. As for exports: courtesy of the dollar peg, which makes China's exports as cheap as the US' (assuming the latter had much of anything to export besides financial innovation), China had no shortage of counterparties to purchase its $1.2 trillion in 2009 exports. Yet despite all this, China's trade surplus plunged a record $100 billion, or 34%, to $196 billion from 2008's $296 billion.

[1]

Notably, in December China's crude-oil imports hit a record 21.26 million metric tons, or 5 million barrels per day. It is good that at least for one country the "great recession" never happened. In 2009, China imported 14% more oil than in 2008, for a total of 204 million tons. But the real kicker was in iron-ore imports which was 62.16 million metric tons in December, 22% more than November, and an unbelievable 80% more than a year earlier, and the second highest ever recorded. For all of 2009 628 million tons of iron were imported, 41.6% higher than in 2008. Those empty cities apparently really need more peers. And one wonders why Australia's (5.4% more imports in 2009) and Brazil's (5.3% less) economy are humming: it takes a lot to provide the raw materials to build the biggest bubble in the world.

The simple observation is that instead of having to finance the US consumer's continued spending binge by buying hundreds of billions in Treasuries in 2009, China was let off the hook by the Federal Reserve, which did all of its mandated purchase instead. So with all the excess money China went and stockpiled, stockpiled, stockpiled. Now the only question of whether the required end-consumer demand will ever materialize will determine who is correct in the China bubble debate: Chanos or Rogers. As the US consumers are tapped out (save for some Spanish tourists who apparently can't wait to purchase g-strings at A&F), China better hope its own middle class will use its savings to buy everything the government has already made and built, and counted (hopefully not double or triple) in its GDP calculation.

On the other hand, despite having a savings rate that Americans could only dream of, China is also gripped by gambling fever: who really knows what the domestic balance sheet looks like. Yes, having cash is great, but if the liability side of the consumer balance sheet has 0 equity (or only equity in a massively inflated stock market) and the rest are cheap loans, which the government handed out freely in 2009 to the tune of 11 trillion renminbi, then all bets really are off when the profit taking inevitably begins (as it always does).

Here are some more charts that demonstrate why the traditional Chinese model of an export-led economy may be in trouble if the US and EU consumers don't come back (as a reference point, exports to the EU dropped 19.4% or $236 billion, while those targeted at the US sank by $221 billion or 12.5%).

The chart below demonstrates the phenomenal rise in China's trade surplus, which was effectuated primarily on the backs of the US and EU consumers, who had found themselves big spenders in the years after 2003 courtesy of the HELOC piggybank, a surging stock market, and low interest rates.

[2]

What is very amusing on the above chart is the massive surge in China's trade balance in the months following the Lehman bankruptcy. Truly with the rest of the world shut down for the subsequent quarter, China was exporting excess billions of "stuff" to somebody. Who that somebody was, would be interesting to find out. Had the export data been normalized for the October-February period, $85 billion in GDP would have been removed from the Chinese economy. Yet what is glaringly obvious is that China will have a very tough time at recreating the same surge in the trade surplus in 2010 and onward, especially if calls for renminbi appreciation continue growing ever louder.

Source URL: http://www.zerohedge.com/article/chinas-2009-trade-surplus-falls-record-100-billion

Ron Paul On Bringing Transparency To The Fed - hammers home point of why the Fed needs to finally be accountable -

Watching - Ron Paul On Bringing Transparency To The Federal Reserve - Ron Paul hammers home the point of why the Federal Reserve needs to finally be accountable

Watch here - http://fora.tv/2009/06/24/Ron_Paul_Bringing_Transparency_to_the_Federal_Reserve#fullprogram

Twitter, the popular but money-losing microblogging service, is hiring engineers and specialists who can help turn it into a money-maker.

Reading - Twitter, the popular but money-losing microblogging service, is hiring engineers and specialists who can help turn it into a money-maker.

SAN FRANCISCO (Reuters) - Twitter, the popular but money-losing microblogging service, is hiring engineers and specialists who can help turn it into a money-maker.

The 2-1/2-year-old Internet start-up, whose short text messages or "tweets" have become a global social phenomenon, is building up a team focused on generating revenue with a new range of yet-to-be launched products, judging by job postings on the company's website.

Among the 26 job openings listed on Twitter's site, four are specifically identified as being devoted to "monetization." Striking licensing deals are key responsibilities for two other jobs.

"Twitter is looking for new members of our technical staff to work on cutting edge monetization projects," several of the postings said.

The move to invest in such projects signals that making money is becoming a bigger priority at Twitter, as it seeks to evolve from being one of the Web's fastest-growing social media firms into a self-sustaining online business.

"The company has crossed into the phase where monetization matters. They're ramping it up," said a source close to Twitter who did not wish to speak on the record about its finances.

A Twitter spokesperson said co-founder Biz Stone was not immediately available for comment. The company has about 120 employees, she said.

Tweets, which are limited to 140 characters, have grown into an established communications medium that has played a key role in world events such as the post-election protests in Iran last summer.

"They know they're here for the long term now, so they need to turn on these monetization engines," said Altimeter Group analyst Jeremiah Owyang.

Twitter, a privately held company, does not report earnings, but its website says: "While our business model is in a research phase, we spend more money than we make."

The company spokesperson did not confirm if that is still accurate.

Twitter struck deals in October -- widely reported to total $25 million -- to license its data feed to Google Inc and Microsoft Corp, allowing tweets to appear within search results on the companies' Internet search engines.

The job postings make it clear that generating revenue beyond the licensing deals is one of the 2010 priorities for Twitter, said Altimeter's Owyang.

Twitter, which recently moved into a larger office space in San Francisco, had 19.4 million unique visitors to its U.S. website in November, according to comScore, up sharply from the 1.5 million visitors a year earlier. Many industry watchers believe the actual number of worldwide Twitter users is much higher, since many people access the service through third-party applications instead of the website.

In September, Twitter raised $100 million in a move that valued the company at $1 billion, according to a person familiar with the matter, from backers including mutual fund giant T. Rowe Price and private equity firm Insight Venture Partners.

Twitter executives have said in the past that the company is interested in offering premium services, such as analytic tools for certain customers, and that it was exploring ways to integrate advertising into the service.

According to the job postings, the company is seeking engineers to build out the infrastructure and front-end features to support monetization systems that include "customer applications and reporting."

A posting for a product marketing manager for monetization said the person would focus on "enhancing business users' understanding of the value of Twitter."

Aspartame: Sweet Misery A Poisoned World - This is the movie that Pepsi and Coca Cola don't want you to see.

Watching - Aspartame: Sweet Misery A Poisoned World - This is the movie that Pepsi and Coca Cola don't want you to see.

There is no Economic Recovery Happening - Economic Stability and Recovery = Credit Expansion - We cannot recover until we purge the excess debt

Reading - There is no Economic Recovery Happening - Economic Stability and Recovery = Credit Expansion - We cannot recover until we purge the excess debt from the system.

Look folks, this is really quite simple.

Economic Stability and Recovery = Credit Expansion.

We cannot recover until we purge the excess debt from the system, and the longer we take to do that, the longer the pain will last and the worse it will be.

President Obama and Tim Geithner know this - that's why they are constantly harping on banks to "lend more."

Well, they may want banks to lend more but the people are fed up with being debt slaves and are borrowing less.

Today, we got the latest from The Fed on this subject:

Consumer credit decreased at an annual rate of 8-1/2 percent in November. Revolving credit decreased at an annual rate of 18-1/2 percent, and nonrevolving credit decreased at an annual rate of 3 percent.

I have updated the charts, and this is where we are as of November:

Non-revolving debt (basically auto loans) has pretty much stabilized since mid-year. But consumer revolving debt - credit cards - continues to accelerate in its rate of decline.

The longer-term view looks like this:

These rates of decline are unprecedented and they are not slowing down.

The drop in credit card debt outstanding is on the largest on record since The Fed started keeping those records in 1943!

Consumer recovery?

There is none!

It is axiomatic that you can pump yourself full of speedballs (e.g. government spending) and stay up for days at a time. It is also true that if you do too many speedballs you will have a heart attack and die, and there is no way to know precisely which is the "one too many" until you shoot it - at which point it's too late to change your mind!

The so-called "recovery" has been driven by pump-priming, which has had at its root one primary intent - to drive citizens into herd behavior and get them to spend more and more (that they don't have!)

But at the same time this has been the message credit card rates have been ramped and lines slashed. So now Joe Six Pack is faced with a 30% interest rate on his credit card - if he has any open line left!

There is no possible way for this program to work, since the entire problem originally - what began this recession - was people that were unable to make their debt payments in the first place!

Small business will not hire until their debt load comes down to a reasonable level. This will take literal years if we don't quit trying to prevent the contraction of both asset prices and credit levels. In the mean time millions of Americans will remain in destitution!

There is no way to avoid the bankruptcy of those firms and individuals who are over-levered. The best solution (take the pain now!) will not prevent the bankruptcies, but it will get them over with and let the nation begin to emerge from the morass within 12-18 months. For every month we keep trying to prevent the liquidation of insoluble debt we add months of additional time to that required to resolve the bust and deepen the amount of pain that must be suffered, since all we are doing is adding more debt upon existing debt.

It is time for Washington DC, including The Fed and Congress along with President Obama to embrace the facts - we must finish the de-leveraging that is necessary to return the citizens and corporations of this nation to fiscal health. At the same time the government must stop spending twice what it takes in in taxes.

We have consumed too many speedballs, our heart rate is now 160, and if we don't cut it out the bond market is telling us that we are about to have a fatal heart attack.

Read more - http://market-ticker.denninger.net/archives/1832-There-Is-NO-Economic-Recovery-Happening.html

Dr. Ron Paul and Steve Forbes discuss what is encompassed by the congressman's bill to audit the Federal Reserve

Watching - Dr. Ron Paul and Steve Forbes discuss what is encompassed by the congressman's bill to audit the Federal Reserve

Dr. Ron Paul and Steve Forbes discuss what is encompassed by the congressman's bill to audit the Federal Reserve.

Steve Forbes: What precisely will your bill on auditing the Fed do and not do? Let's just clear that up.

Paul: As a matter of fact, it's a pretty weak bill when you think about it.

Forbes: It seems pretty mild.

Paul: But from their viewpoint it is horrendous because we know what they've been doing. You know? And they don't want us to know what they've been doing. The big argument has always been they don't want transparency because they'll lose their independence. And independence means secrecy. If they lose their secrecy then the people and the Congress won't know what they've been doing. Who gets bailed out at what price? ... I put an explicit statement in there that we have no intention of monitoring monetary policy even though I have different views. But, you know, when you think of it, Bernie Sanders was a cosponsor in the Senate. He and I don't see eye to eye on the market. But we see eye to eye on transparency. So we wouldn't agree on monetary policy, but we agreed on this bill. But in order to clarify that Bernanke would say, "Well what we don't need is Congress coming in the day after we have a FOMC meeting and finding out who said what and why because everybody would be hesitant." And one of the arguments is, "If Congress had anything to do with this, they'd keep interest rates too low too long."

Read more - http://www.forbes.com/2010/01/08/federal-reserve-value-intelligent-investing-ron-paul.html

Venezuela devalued its currency by half - to reduce imports that aren’t strictly necessary

Reading - Venezuela devalued its currency by half - to reduce imports that aren’t strictly necessary

CARACAS – President Hugo Chavez, harried by recession and declining popularity, announced a major currency devaluation late Friday to shore up government finances and stimulate economic growth before key elections this year.

The move cuts Mr. Chavez's two-year-old "strong bolivar" currency by half – to 4.3 per dollar from 2.15 per dollar – for most imports and transactions. The central bank will also subsidize a stronger 2.6-per-dollar rate for imports of food, medicine and other essential items, Mr. Chavez said.

The move reflects the increasingly difficult economic and political trade-offs faced by Mr. Chavez, who has been in power for more than a decade and veered the country's economy sharply to the left through steps like nationalization of key industries, rampant government spending, and currency and price controls.

While those unorthodox policies can work for a few years, they usually set the stage for deeper problems down the road – troubles which have started to surface and which led to the currency devaluation. The move is also a humiliating turn for a currency renamed the "strong bolivar" two years ago, when Mr. Chavez chopped three zeros off the old currency and declared the beginning of an era of monetary fortitude.

The staunchly anti-U.S. leader is gambling that the benefits of a weaker currency will offset faster inflation, which threatens the purchasing power of his mostly poor backers. Finance Minister Ali Rodriguez said devaluation, which makes the price of imported goods more expensive in local currency terms, may add 5 percentage points to the 27% inflation rate – already among the fastest in the world.

In Mr. Chavez's favor, the measure helps narrow a growing budget shortfall, could provide limited relief to a moribund local industry, and instantly gives his oil-rich government more local currency to spend per barrel of oil exported by the state petroleum company, PDVSA. That's a key consideration with Congressional elections looming in September.

The 55-year-old former soldier's popularity has slid amid corruption scandals, a shrinking economy, rising crime and shortages of food and electricity. Increased spending could paper over some of these problems and boost Mr. Chavez's popularity.

Devaluation brings "more room to increase public spending as way to spur economic activity," says Maikel Bello, an analyst with the Caracas-based research firm Ecoanalitica.

This year's congressional elections are especially important because, after previously boycotting some elections to protest Mr. Chavez's growing power over democratic institutions in Venezuela, traditionally fragmented opposition parties are making a push to dramatically improve their representation in Congress.

For years, Venezuela has been able to defend an overvalued currency thanks to currency controls. Venezuelan citizens and companies can get dollars at the official rate only with government permission. That has led to a thriving black market, where those who don't get government permission buy the U.S. currency. Even the Venezuelan government uses the black market to some degree, economists say.

On Friday, that black market rate stood at about 6.25 per dollar – well below the former official rate of 2.15 and still below the new rate of 4.30. Economists say one of the reasons for the move was an attempt to deflate the black market, a catalyst for inflation that has also spawned a frenzy of schemes to defraud the central bank of dollars.

Economists will be watching the black market rate on Monday to see whether the devaluation was big enough to cause Venezuelans to go through the legal route to get dollars or whether they will keep buying them at the unofficial rate.

In theory, the devaluation could fortify Mr. Chavez on a range of fronts. Announcing the devaluation on state television, Mr. Chavez predicted that a weaker currency would breathe new life into a domestic economy that has become almost totally dependent on imports for everything from beef and milk to automobiles during his 11-year presidency.

Devaluation "will give a boost to the productive economy, will stop imports that are not strictly necessary and will stimulate exports," Mr. Chavez said.

The measure may buttress the banking system, which has been rocked by the closure of several institutions amid an embezzlement scandal. Many Venezuelan banks head into the devaluation holding large stocks of dollars.

Holders of dollar-denominated bonds issued by Venezuela and PDVSA will be encouraged by the move. Devaluation narrows Venezuela's financing gap to around 3% of economic output from around 7%, according to Royal Bank of Scotland economist Boris Segura.

"This is good news," said Mr. Segura.

However, the devaluation does little to assuage the deeper problems plaguing the Venezuelan economy, economists say.

Foremost, devaluation by itself is not enough to revive a domestic manufacturing base that's atrophied amid a hostile operating environment. Few investors are willing to brave Venezuela's maze of price caps, currency controls and the ever-present fear of nationalization.

Higher inflation from the move will also keep chipping away at the value of the bolivar, even at its new peg.

What's more, by keeping a subsidized dollar rate for importing food, medicine and essential items, Mr. Chavez removes any incentive for Venezuelans to produce what they need most. It will almost certainly remain cheaper to import beef from Brazil, for example, than to produce it.

The fact that Venezuela has ceased to produce meaningful amounts of food, medicine and other basic goods under Mr. Chavez puts his government in a Catch-22 bind. Mr. Chavez can't use devaluation to stimulate production of the most essential products because doing so would instantly make the imported versions too expensive for his mainly poor constituents.

Official devaluations are nothing new for Venezuelans, with many getting their first taste of currency controls in 1961. The peg imposed then was kept for 22 years but a decline in oil revenue forced the government to devalue in 1983, marking the beginning a downward spiral that included several adjustments to the foreign currency rate. A devaluation in 1994 amid a deep economic crisis spurred a wave of popular unrest that Chavez eventually tapped to win the presidency five years later.

Mr. Chavez is returning Venezuela to an official dual-exchange rate last tried during the economic turmoil of the 1980s. Dual exchange rates around the world are associated with corruption by bureaucrats who decide which businesses get the preferential rate, and by importers who have an incentive to falsify import invoices.

It also adds to general confusion. Venezuelans will wake up Monday to a country with three exchange rates, if you include the black market rate.

The devaluation is a humiliating turn for a currency renamed the "strong bolivar" two years ago, when Mr. Chavez chopped three zeros off the old currency and declared the beginning a of an era of monetary fortitude.

But the currency became grossly overvalued amid galloping inflation and government spending. Pressure to devalue rose as the bolivar plunged to around of third of its value on the black market.

In a bid to stem central bank dollar losses amid the black market crash, the government restricted sales of dollars. But that only made things worse, by spurring the black market to new heights and punishing companies, such as importers, that need those dollars to do business.

"Companies had frozen their activities because they couldn't buy dollars at the official rate," said Pedro Palma, an economics professor at IESA business school in Caracas.

Mr. Chavez maintained unfettered access to dollars for importers of staples who supplied the government's subsidized food markets. But even that backfired. Late last year, the government jailed the nation's biggest such importer, billionaire Ricardo Fernandez. In part, he is accused of using access to dollars to enrich himself.

Mr. Fernandez has denied wrongdoing.

Read more - http://online.wsj.com/article/SB126305109903923235.html?mod=rss_Today's_Most_Popular

RIP Gumby - Gumby Animator Art Clokey Dies at 89 in California -

Reading - RIP Gumby - Gumby Animator Art Clokey Dies at 89 in California -

Art Clokey poses with a Gumby doll in 1995. (AP photo)

Clokey first molded Gumby for a surreal student project at the University of Southern California called "Gumbasia." That led to his making shorts for the "Howdy Doody Show" and several series through the years.

LOS OSOS, Calif. - Gumby animator Art Clokey, whose bendable creation became a pop culture phenomenon through countless satires, toys and revivals, has died at age 89.

Caretaker Chrisanne Wollett Clokey says Clokey died Friday in Los Osos on California's Central Coast.

Clokey first molded Gumby for a surreal student project at the University of Southern California called "Gumbasia." That led to his making shorts for the "Howdy Doody Show" and several series through the years.

He said he based Gumby's swooping head on the hairdo of his father, who died when Clokey was nine.

Clokey also created the moralizing and often satirized claymation duo "Davey and Goliath."

Eddie Murphy brought a surge in Gumby's popularity in the 1980s with his send-up of the character on "Saturday Night Live" as a cigar-smoking primadonna.