New G20 Rules: Cyprus-style Bail-ins to Take Deposits AND Pensions

Source: blacklistednews.com



>>“Bail in” has been sold as avoiding future government bailouts and eliminating too big to fail (TBTF). But it actually institutionalizes TBTF, since the big banks are kept in business by expropriating the funds of their creditors.<< That's you and me baby!

On the weekend of November 16th, the G20 leaders whisked into Brisbane, posed for their photo ops, approved some proposals, made a show of roundly disapproving of Russian President Vladimir Putin, and whisked out again. It was all so fast, they may not have known what they were endorsing when they rubber-stamped the Financial Stability Board’s “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” which completely changes the rules of banking.

Russell Napier, writing in ZeroHedge, called it “the day money died.” In any case, it may have been the day deposits died as money. Unlike coins and paper bills, which cannot be written down or given a “haircut,” says Napier, deposits are now “just part of commercial banks’ capital structure.” That means they can be “bailed in” or confiscated to save the megabanks from derivative bets gone wrong.

Rather than reining in the massive and risky derivatives casino, the new rules prioritize the payment of banks’ derivatives obligations to each other, ahead of everyone else. That includes not only depositors, public and private, but the pension funds that are the target market for the latest bail-in play, called “bail-inable” bonds.

“Bail in” has been sold as avoiding future government bailouts and eliminating too big to fail (TBTF). But it actually institutionalizes TBTF, since the big banks are kept in business by expropriating the funds of their creditors.

It is a neat solution for bankers and politicians, who don’t want to have to deal with another messy banking crisis and are happy to see it disposed of by statute. But a bail-in could have worse consequences than a bailout for the public. If your taxes go up, you will probably still be able to pay the bills. If your bank account or pension gets wiped out, you could wind up in the street or sharing food with your pets.

In theory, US deposits under $250,000 are protected by federal deposit insurance; but deposit insurance funds in both the US and Europe are woefully underfunded, particularly when derivative claims are factored in. The problem is graphically illustrated in this chart from a March 2013 ZeroHedge post:

More on that after a look at the new bail-in provisions and the powershift they represent.

Bail-in in Plain English

The Financial Stability Board (FSB) that now regulates banking globally began as a group of G7 finance ministers and central bank governors organized in a merely advisory capacity after the Asian crisis of the late 1990s. Although not official, its mandates effectively acquired the force of law after the 2008 crisis, when the G20 leaders were brought together to endorse its rules. This ritual now happens annually, with the G20 leaders rubberstamping rules aimed at maintaining the stability of the private banking system, usually at public expense.

According to an International Monetary Fund paper titled “From Bail-out to Bail-in: Mandatory Debt Restructuring of Systemic Financial Institutions”:

[B]ail-in . . . is a statutory power of a resolution authority (as opposed to contractual arrangements, such as contingent capital requirements) to restructure the liabilities of a distressed financial institution by writing down its unsecured debt and/or converting it to equity. The statutory bail-in power is intended to achieve a prompt recapitalization and restructuring of the distressed institution.

The language is a bit obscure, but here are some points to note:

• What was formerly called a “bankruptcy” is now a “resolution proceeding.” The bank’s insolvency is “resolved” by the neat trick of turning its liabilities into capital. Insolvent TBTF banks are to be “promptly recapitalized” with their “unsecured debt” so that they can go on with business as usual.
• “Unsecured debt” includes deposits, the largest class of unsecured debt of any bank. The insolvent bank is to be made solvent by turning our money into their equity – bank stock that could become worthless on the market or be tied up for years in resolution proceedings.
• The power is statutory. Cyprus-style confiscations are to become the law.
• Rather than having their assets sold off and closing their doors, as happens to lesser bankrupt businesses in a capitalist economy, “zombie” banks are to be kept alive and open for business at all costs – and the costs are again to be to borne by us.

The Latest Twist: Putting Pensions at Risk with “Bail-Inable” Bonds

First they came for our tax dollars. When governments declared “no more bailouts,” they came for our deposits. When there was a public outcry against that, the FSB came up with a “buffer” of securities to be sacrificed before deposits in a bankruptcy. In the latest rendition of its bail-in scheme, TBTF banks are required to keep a buffer equal to 16-20% of their risk-weighted assets in the form of equity or bonds convertible to equity in the event of insolvency.

Called “contingent capital bonds”, “bail-inable bonds” or “bail-in bonds,” these securities say in the fine print that the bondholders agree contractually (rather than being forced statutorily) that if certain conditions occur (notably the bank’s insolvency), the lender’s money will be turned into bank capital.

However, even 20% of risk-weighted assets may not be enough to prop up a megabank in a major derivatives collapse. And we the people are still the target market for these bonds, this time through our pension funds.

In a policy brief from the Peterson Institute for International Economics titled “Why Bail-In Securities Are Fool’s Gold”, Avinash Persaud warns, “A key danger is that taxpayers would be saved by pushing pensioners under the bus.”

It wouldn’t be the first time. As Matt Taibbi noted in a September 2013  article titled “Looting the Pension Funds,” “public pension funds were some of the most frequently targeted suckers upon whom Wall Street dumped its fraud-riddled mortgage-backed securities in the pre-crash years.”

Wall Street-based pension fund managers, although losing enormous sums in the last crisis, will not necessarily act more prudently going into the next one. All the pension funds are struggling with commitments made when returns were good, and getting those high returns now generally means taking on risk.

Other than the pension funds and insurance companies that are long-term bondholders, it is not clear what market there will be for bail-in bonds. Currently, most holders of contingent capital bonds are investors focused on short-term gains, who are liable to bolt at the first sign of a crisis. Investors who held similar bonds in 2008 took heavy losses. In a Reuters sampling of potential investors, many said they would not take that risk again. And banks and “shadow” banks are specifically excluded as buyers of bail-in bonds, due to the “fear of contagion”: if they hold each other’s bonds, they could all go down together.

Whether the pension funds go down is apparently not of concern.

Propping Up the Derivatives Casino: Don’t Count on the FDIC

Kept inviolate and untouched in all this are the banks’ liabilities on their derivative bets, which represent by far the largest exposure of TBTF banks. According to the New York Times:

American banks have nearly $280 trillion of derivatives on their books, and they earn some of their biggest profits from trading in them.

These biggest of profits could turn into their biggest losses when the derivatives bubble collapses.

Both the Bankruptcy Reform Act of 2005 and the Dodd Frank Act provide special protections for derivative counterparties, giving them the legal right to demand collateral to cover losses in the event of insolvency. They get first dibs, even before the secured deposits of state and local governments; and that first bite could consume the whole apple, as illustrated in the above chart.

The chart also illustrates the inadequacy of the FDIC insurance fund to protect depositors. In a May 2013 article in USA Today titled “Can FDIC Handle the Failure of a Megabank?”, Darrell Delamaide wrote:

[T]he biggest failure the FDIC has handled was Washington Mutual in 2008. And while that was plenty big with $307 billion in assets, it was a small fry compared with the $2.5 trillion in assets today at JPMorgan Chase, the $2.2 trillion at Bank of America or the $1.9 trillion at Citigroup.

. . . There was no possibility that the FDIC could take on the rescue of a Citigroup or Bank of America when the full-fledged financial crisis broke in the fall of that year and threatened the solvency of even the biggest banks.

That was, in fact, the reason the US Treasury and the Federal Reserve had to step in to bail out the banks: the FDIC wasn’t up to the task. The 2010 Dodd-Frank Act was supposed to ensure that this never happened again. But as Delamaide writes, there are “numerous skeptics that the FDIC or any regulator can actually manage this, especially in the heat of a crisis when many banks are threatened at once.”

All this fancy footwork is to prevent a run on the TBTF banks, in order to keep their derivatives casino going with our money. Warren Buffett called derivatives “weapons of financial mass destruction,” and many commentators warn that they are a time bomb waiting to explode. When that happens, our deposits, our pensions, and our public investment funds will all be subject to confiscation in a “bail in.” Perhaps it is time to pull our money out of Wall Street and set up our own banks – banks that will serve the people because they are owned by the people.

Debunking the "The Saudis did 9-11" nonsense!

Source: whatreallyhappened.com

The official story of 9-11 is collapsing almost as fast as the Obamacare website. Most Americans are now well aware of the strange collapse of WTC Building 7, the video that captures the sound of the actual explosion that initiates the collapse of WTC7, the very strange behavior of the Secret Service as President Bush read about goats at Booker Elementary School. We have all seen the photographs that confirm the remains of demolition "cutter charges" in the remains of the towers. And we all know how the BBC reported that Building 7 collapsed 26 minutes before it actually happened.indicating a script was being followed (but alas, not carefully enough).

With the official story in free fall, Americans are wondering just who did this heinous deed. With the US Government itself the prime suspect, many are asking if the US Government had help from an outside nation, one with a long track record of world-changing dirty tricks.

There is a great deal of evidence that implicates the nation of Israel as a co-conspirator with the Bush administration. First, there was the massive Israeli spy ring uncovered in the United States just before 9-11, and how some of the "Dancing Israelis" arrested after being seen cheering and dancing as the World Trade Towers collapsed turned out to be Mossad spies! Then there was the strange case of Odigo, an Israeli-owned company whose New York offices received a warning about the attacks before the planes used in the attacks had even left the ground! All four of the hijacked planes departed from airport gates whose security was provided by the same Israeli security company. Israel has a long track record of playing dirty tricks against the United States and other countries, including the Lavon affair (framed on Egypt), Israel's attack on the USS Liberty (initially framed on Egypt), and Israel's smuggling a radio transmitter into Libya that was used to send fake messages that tricked President Reagan into bombing Libya.

As people start to seriously examine the plethora of evidence regarding Israel's numerous perfidies it comes as no surprise that recently we have seen Israel's "useful idiots" launch a propaganda campaign to claim that Saudi Arabia was behind the 9-11 attacks, based on a lawsuit brought against Saudi Arabia by the families of the victims, and a secret report that Representatives Stephen F. Lynch and Walter B. Jones are demanding be made public; a report that purportedly claims Saudi Arabia was behind 9-11. But anyone can bring a lawsuit against anyone for anything. That does not mean the lawsuit allegations are true. Nonsense lawsuits are a reality of the modern US court system, as are lawsuits staged primarily as political and propaganda stunts, which is what this appears to be. Likewise, the report the Representatives wish to make public appears to be the US Government's attempt to "get ahead of the ball" and craft a new lie to replace the one that has failed. At the very least these two pieces of propaganda are intended to deflect interest away from Israel. At worst, it is the start of the campaign to justify military invasion of that country, just as Saddam's nuclear weapons were the excuse to invade Iraq, and the more recently (and thankfully failed) attempt to justify invasion of Syria by claiming Syria's government was gassing their own people.

As I have mentioned before, the best way to tell if you are being lied to is to look for what should be there but isn't. In the case of the claim that Saudi Arabia was behind 9-11, what should be there and isn't is a motive for Saudi Arabia to do something like that.

George Bush had a motive to do 9-11. He needed that "new Pearl Harbor" to enrage Americans into the century of war called for by the Project For The New American Century. Israel certainly had a motive to do 9-11 and frame Muslims for it, to trick Americans into siding with Israel's continued land grabs and wars against Israel's enemies, with Israel's agenda being (as it was with the Lavon affair, the USS Liberty, and the Libyan radio hoax) that Americans fight those wars for them!

Saudi Arabia does not have a history of dirty tricks, nor a demonstrated ability to carry out such deceptions. More to the point, Saudi Arabia has no motive to attack the United States. The Saudi princes have grown very rich indeed through the Petrodollar arrangement. Saudi Arabia buys many American products and weapons ($61 billion in 2011), and unlike Israel, the American taxpayer does not have to give them the money first with which to buy those weapons. Whereas Israel constantly takes money out of the US, the Saudis pour it in! Private Saudi investment in the US economy is over $400 billion. Saudi Arabia is a major creditor to the US Government. Exact figures are hard to find but Saudi Arabia has loaned the US Government hundreds of billions of dollars.

Saudi Arabia is not going to risk an attack on the US because all that wealth would vanish. The Saudi wealth inside the US would be frozen or seized, and the outstanding loans to the US would never be repaid. The "useful idiots" trying to save Israel by blaming 9-11 on Saudi Arabia have yet to come up with a motive for the Saudis to do something like 9-11 that risks losing all that cash.

Remember that Saudi Arabia was being framed for 9-11 right from the start. One of the accused hijackers, a Saudi Pilot named Saeed Al-Ghamdi, was still alive after 9-11 and sued the US Government for defaming him.

And finally, here is some common sense that totally undermines the attempt to frame Saudi Arabia for 9-11. If Saudi Arabia really wanted to hurt the United States, they don't need to fly airplanes into skyscrapers to do it. All they have to do is ask for their money back, all at once. The resulting damage to the US financial system would make 9-11 look like a minor inconvenience in comparison.

And it would be perfectly legal for Saudi Arabia to ask for their money back.

Which is why we know that the claim that Saudi Arabia was behind 9-11 has no more basis in fact than the claim that Saddam had nuclear weapons or that Assad gassed his own people right in front of the UN chemical weapons inspectors.

As the media tries to blame Saudi Arabia for 9-11, it is worth recalling that the Bush administration initially claimed that Iraq was behind 9-11 to sell the 2003 invasion, then later admitted Iraq had actually been innocent. So there is a pattern of the US simply using 9-11 as a "one size fits all" excuse to invade yet another oil rich nation.

At the very least, even if you accept the new claim that Saudi Arabia was behind 9-11, then it means the US Government was lying when they claimed Afghanistan and then Iraq were behind it! So why would you trust them now?

MH17 Witnesses Tell BBC They Saw Ukrainian Jet. BBC Deletes Video

Source: russia-insider.com

Shortly after the tragedy, a BBC Russian correspondent interviewed numerous eyewitnesses who described seeing a second aircraft in the sky moments before MH17's fatal crash. The BBC pulled the report. Why?

Eyewitnesses say they saw two planes and heard two loud explosions

On July 23, two days after the Russian Ministry of Defense presented a radar track of a Ukrainian SU-25 fighter climbing to within three kilometers of MH17, the BBC’s Russian serviceaired a report by correspondent Olga Ivshina. 

The report originated when Ivshina and her cameraman went in search of the field outside the town of Torez, where the US government claims an SA-11 BUK surface to air missile was launched at the Boeing 777 on July 17.

Instead of finding witnesses who saw or filmed with camera phones a SAM launch plume that would look like this test firing of an SA-11 in Russia, what Ivshina found instead were people who heard two loud explosions in the sky and described Ukrainian fighter jets near the MH17 crash scene. As Ivshina described in the opening of her report, these Donbas locals were certain the Boeing airliner was shot down by the Ukrainian Air Force.

As RT reported in late July, the same night the video was posted on the BBC’s Russian service website the British-taxpayer funded network immediately took the video down. The ‘404 not found’ ghost URL of the video can still be found here, but the content is gone. Russia Today reported on the removal here, including the Russian blogosphere’s suspicions that this was a blatant act of censorship by the British government in order to protect Kiev.

Jan Leder, Managing Editor of the BBC Russian Service, denied that the BBC had engaged in politically motivated censorship of eyewitness testimony on July 24. Mr. Leder wrote in Russian that Ivshina’s report failed to meet BBC editorial standards because it lacked context, specifically the opinions of experts. While Mr. Leder’s statement doesn’t specify what sort of ‘experts’ Ivshina should have consulted for her report to meet BBC standards, we note that nearly all experts cited by Western mainstream media determined to prop up Washington and Kiev’s Narrative of a SAM shoot down have insisted that Ukraine’s Su-25 ground attack jets are incapable of shooting down a Boeing 777.

Journalists and self-described experts such as Aviation Week’s Bill Sweetman, RFE/RL’s Glenn Kates, and New York University Prof. Mark Galeotti all insist Russian and Donbas eyewitness claims about a Su-25 shooting down MH17 are just Kremlin propaganda. Both Sweetman and Kates ignored pushback in comments left below their articles at Aviation Week and RFE/RL that Ukraine possesses a modernized M1 variant of the Su-25 capable of reaching the altitude the Russian Ministry of Defense described in its July 21 press conference. 

Sweetman’s article of July 24 is a particularly egregious example of obfuscation, as he bizarrely insists no Ukrainian SU-25 pilot would be capable of putting on an oxygen mask above 23,000 feet. Sweetman also sarcastically refers to Wikipedia edits of the Su-25's service ceiling after MH17 was shot down, ignoring abundant evidence that Su-25M1s were operational and capable of flying at altitudes up to 10,000 meters months before the Ukrainian Civil War.

This columnist also notes that the pro-Kiev government Twitter feed Ukraine Reporter (@StateofUkraine) reported several hours before the MH17 shoot down on July 17 that the Ukrainian Air Force lost a Su-25M1 to Novorossiya rebel MANPADs. As Russia Insider contributor the Saker noted in early August, Ukraine’s Su-25s are more than capable of firing R-60 and possibly other air to air missiles at an easy target like an airliner. Contrary to the misleading narratives of Sweetman, Kates and Galeotti, a Ukrainian pilot would not have needed to maintain the same altitude or air speed as the Boeing 777 in order to shoot the plane down.

To date, neither Sweetman, Kates, nor Galeotti, or any other Western mainstream media journalist that we’re aware of have bothered to address the BBC Russian report. Like inconvenient facts in George Orwell’s Ministry of Truth modeled after the BBC where the novelist worked during World War II, the eyewitness accounts pointing to a Ukrainian shoot down of MH17 have been flushed down the memory hole. Fortunately, we have the Internet to keep examples of inconvenient reports alive online and highlight when Western media organizations try to bury stories on behalf of their governments.

The US/UK Campaign to Demonize Social Media Companies as Terrorist Allies

Source: informationclearinghouse

By Glenn Greenwald

November 30, 2014 "ICH" - "The Intercept" - In May, 2013, a British Army soldier, Lee Rigby, killed was on a suburban London street by two Muslim British citizens, who said they were acting to avenge years of killings of innocent Muslims by the British military in, among other places, Afghanistan and Iraq. One of the attackers, Michael Adebolajo, had also been detained and tortured in 2010 in Kenya with the likely complicity of Her Majesty’s Government. The brutal attack on Rigby was instantly branded“terrorism” (despite its targeting of a soldier of a nation at war) and caused intense and virtually universal indignation in the UK.

In response, the British Parliament’s Intelligence and Security Committee resolved to investigate why the attack happened and whether it could have been prevented. Ensuring that nothing undesirable would occur, the investigation was led by the Committee’s chair, the long-time conservative government functionary Sir Malcolm Rifkind. Yesterday, Sir Malcolm’s Committee issued its findings in a 191-page report. It contains some highly predictable conclusions, but also some quite remarkable ones.

Predictably, the report, while offering some criticisms, completely cleared the British intelligence agencies of any responsibility for the attack. It concluded: “we do not consider that any of the Agencies’ errors, when taken individually, were significant enough to have affected the outcome,” and “we do not consider that, given what the Agencies knew at the time, they were in the position to prevent the murder.”

But while British intelligence agencies bear no blame, the Committee identified the real culprit, which it claimed could have – but culpably failed – to stop the attack: an unnamed U.S. social media company (now reported to be Facebook). The Committee noted that one of Rigby’s killers, Michael Adebowale, had an online conversation (presumably on Facebook) with an “individual overseas” in December, 2012, in which Adebowale said “that he intended to murder a soldier.”

Sir Malcolm’s Committee claimed that the British intelligence agencies such as GCHQ and MI5 – despite being among the most aggressive and unrestrained electronic surveillance forces on the planet – had no possible way to have accessed that exchange. But, the Committee said, the social media company not only had the ability – but also the duty – to monitor the communications of all its users and report anything suspicious to the UK Government. Its failure to do so in this case, claimed the report, was the proximate cause of why the attack was not stopped (had the British agencies had access to this exchange, “there is a significant possibility that MI5 would then have been able to prevent the attack”).

All of this, argued the report, underscores how social media companies have become terrorist-helpers due to their refusal to monitor and report their users’ communications to the British Government. Here is this warped blame-shifting in the Committee’s own words:

The report then goes on to lecture social media companies that they must conduct themselves differently in the future:

The companies should accept that they have a responsibility to notify the relevant authorities when an automatic trigger indicating terrorism is activated and allow the authorities, whether the US or UK, to take the next step.

And Sir Macolm’s Committee all but scoffs at the notion that having these companies monitor and report their users’ conversations might actually violate privacy and turn these companies into skulking spy agencies for the state. Sir Macolm’s Committee notes that “several of the companies attributed the lack of monitoring to the need to protect their users’ privacy,” but, it proclaimed, “that argument should not be allowed to prevail” when it comes to “terrorist atrocities.”

Also predictably, the report does far more than merely complain about this. Instead, it does what the U.S. and UK Governments have been doing for almost 15 years now: brazenly exploits the fears and emotions surrounding this attack to demand still more spying powers for itself. In particular, it demands changes to the legal obligations of U.S. social media companies “either through legislation” in the U.S. or “by a treaty with the UK which places an obligation on US companies to provide this information” – i.e., whatever is requested by the UK Government.

The irony of Her Majesty’s Government blaming others for its own intelligence failures is stark indeed. This is a government that indiscriminately collects so much of the world’s private communications that they literally don’t know what to do with it. Among the documents published in my book was a GCHQ slide boasting that it “has massive access to international internet communications” and “we receive upwards of 50 billion events per day (and growing)”.

In fact, Sir Macolm’s report itself makes clear that the intelligence agencies of Her Majesty’s Government already collect such massive quantities of private communications that they have no ability even to understand what they’ve collected: in other words, they can’t detect terror plotting because they’re overloaded with the communications of millions of innocent people around the world, or are too busy trying to figure out the identities of visitors to the WikiLeaks website or ensnare hactivists in “honey traps” and thus unable to monitor actual terrorists. From the report (redactions in original):

In fact, the UK Government had in its possession information that would have triggered suspicions about one of the attackers, but the report itself notes that “GCHQ’s failure to report an item of intelligence which revealed contact between an unknown individual (later identified as Adebowale) and the AQAP extremist CHARLIE was significant.” This is a government that collects so much of people’s private communications that they have no idea what they are collecting.

But it’s never enough. A single attack on a single soldier is instantly and brazenly exploited to demand even more spying powers, to insist on new laws and treaties giving them even more access to more private communications. Nobody – including al Qaeda or ISIS – so effectively terrorizes U.S. and British citizens as much as their own governments do.

The Guardian‘s coverage of Sir Malcolm’s report is superb. Beyond the comprehensive reporting, they have an article detailing the (justifiable) indignation of tech companies over the blame-shifting report, thecomments of a former British terrorism official on the stupidity of imposing such obligations on social media companies, an editorial and an op-ed arguing that British intelligence agencies have primary responsibility to stop such attacks yet failed to connect the ample “dots” they had, and, best of all, a piecefrom the paper’s home affairs editor Alan Travis denouncing the report’s conclusions “as outrageous as it is wrong-headed” as “a case of shooting the messenger.”

But there’s something else significant going on here that I want to highlight. All of this is part of a clear anddefinitely coordinated campaign by the U.S. and UK Governments to demonize social media companies as terrorist-helpers in order to force them to act as (even more) obedient snooping agents for the National Security State.

It is well-established that, prior to the Snowden reporting, Silicon Valley companies were secret, eager and vital participants in the growing Surveillance State. Once their role was revealed, and they perceived those disclosures threatening to their future profit-making, they instantly adopted a PR tactic of presenting themselves as Guardians of Privacy. Much of that is simply self-serving re-branding, but some of it, as Idescribed last week, are genuine improvements in the technological means of protecting user privacy, such as the encryption products now being offered by Apple and Google, motivated by the belief that, post-Snowden, parading around as privacy protectors is necessary to stay competitive.

The U.S. and UK surveillance agencies are genuinely petrified of encryption, because, although not perfect, it presents a serious impediment to their ability to spy on the internet. But these governments have a problem: they function in what is effectively an oligarchy, which means that tech giants like Google – which fund and thus control political officials - are far too rich and powerful to be meaningfully controlled. Even in the 1990s, the tech sector was able to prevent the Clinton administration – exploiting the Oklahoma City bombing – from enacting legislation to require backdoors into all encryption. These companies are vastly more powerful now, and there is almost no prospect that meaningful legislation could be enacted to limit their product choices.

Instead, the U.S. and UK Governments are trying to pressure these companies to do what they had been doing – limitlessly cooperating with the Surveillance State – through a PR pressure campaign. Right now, in a post-Snowden world, the PR incentive framework for these companies pushes them to demonstrate a commitment to privacy. As Sir Malcom’s report noted:

Encryption is also becoming a market differentiator, particularly after the NSA leaks, as individuals have become more concerned about the privacy of their communications. MI5: “one of the effects of the Snowden disclosures has been to accelerate the use of default encryption by the internet companies.”

That is the incentive formula the National Security State is desperate to change. And the strategy for doing so is to depict these companies as Friends of the Terrorists, endangering public safety, every time they refuse dictates to help spy.

FBI Director James Comey in September said at a Press Conference about ISIS: “What concerns me about this is companies marketing something expressly to allow people to hold themselves beyond the law,” while the New York Times printed this: “‘Terrorists will figure this out,’ along with savvy criminals and paranoid dictators, one senior official predicted.” True to form, British security officials were even more unhinged, as the newly appointed GCHQ chief accused social media companies of becoming the “command-and-control networks of choice for terrorists and criminals.”

Just yesterday, Lord West, “a former admiral who served as UK security minister until 2010″ said that Snowden revelations have killed people due to increased encryption use: “Since the revelations of the traitor Snowden, terrorist groups, in particular Isil (Islamic State), have changed their methods of communications and shifted to other ways of talking to each other. Consequently there are people dying who actually would now be alive.” Meanwhile, former NYPD Commissioner Raymond Kelly called the Snowden disclosures “the worst leak” because “we see major corporations having difficulty doing business outside the US and, as a result, putting impenetrable encryption in their products which ultimately hurts the whole law enforcement effort.”

The plan, quite obviously, is to make it untenable for these companies ever to offer privacy protections or market encryption products by demonizing them as Allies of the Terrorists when they do. Just behold the blatant fear-mongering near the end of Sir Malcolm’s report:

The irony here is obvious, as even post-Snowden, these tech companies – despite their newly minted PR campaign – continue to play a vital, cooperative role in the Surveillance State. Sir Malcolm’s report itself recognizes that “the companies we contacted all confirmed that, if UK authorities requested information in an emergency situation, they would provide that information.” And Google, Facebook, Yahoo, Microsoft and the like continue to be in bed with the U.S. and UK National Security State in all sorts of untoward ways. It’s stunning that anyone could maintain a straight face while depicting Facebook, of all companies, as some sort of excessive privacy guardian. As the Guardian‘s Travis noted, “Facebook even has a team in Dublin handling standard British requests and another dedicated team in California dealing with emergencies.”

Still, even the smallest gestures of defiance, symbolic protection of user privacy, and minimal responsiveness to user demand, cannot be tolerated by “Collect it All” snooping agencies. And thus every “terror” attack, no matter how limited in scope, is instantly seized upon to manipulate public emotions into acquiescing to more surveillance powers, while the message is simultaneously sent that anyone who resists the Surveillance State is a friend and ally of terrorists, pedophiles, and all other sorts of menacing criminals. That is the campaign which Sir Malcolm’s odious little report was clearly designed to advance.

Photo by Peter Macdiarmid/Getty Images

If Drone Strikes Are Acceptable, So Are Suicide Bombings

Source: informationclearinghouse

By Tim Holmes
November 30, 2014 "ICH" - "Medium" -  “Clinical”, “surgical”, “targeted”, “precision”. As US massacres-by-drone continue across the Middle East, Africa and Central Asia, their ugly accomplice is the bastardisation of language. Human rights group Reprieve have just calculated the number of innocent victims each drone strike claims, posing the question: by what standards are 1,150 civilians — almost half a World Trade Centre — an acceptable price for 41 “terrorist suspects”? How is this “surgical precision”?

That’s assuming the targets are who we are told. In almost every case, we are forced to take the US government at its word.

The media play along. Yet if Russia or Iran bombed Western “terrorists” day in, day out, would journalists take their word for it? Would we allow such attacks to continue all but unnoticed?

Instead, the US presents itself as a surgeon at the operating table — as do the press. A choice metaphor transforms brutal violence into humanitarian aid: if cutting someone open is gruesome, “surgery” sounds friendly — a temporary, restorative, proportionate act for the patient’s good.

The contrast with Western discourse on “terrorism” — that is, Muslim retaliation against the West — could hardly be more blatant. “They” are barbarians; their killings wilful, bloodthirsty, indiscriminate.

In 2001, the Guardian contrasted

“the west’s commitment to do everything possible to avoid civilian casualties and the terrorists’ proven wish to cause as many civilian casualties as possible … Let them do their worst, we shall do our best, as Churchill put it. That is still a key difference.”

In fact, US policy resembles Israel’s war crimes under brutal megalomaniac Ariel Sharon — who, in one infamous incident, dropped a one-tonne bomb on a densely-populated civilian area in Gaza, claiming to target one man.

As Israel-Palestine scholar Norman Finkelstein points out, if Hamas bombed a bus, claiming “we meant only to target the bus, not the passengers”, people would laugh. Yet from Israel and Western governments, we take the same absurdities deadly seriously.

In 2001, Bush’s lawless kidnapping and torture at Guantanamo Bay horrified and disturbed the world.

Now, imprisonment without trial continues — and alongside it, execution without trial. Where Bush began by kidnapping, Obama assassinates.

Drone strikes have butchered 28 innocent people for every “suspect” targeted. Is that morally acceptable?

If so, why not an attack that kills 4 jihadists and 52 civilians? Applying the moral logic of drone strikes, we would have to declare it a great success.

Yet this is a description of the 7 July 2005 bombings in London.

We commit grave acts of terror on a single pretext: that our targets might commit grave acts of terror.

How do our governments get away with it? Why do drone strikes prompt so little response?

The first answer is that they are invisible. They take place in distant, unfamiliar countries, and we see almost no footage.

The second is propaganda. The Pentagon labels victims “enemy combatants” — when mentioning them at all. Rather than challenge the label, the media echoes it.

The third is racism. To imagine that our governments would use drone strikes in America or Britain is laughable. We would have no difficulty recognising them as acts of terror; their perpetrators would be tried and punished.

Yet so little value do we assign lives in Yemen, Somalia and Pakistan that deliberate mass executions barely raise an eyebrow.

Even this, though, casts Obama’s policy in too kind a light.

In some cases there is no evidence that our targets are “terrorist suspects” at all.

Second, the US undertakes “signature strikes”: NSA spies tease out “suspicious patterns of behaviour” in their data; anyone flagged up is executed. (Reprieve’s latest figures omit these cases.)

Third, the Pentagon conducts “double-tap” strikes, hitting the same area twice in quick succession, bombing anyone trying to help the victims of the first attack.

Fourth, as the New York Times discovered, the White House “counts all military-age males in a strike zone as combatants … unless there is explicit intelligence posthumously proving them innocent”. “Shoot first, ask questions later”; “guilty until proven innocent”: these used to be scathing, satirical phrases. Under Obama, they are policy.

Just as they would here, drone strikes in Africa, the Middle East and Central Asia make people angry and want to hit back. So to commit mass murder, the Western public pays twice — both today, in public funds, and tomorrow, in the inevitable violent backlash against us.