Links: 2013-09-06
How Hackers Beat The NSA In The ’90s And How They Can Do It Again | TechCrunch
“In the early 1990s, the military was petrified that encryption technologies would leave them blind to the growing use of mobile and digital communications, so they hatched a plan to ban to place a hardware patch that gave the NSA backdoor wiretap access, the so-called “Clipper Chip“.
After hearing about the plan, a grassroots cabal of hackers, engineers, and academics erupted in protest, sparking a nationwide campaign to discredit the security and business implications of the Clipper chip, ultimately bringing the NSA’s plans to a screeching halt.”
Apple Tests iPhone Screens as Large as Six Inches – WSJ.com
Good for Apple but it does tell you they have probably missed the boat on this market.
“The electronics giant has begun evaluating a plan to offer iPhones with screens ranging from 4.8 inches to as high as 6 inches, people familiar with the matter say. That would be a sizable leap from the 4-inch screen of the iPhone 5 released last year, and, at the upper end, would be one of the largest on the market.”
Continuations : Disagreeing with Bruce Schneier: More Crypto is Not the Answer
“We cannot and should not be living in digital fortresses any more than we are living in physical fortresses at home. Our homes are safe from thieves and from government not because they couldn’t get in if they wanted to but because the law and its enforcement prevents them from doing so. All we have to do is minimal physical security (lock the doors when you are out).
Please repeat after me: Surveillance is a political and legal problem, not a technical problem.”
“The number of first-time buyers rose dramatically in July, with 26,100 first-time buyer sales – 8,100 more than twelve months ago.
This puts the number of first-time buyers at its highest in six years, according to LSL Property Services’ First Time Buyer Monitor. “
Treasury Yields Pierce 3% With Employment Data Ahead – WSJ.com
By the time you read this the NFP number will be out.
“Ten-year bond yields traded above 3% for the first time in over two years, reaching a peak of 3.007% in Asian trading hours Friday—a clear signal that traders and investors believe the so-called tapering by the Fed is just around the corner amid broadly upbeat global economic data. U.S. nonfarm payrolls statistics are due at 1230 GMT.”
“Levison said he has always known Lavabit safeguards could be bypassed if government agents took drastic measures, or as he put it, “if the government was willing to sacrifice the privacy of many to conduct surveillance on the few.” For instance, if he was forced to change the code used when a user logs in, his system could capture the plain-text password needed to decrypt stored e-mails. Similarly, if he was ever forced to turn over the private encryption key securing his site’s HTTPS certificate, government agents tapping a connection could observe the password as a user was entering it. But it was only in the past few weeks that he became convinced those risks were realistic.
“I don’t know if I’m off my rocker, but 10 years ago, I think it would have been unheard of for the government to demand source code or to make a change to your source code or to demand your SSL key,” Levison told Ars. “What I’ve learned recently makes me think that’s not as crazy an assumption as I thought.””
” Mr. Summers’s reputation is replete with evidence of a temperament unsuited to lead the Fed. He is known for cooperation when he works with those he perceives as having more power than he does, and for dismissiveness toward those he perceives as less powerful. Those traits would be especially destructive at the Fed, where board members and regional bank presidents all bring their own considerable political power and intellectual heft to the Fed’s decision-making on monetary policy and financial regulation. Putting Mr. Summers in charge would risk institutional discord or worse, dysfunction.
His record on financial regulation is abysmal, and he has not acknowledged the errors.”
“Echoing comments he made to Finnish press, Vanjoki tells The Verge in an emailed statement that the situation is “shameful, but unavoidable.” He believes that the sale represents a “complete failure” of Nokia’s regeneration strategy and it’s implementation. “Nokia was not able to make it work. For Finland’s sake, I hope Microsoft will.””
I agree with this outlook and it is especially important for Microsoft because they need to get the Windows onto hybrid models as a way of amping their penetration of the mobile space.
This means that a rise in consumption taxes is more likely. See my thoughts here Abenomics and Japan’s disastrous macro plans:
“Japan’s Cabinet Office deemed July’s coincident composite index—consisting of 11 key economic indicators including industrial output and retail sales—to be “showing improvement” after it rose 0.9 points on month to 106.4, the highest since April 2012. The government defines improvement as being when the index shows “a high likelihood of an economic expansion.”
The last time the government saw an improvement in the assessment was in May 2012.”
“The number of births in 2012 leveled off after years of big drops. There were 3.5 million babies born last year, less than 1,000 fewer than 2011. That compares to a declines of about 50,000 in 2011 and more than 100,000 in both 2009 and 2010.
Meanwhile, the fertility rate — number of births per 1,000 women of childbearing age — fell to 63 from 63.2, a new record low. But this is a very small drop compared to previous years. The rate stood at 69.3 in 2007, and dropped steeply and consistently throughout the recession and early years of the recovery.”
“JPMorgan Chase & Co (JPM.N) has decided to get out of the student loan business, after the biggest U.S. bank concluded that competition from federal government programs and increased scrutiny from regulators had limited its ability to expand the business.”
The student loan bubble is starting to burst
” JPMorgan Chase has sent a memorandum to colleges notifying them that the bank will stop making new student loans in October, according to Reuters.
The move is eerily reminiscent of the subprime shutdown that happened in 2007. Each time a bank shuttered its subprime unit, the news was presented in much the same way that JPMorgan is spinning the end of its student lending.”
N.S.A. Foils Much Internet Encryption – NYTimes.com
“The agency has circumvented or cracked much of the encryption, or digital scrambling, that guards global commerce and banking systems, protects sensitive data like trade secrets and medical records, and automatically secures the e-mails, Web searches, Internet chats and phone calls of Americans and others around the world, the documents show.”
THE SILENT POWER OF THE N.S.A. – NYTimes.com
This is from 1983:
“A Federal Court of Appeals recently ruled that the largest and most secretive intelligence agency of the United States, the National Security Agency, may lawfully intercept the overseas communications of Americans even if it has no reason to believe they are engaged in illegal activities. The ruling, which also allows summaries of these conversations to be sent to the Federal Bureau of Investigation, significantly broadens the already generous authority of the N.S.A. to keep track of American citizens. “
Patriot Act Author Says NSA Is Abusing Spy Law | Threat Level | Wired.com
“Rep. Jim Sensenbrenner (R-Wisconsin) quickly ushered in the USA Patriot Act in the wake of the September 2001 terror attacks. But the author of the act, which greatly expanded the government’s spy powers, says the National Security Agency is abusing that law by collecting records of all telephone calls in the United States.”
“Should rates rise much further, and housing take a huge hit as a result, a genuine buying opportunity in long-term treasuries may present itself.”
“The balance that existed in 2011 is nearly nonexistent today. Third-party hardware vendors have a lot to worry about. BlackBerry (RIP RIM) is on its deathbed. Which leaves the three biggest companies in the smartphone industry, Apple, Google and Microsoft, with near complete control of the market. All three of those companies make their own hardware now, putting strictly hardware manufacturers in a tight spot.”
“If there’s any confirmation that the U.S. government has commandeered the Internet for worldwide surveillance, it is what happened with Lavabit earlier this month.”
Belgium has exited recession.
“Ars Technica gave three experts a 16,000-entry encrypted password file, and asked them to break them. The winner got 90% of them, the loser 62% — in a few hours.”
“The NSA has huge capabilities – and if it wants in to your computer, it’s in. With that in mind, here are five ways to stay safe”
In case you missed it, this is what is happening in China:
“The Purchasing Managers’ Index was at 51.0, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. A separate manufacturing PMI released today by HSBC Holdings Plc and Markit Economics rose to 50.1 last month from 47.7 in July, the biggest gain in three years and the first reading above 50 since April.”
This will end badly:
“Inflated house prices mean mortgages are less affordable than renting for many, even with a 20pc deposit.”
“the area has dramatically ramped up both beef and corn production since 1980—and the great bulk of that corn comes from irrigated land. And while beef production in the region has at least leveled off, the region’s farmers just keep churning out more corn—including irrigated corn.”
“For most Americans, life expectancy continues to rise—but not for uneducated white women. They have lost five years, and no one knows why. “
This is an Android-based company. They would have no chance of success in the iPhone ecosystem.
“”In the last 12 months, we’ve had five-times revenue growth. By the end of the year, we forecast our technology will be on 100m devices, up from 30m at the end of 2012,” Reynolds told The Guardian.
“We have revenue growth, so it wasn’t a case of needing capital to run the core business. It was a case of wanting to invest in the future and to do more faster.””
“Because strong encryption can be so effective, classified N.S.A. documents make clear, the agency’s success depends on working with Internet companies — by getting their voluntary collaboration, forcing their cooperation with court orders or surreptitiously stealing their encryption keys or altering their software or hardware.
According to an intelligence budget document leaked by Mr. Snowden, the N.S.A. spends more than $250 million a year on its Sigint Enabling Project, which “actively engages the U.S. and foreign IT industries to covertly influence and/or overtly leverage their commercial products’ designs” to make them “exploitable.” Sigint is the abbreviation for signals intelligence, the technical term for electronic eavesdropping. “
“Since 2003 a falling unemployment rate has been the consequence of the creation of a large number of low-wage and part-time or flexitime jobs, without the benefits and protections afforded earlier postwar generations. Germany now has the highest proportion of low-wage workers relative to the national median income in western Europe. Average wages increased by more than inflation and productivity growth in the past year for the first time after more than a decade of stagnation.”
“Low-income families with young children on tight food budgets were most likely to buy food on cheap “special offer” promotions, Kantar Worldpanel found. Yet roughly a third of all sugar and saturated fat purchased by UK consumers was sold through these offers.
Quick added: “Consumers appear unwilling, unmotivated and unable to alter their current eating habits.”
In case you missed it, Australia put up good numbers earlier in the week:
“Australia’s economy grew moderately last quarter as modest gains in consumer and government spending offset a flat performance elsewhere, though there was still scant sign of a much-needed recovery in business investment.
The Australian Bureau of Statistics reported gross domestic product rose 0.6 per cent in the second quarter, from the previous quarter when it rose 0.5 per cent. That was enough to send the local dollar higher as there had been fears the report would be much weaker.”
“n the 1990s, after a report from RSA Data Security, Inc., who were in a licensing dispute with regard to use of the RSA algorithm in PGP, the Customs Service started a criminal investigation of Phil Zimmermann, for allegedly violating the Arms Export Control Act.[3] The US Government had long regarded cryptographic software as a munition, and thus subject to arms trafficking export controls. At that time, the boundary between permitted (“low-strength”) cryptography and impermissible (“high-strength”) cryptography placed PGP well on the too-strong-to-export side (this boundary has since been relaxed). The investigation lasted three years, but was finally dropped without filing charges.”
From 1976: “Like people, computers talking to one another can be wiretapped. To protect themselves, more and more companies, such as the oil giants and banks, are putting their digital correspondence into secret form.
This has led to a demand for a common cipher — a system that would both permit intercommunication among computers and safeguard the privacy of data transmissions. The National Bureau of Standards, with the help of the National Security Agency, the Government code-making and code-breaking body, has proposed one.
The interesting thing is that while this cipher has been made just strong enough to withstand commercial attempts to break it, it has been left just weak enough to yield to Government cryptanalysis. “
“The story, we believe, is an important one. It shows that the expectations of millions of Internet users regarding the privacy of their electronic communications are mistaken. These expectations guide the practices of private individuals and businesses, most of them innocent of any wrongdoing. The potential for abuse of such extraordinary capabilities for surveillance, including for political purposes, is considerable. The government insists it has put in place checks and balances to limit misuses of this technology. But the question of whether they are effective is far from resolved and is an issue that can only be debated by the people and their elected representatives if the basic facts are revealed. “
“The agencies, the documents reveal, have adopted a battery of methods in their systematic and ongoing assault on what they see as one of the biggest threats to their ability to access huge swathes of internet traffic – “the use of ubiquitous encryption across the internet”.
Those methods include covert measures to ensure NSA control over setting of international encryption standards, the use of supercomputers to break encryption with “brute force”, and – the most closely guarded secret of all – collaboration with technology companies and internet service providers themselves.”
“if you read the correspondence of officials who were not absolutely in the heart of the storm at that exact moment, they sometimes just lumped Suez in with lots of other developments or felt it would be resolved in a more ordinary, expected way that was largely continuous with the prior history of empire. It was only five or ten years out that everyone could see clearly that Suez was the moment where the changed relation between Western Europe and the U.S. was finalized, where the terms of the Cold War in relation to the Non-Aligned Movement were really defined, where the end of empire became inevitable, where the blighted politics and military doctrines of Middle East rivalries congealed. It was quickly clear within the UK that Anthony Eden had been destroyed politically by the resolution of the crisis, but the intensity of the stench of failure and miscalculation around his decision-making has become far more pronounced in the decades since.
I’m raising this point because right now it is becoming clear that the post-imperial moment for the United States is not in some relatively imminent future but has already come and gone. It’s becoming clear that the Iraq War, contrary to the dearest wishes of its most lunatic devotees, was the Suez of the Pax Americana”
An interesting take on the US by a student new to the culture
“although many inside and outside Japan surely did not realize how bad the March 11, 2011 disaster was – and how bad it could get – it seems clear now that we have been misled about the scale of the problem confronting Japan. The country needs international help – and quickly.
While the amount of radioactivity released into the environment in March 2011 has been estimated as between 10 percent and 50 percent of the fallout from the Chernobyl accident, the 400,000 tons of contaminated water stored on the Fukushima site contain more than 2.5 times the amount of radioactive cesium dispersed during the 1986 catastrophe in Ukraine.”
“these two measures send remarkably similar signals, and could even be held to support each other. There is far more detail about these measures in other posts on this blog, and also in today’s Analysis piece on Jeremy Siegel’s criticisms of Cape.
For now, briefly, the argument of those who take these measures seriously is that one (q) is an economic concept to do with the replacement cost of a company’s assets, while the other (Cape) is a financial concept related to the flow of earnings that a company produces. They come from different directions and yet they give very similar results – and over history extreme measures for both have been great indicators that it might be time to enter or exit the market. That is why people think they work.”
“Robert Shiller’s warnings about the internet stock bubble of the late 1990s, followed after a few years by a controversial – and accurate – prediction on the US housing market, earned him the respect of Wall Street and a place on the bestseller list.
The Yale economist’s call on the internet boom, articulated in his book Irrational Exuberance, was based on the measure he developed called the Cape, for cyclically adjusted price/earnings multiple. The Cape, which uses earnings data going back to 1871, has gained wide acceptance as an accurate gauge of the market. Prof Shiller and the Cape are sounding the alarm once again, implying that the US market is 62 per cent overvalued and more expensive than any other big stock market.
But the Cape is under attack from another renowned economist, Jeremy Siegel, who contends that it is based on faulty data. Many on Wall Street and the City have doubts too.”
“When President Obama decided to ask Congress for authorization to strike Syria, he put the mission at the mercy of both public opinion and congressional Republicans. Neither bet is looking particularly good right now. Public opinion remains overwhelmingly opposed — and that’s even truer in the slice of public opinion that contacts members of Congress.
“The active public is against this,” Rep. Brad Sherman, who supports intervention, told me. “I don’t know a member of Congress whose e-mails and phone calls are in favor of this.””
“With Obama in St. Petersburg today for a summit of global leaders, Putin yesterday denounced a potential U.S. attack on Syria as a violation of international law, while Obama told reporters the two countries’ relations have “hit a wall.”
“This is basically as bad as it gets,” said James Goldgeier, dean of the School of International Service at American University and the Russia director for the National Security Council under former President Bill Clinton. “You typically don’t have leaders who so openly criticize each other, who openly disdain each other.” “
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