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Wednesday, January 21, 2009

In other bad news...

Inauguration Day looked great on television -- I still can't believe we're saying "President Obama" -- but in addition to Portland's ugly, dark story, we also had the largest credit card security breach in history and a rout of a day on Wall Street. Where's the bottom for the Dow? We bailed at $9200 and said we wouldn't even think of getting back in at above $7000 for a year or two. Yesterday's close was $7949.

Comments (12)

Starting at 14,000, I'd guess that when three-fourths to ninety percent of the Dow's value has evaporated, there might be a bottom in there somewhere. There will be some dead cat bounces before then, 'cause it's a long flight of stairs we're falling down.

So you're thinking $3000? Does that take into account hyperinflation?

While the Dow's loss is extremely, extremely painful to those of us with considerable exposure in 401K, 403B, and other forms of defined contribution plans, the more worrisome piece is the hack job done on Heartland. I'm deeply concerned about information security and with the major push for electronic health records, the thought that the same level of (lax) security will be applied is frightening beyond measure. What could possible be done to assure health consumers that their medical data won't be subject to the same risks that credit data are routinely subjected to. I realize that cc data are more profitable to steal, but that is trivial compared to the sanctity of my health information. The day that someone can wrap a secure double or triple tunnel around a digital health record will be the day I start supporting a portable, digital health record. Until then, I'll keep on supporting that old-fashioned record either digitally (but entirely locally) stored, or on paper. This doesn't mitigate the risk from any employee with an ax to grind, but I'll take my chances there.

Good day for such announcements
Hardly anyone was paying attention.
Now it is all yesterday's news.

Yesterday was one of the few days it was a real drag to be a Portlander!

I wish we would have bailed at 9200 ;(

Serious question: Why so much concern about credit card data being stolen? All credit card companies and most banks have liberal policies when it comes to covering fraudulent charges. I've had my debit card stolen from the mail and they drained $700 from my checking account in less than a day. The bank reimbursed me within 24 hours of reporting it. My wife had her credit card number stolen, and they ran up $1,500 in bills, which were immediately reversed and a new card arrived within 2 days.

There is a serious economic cost to all this fraud, so to the extent we can reduce it that's a good thing. But in terms of individual liability, true identify theft is rare. There are too many other bad things that are more likely to happen for me to get worked up about credit card theft.

re: concern about credit card costs. My concern was not about theft of credit card information but the analogy with potential losses of health care information. Nevertheless, the concern with the loss of credit card information is that regardless who ends up carrying the losses for thefts of this kind, *everyone* ultimately pays. We can hardly be unconcerned about this problem today given the massive fraud, theft, incompetence, and greed surrounding the whole financial system. Do we simply add this to the tab?

Hey Big Al - was your bank WaMu by any chance?

Yes and No: my reading about financial collapse leads me to think that we don't get the hyperinflation until the deflation has really wreaked havoc first. THEN we get to experience a German/Argentinian/Zambian style hyperinflation.

We're about to see a really big wave of superbank failures and nationalizations (whether honestly named or not) and there will be very little credit for anything.

Worse, even if Obama listens to Krugman on the size of the "stimulus," (bigger is better) he's got it slotted to things that don't produce wealth but, rather, cost money to maintain. (Roads and bridges produce a lot of wealth in countries where there are few roads and bridges; in the US, adding more capacity for cars and trucks adds no wealth-creating capacity. Instead, it just means creating a bigger maintenance chore when we can't afford to maintain what we have now.)

And every dollar spent on stimulus needs to be as potent as possible in terms of going for something that actually adds enduring value or cutting costs over the long term. Given that the bulk of our trade deficit is spent chasing oil and natural gas, the best thing we can do with the money is spend it on things that reduce or eliminate demand for these fossil fuels. Reducing energy demand confers a double economic benefit -- there's the immediate multiplier from the spending and there's the long-term improvement in our finances from reduced need for foreign exchange.

I suspect the dollar will soon no longer be the world reserve currency, so we're going to find out the hard way what it means to have a laughable currency -- I think "Deso" (rhymes with peso) might be a good name for the currency formerly discussed as "sound as the dollar."

So with such a shifting metric, it's hard to put a number on what the Dow will be at "the bottom" -- we might well be in for a decades long plateau in the 3,000 - 5,000 range or, conversely, the Dow might actually reach or exceed the predicted 36,000 --- but bread is $100 a loaf.

There's a big cost to fraud, agreed. But there's a bigger economic cost if, out of fear, people stop using credit/debit cards for purchases and return to a cash or check economy. That's the reason the costs have been socialized (i.e., spread to everyone) instead of individualized. If I had to pay the $2,200 cost noted above for the fraudulent purchases, I would have stopped using electronic purchasing.

Driving is a good analogy. There is a huge annual cost from accidents -- car repairs, time lost from work, bodily injury, death. But the benefits of a mobile society far outweigh the costs, which is why we socialized those costs through insurance. Even though you're at risk of property and personal injury every time you get in your car (far greater than your risk of identity theft), we don't freak out about driving. Fox 12 News doesn't run sweeps week specials called "Car Crashes: Are you at risk?"

Our risk analysis with regard to "identity theft" has become very skewed.

A totally 'invested' friend asked me (being a 'forecaster') last summer what the Dow was going to do, and I said it'll be 9000 by Christmas, at year-end. He bristled and argued and denied, and explained all the details he knew and what 'touts' were saying on 'Business TV' that I didn't know, and insisted my crystal ball was broken and he'd better disregard it. (He's right; all I know is we are rapidly using up all the oil on the planet. Most things I 'foresee' are simply extensions predicated from that premise.) Anyway, it was a lucky guess and DJIA was around 9000 at year-end.

He hates when he tells me I'm wrong but it turns out I'm right, and then he has to come back and eat his words. It seems to me I lose a lot of friends who don't come back facing the first order of business to take back the words they left me with. Sometimes I just lie and say stuff I don't truly believe is going to happen; but instead saying whatever agrees with their words, so we can both be wrong and stay friends. in misery loving company.

However, this friend is dear, and as this year started we rejoined and he asked what the DOW is going to do. (He'd lost 20% ... that was what he said, anyway ... of his 7-figure 'invested.') I said it is going under 4000 and close to 3000 by this summer. So I reiterate that here ... dear friends have already paid me for it ... I'm aware here that nobody asked me.

The personal data thefts are all being done by the spook troops -- FCBIIA (FBI-CIA merged, sprinkle on some NSA if you will). As the comment said, 'actual embezzlers copying financial privacy to get in your credit and take it, robbing you blind, is rare.' (Verbatim: "true identify theft is rare.") Putting emphasis here on rare. Like, a larger probability is you winning the lottery. Besides, what credit or cash have you got that's worthwhile for a "true" thief to get at? ... be careful not to flatter yourself ... self-flattery being the main cause of paranoia.

Wayne Madsen (Report .COM, subscription req'd ... he's ex-NSA, btw), compiles a master list of all reported massive identity thefts, since the 'bad intelligence' Chimp was installed in The Fright House office of oversight for such things. In the total listed as of today, more than 500,000,000 Americans have been had their personal (identity) data thieved by copying, (from 300,000,000 Americans, showing a big bunch of it was done in duplicate, triplicate, etc.)

The copied ('stolen') information is being fed into the data storage bank of the Total Information Awareness Program, (you probably heard about, in Poindexter's purview), which Congress expressly de-funded, (just like it voided Raygun's aid to the Nicaraguan Contras), but TIA got slush-funded under black-lined items of congressional oversight, (just like Congress bought Raygun some missiles he sold to Iran and kept the money to give to the Contras, hush-hush slush ... btw, Raygun wasn't in charge of his Office or his brain those 8 years we saw him on TV posed there -- creepy Veep Bush was, running the show ... who also happens to be, (then and now), King of the CIA), and TIA got renamed, which is Secret, and got operational inside the NSA, which is Secret, and which is what many of Madsen's past colleagues still working there tell him. And Madsen tells Subscribers Only, including me, and I'm telling you, here.

So the identity data is in FCBIIA-NSA Secret memory banks of approximately every American (plus ... are you ready for this? ... a billion, let's say, (though Madsen lists), non-Americans' identity data 'stolen' in other countries, mainly Mexico, Canada, South America, and Europe/Interpol; and quite small percentages of Indians and Chinese)[1], and you know what? the FBI has NOT investigated and solved a single case of laptop/CD/DVD/hard drive copying of pilfered databases containing records on the scale of 100,000. Inspector Clouseau has said those sneaky thieves amazingly somehow always know which computer or CDpouch has the database that some firm's employee took home overnight in which car parked inadvertently unlocked in the driveway, or parked down the street from the diner only during lunch hour.

If you've followed up to here, you might expect that credit information is sort of the minimal importance in identity data that's (already) copied. More telling of your or my 'identity' is the transaction data of ATM living. And count on all medical records being (already) copied.[2] Oh, yeah: email, phone calls, text messages including faxes, and TV programming watched (by any home with one of the new 'digital TV' boxes that decode and store signals), too. All information, essentially, going in and coming out and the composition of a life.

Of course, medical (transaction) records number-crunched in a robust diagnosis-and-treatment health-modeling program can fairly well forecast sickness, distress, susceptibility to infection or disease, and in a word: longevity -- 'diagnosis-' and prognosis, (your situation and its future). Which is very conveeenient, and valuable, for life insurance accounting ... and to spot anyone late for their Fate date, who might be screwing up the Actuarial Dept data. But then, that's where the '-and-treatment' medicine comes in. Or not.

The Request for Proposal which went out for bids on the TIA, was spec'd for 10 billion records each accumulating 1 megabyte of data per day from vital signs, GPS (or equiv.) locations, audio and video samples on site (at a real-time sample rate proportional to the movement and activity frequency of the subject 'record'), along with all information-transaction data the 'user' interfaces with other 'users,' to be RF-relayed to regional nodes for real-time correlation, processing, and 'operator' (operational?) analysis. Unless it was 1 billion records accumulating 10 megabytes per day?; (the RFP for TIA is readily googled I imagine). Overall, the specs are on the order of magnitude of the data and response in a day's trading on Wall Street. And since the price/performance of digital memory and processors is peanuts/perfection, and seeing that TIA specs are scaleable, the next (circa 2003) order of magnitude is more than adequate for the approximate data collection and response coverage of every person's every waking minute on the planet.

Who is Where, When, doing What and How, would be the inputs, and the output would be Why. Computers today can do the math of everyone in the world all the time.

If it seems utterly incomprehensible, don't worry, be happy, faggedaboudit. If some of it seems comprehended, then perhaps consider this: The security of personal 'identity' might be in living NOT 'under the radar,' but rather 'over the top.' Experience teaches us 'there is safety in numbers,' which might mean The System isn't ended by starving it to nothing with a paucity of data hidden away in secretive private living, and instead The System is ended by drowning it under an inundating flood of TMI - Too Much Information. When there's a 'file' on you or 'a mark in your permanent record,' try to step it up 100 or 1000 times more. Information Age security might be everyone having total access knowing everything about everyone else every minute. When anything goes, anywhere, and we're informed to know anytime anyone asks any inquiry with us in the answer, any sane person recoils and minds their own business.

Abolish the FCBIIA, and Pentagon. Link all 'spy satellites' and video cams on the web. Know your mayor's public records before you vote. Know where all WMDs aren't. Probably buying a gun is no security at all.

Earth is a 'hard hat area' with operational video cell phones forward-and-aft on each helmut, government issued. Now is the time, as President Obama says, "to get to work" -- don't ask, be told.

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[1] Terrifying persons are known and tracked also by the Total Info Awareness database, including al'Qaeda. In fact, al Qaeda is the abbreviation of the Arabic word, Q eidat ilmu'ti'aat, which means 'data base' (in English). In the '80s (of Raygun, and King CIA), al Qaeda started as the computer database of names and addresses of Middle East bank account holders and the CIA hirelings (such as O. bin Ladin) in Afghanistan fighting the Soviet Union out.

[2] Madsen's long list of large identity thefts, includes once or more of the records of patients and providers in every health care (insurance) organization in the country; especially Blue Cross, Kaiser, HealthSouth, and large State plans as in California, New York, Florida, etc. All pharmacy data, and Medicare/Medicaid records, and date-of-birth vital statistics, were (before FCBIIA) already 'in-house' for feeding into The System.

Whistleblower: NSA even collected credit card records, David Edwards and Stephen C. Webster, Thursday January 22, 2009.

On Wednesday night, when former NSA analyst Russell Tice told MSNBC's Keith Olbermann that the Bush administration's National Security Agency spied on everyone in the United States, specifically targeting journalists, the Countdown host was so flabbergasted that Tice was invited back for a second interview.

On Thursday, he returned to the airwaves with expanded allegations against the NSA, claiming the agency collected Americans' credit card records, and adding that he believes the massive, warrantless data vacuum to be the remnants of the Total Information Awareness program, shut down by Congress in 2003.

"... data-mining that was involved," Tice told .... "At some point, information from credit card records and financial transactions was married in with that information."

"... American citizens, tens of thousands of whom are now on digital databases at NSA, who have no idea of this, also have that information included in those digital files that have been warehoused," said Tice.

"But, once again, we're talking about tens of thousands of innocent US citizens that have been caught up into this trap. They have no clue.

"This thing could sit there for 10 years, then all the sudden it marries up with something else and 10 years from now and they get put on a no-fly list and they of course won't have a clue why."

"... this is probably the remnants of Total Information Awareness .... That's my guess ....

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