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Richard Fernandez

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The Subversive Ordinary

Yesterday I wrote that the “Guardians of the Peace”, that shadowy group responsible for stealing a major chunk of the intellectual property  of the Sony Corporation, might soon find themselves attacked similarly nameless programmers.

How about hiring the Justice League of America, who now have day jobs on Playstation Portable Systems, to take on the Guardians of the Peace? There may be many mild mannered programmers in the CIA, NSA, FBI and DOD, not to mention the PSP who are secretly Batman, Superman, Wonderwoman and the Flash by night. This may be happening even as we speak, except that nobody talks about it.

Maybe invisible supervillains can only be countered by invisible superheroes, if only to give them pause. You have got to make the Guardians of the Peace worry; to ponder each time they get into the elevator in the high rise building which serves as their secret hacker’s headquarters, whether the lift might not suddenly plunge straight into the parking basement.

The Justice League may already be striking back. Reuters reports that “North Korea experienced Internet outages on Monday, a U.S. company that monitors Internet infrastructure said, adding that the reason for the problems was not known.

“For the past 24 hours North Korea’s connectivity to the outside world has been progressively getting degraded to the point now that they are totally offline,” said Doug Madory, director of Internet analysis at New Hampshire-based Dyn Research.

“There’s either a benign explanation – their routers are perhaps having a software glitch; that’s possible. It also seems possible that somebody can be directing some sort of an attack against them and they’re having trouble staying online.”

The average North Korean may not notice that his Internet connection is down because the average North Korean doesn’t have a connection. Wikipedia notes: “Internet access is available in the Democratic People’s Republic of Korea (North Korea), but only permitted with special authorization … as of late 2014 there are 1,024 IP addresses in the country.”

But the outside world will conclude that president Obama has fulfilled his vow “in a place and time and manner that we choose” and consider chastisement delivered.


Posted at 3:22 pm on December 22nd, 2014 by Richard Fernandez

The Deniables

War is back, but it’s not called that any more. It now goes by a variety of names: workplace incident, act of insanity, cyber-vandalism, responsibility to protect. It comes in a range of intensities, from a machete attack on cops in a subway to the destruction of two skyscrapers containing thousands of people. But whatever name one prefers, it’s back.

The world in which “it” happens has strange geometries. There’s a shorter fence around the border but a taller fence around the White House. The door to Cuba may have been opened yet the Mall of America was shut due to protests over Ferguson, Missouri.   It’s a world where memes and information compete for dominance and survival; a strange world in which the administration is mooting punishing China to get back at North Korea for a computer attack on a private corporation. The Daily Beast says:

“Our best response,” a former senior intelligence official told The Daily Beast, “would be to turn the screws on [the North Koreans’] patrons.”

The most important of those patrons are in Beijing. China is the Hermit Kingdom’s most important trade partner, and it also supplies much of the manpower and technology North Korea uses to conduct cyberattacks.

President Obama plans to punish China by reaching out to it. The New York Times reports “The Obama administration has sought China’s help in recent days in blocking North Korea’s ability to launch cyberattacks, the first steps toward the ‘proportional response’ President Obama vowed to make the North pay for the assault on Sony Pictures — and as part of a campaign to issue a broader warning against future hacking, according to senior administration officials.” But even the NYT is doubtful China will help.

So far, the Chinese have not responded. Their cooperation would be critical, since virtually all of North Korea’s telecommunications run through Chinese-operated networks.

It is unclear that China would choose to help, given tensions over computer security between Washington and Beijing since the Justice Department in May indicted five hackers working for the Chinese military on charges of stealing sensitive information from American companies.

If the diplomatic request doesn’t work the lawyers may reach for something stronger. The administration said the Sony caper “could land Pyongyang back on the administration’s terror list, a designation lifted by the Bush administration in 2008 during nuclear talks”.  Take that Pyongyang,  even though you only committed “cybervandalism”.

The sole sovereign of the United States will give you what-for, even though he is having a hard time characterizing what he is wroth at; or who he should hold accountable and what to do about it in any event. It’s a problem in three variables and only one given equation.


Posted at 2:35 pm on December 21st, 2014 by Richard Fernandez

A Single Sovereign

The Sony corporation defended itself against accusations it caved to North Korean extortionists who hacked the company’s computer systems. NBC News reports:

The CEO of Sony Entertainment said Friday that he and the company did contact the White House in the days before it decided to cancel the release of “The Interview” amid threats of violence, after President Barack Obama earlier called that decision “a mistake” and said, “I wish they had spoken to me first.”

“A few days ago I personally did reach out and speak to senior folks at the White House and informed them that we needed help … I did reach out and explain the situation at that time,” Michael Lynton said in an interview on CNN. “Did we talk to the president himself and talk to him about what was transpiring, that theaters were starting to pull back and being unwilling to distribute the movie? No. But the White House was certainly aware of the situation.”

Earlier Friday, Obama said Sony “made a mistake” when it cancelled the Dec. 25 release of the comedy. “We cannot have a society in which some dictator someplace can start imposing censorship here in the United States. Because if somebody is able to intimidate folks out of releasing a satirical movie, imagine what they start doing when they see a documentary they don’t like, or news reports they don’t like,” Obama said.

But while every network must defend itself, it’s not Sony’s job to defend itself against attacks by sovereign nations. The hack is only part of Pyongyang’s offense.  They are also engaged in intimidation. In president Obama’s own words Pyongyang is imposing its censorship laws in California.  They are asserting the power to legislate in the US.  It would be nice if Sony would resist, but the job of protecting individuals or organizations domiciled in the US against attacks by other nations is Obama’s. It is nobody else’s.  He’s the Commander in Chief.

The president has for example asserted that the states have no business going after illegal immigrants because the defense of borders is a federal responsibility. He is jealous of that power and sued the state of Arizona for its attempts to curb illegal immigration into that state. The New York Times reported in 2012:

The Obama administration argued that federal immigration law trumped — or pre-empted, in legal jargon — the state’s efforts. Last year, the United States Court of Appeals for the Ninth Circuit, in San Francisco, blocked the four provisions on those grounds, including the one the Supreme Court upheld. …

Justice Scalia went on. “Perhaps it is, though Arizona may not think so. But to say, as the court does, that Arizona contradicts federal law by enforcing applications of the Immigration Act that the president declines to enforce boggles the mind.”

He added that Arizona and other states should not be left helpless before the “evil effects of illegal immigration.”

Justice Kennedy responded that “federal law makes a single sovereign responsible for maintaining a comprehensive and unified system to keep track of aliens within the nation’s borders.”

The defense of the borders is a federal responsibility. The idea that a “single sovereign” is responsible for defending US borders against foreign incursions is central to the legitimacy of Washington.  To be fair, the administration has promised to do something unspecified to North Korea at a time of its choosing. It will retaliate somehow, someday.

But if the administration’s admonitions to Sony were any indication, the “single sovereign” is less than intimidating to its potential foes.  North Korea’s attack on Sony is also an indication of just how much Kim Jong-un respects president Obama.


Posted at 11:15 pm on December 19th, 2014 by Richard Fernandez

Reading The Small Print

Mark Lander of the New York Times describes how president Obama has ‘mastered the art of secret negotiations’. “What the Cuba, Iran and China talks have in common — aside from their cloak-and-dagger allure — are a small team of negotiators, strict discipline and tight control by the White House.” A less charitable description might use the words “deceit”, “amateurism” and “bad faith” to characterize the White House’s efforts.

They also attest to Mr. Obama’s willingness to entrust historic projects to close aides, some of whom are young and have little experience in diplomacy.

In the case of Cuba, the entire American delegation consisted of two White House officials, one of whom, Benjamin J. Rhodes, is a 37-year-old speechwriter who has worked for Mr. Obama since his 2008 campaign and has become an influential voice in the administration. The Iran and China negotiations were also led by trusted Obama aides.

Using non-diplomats helps preserve the veil of secrecy, a senior official said, because such people are less likely to arouse suspicion among colleagues or the press. The three countries with which they were negotiating, the official said, were also able to keep a secret.

Castro seems to be the big winner.  The WSJ says that the White House may be intentionally giving away the store as part of a deep game. “By offering so much for relatively little, Mr. Obama may calculate that an American gesture now will lead to a larger opening once the aging Castro brothers finally go to their eternal punishment.”

He may also hope that by acting now he can prepare the way for a triumphant visit to Havana before the end of his Presidency. Mr. Obama came to office in 2009 promising a new era of engagement with U.S. adversaries, and engage he has. Perhaps his Cuban “reset” will turn out better than have his efforts with Russia, Syria, North Korea and Iran.

The administration has a talent for turning victory into defeat. It’s good news for Fidel Castro, just when his regime was teetering on the precipice occasioned by the bankruptcy of principal allies Venezuela and Russia. The president has argued that 50 years of isolation has not toppled Castro. Why topple him now that he’s on the verge of going over the cliff? Maybe because the administration wants a stable Communist dictatorship off Florida in preference to a nation ripped apart by civil war.  If starving Cubans actually stage a real revolution in Havana it might be inconvenient.

Mark Trumbull of the Christian Science Monitor asks “will closer financial ties between the United States and Cuba help to promote political reform on the communist island or simply prop up a morally bankrupt regime?”

“The United States has just thrown the Cuban regime an economic lifeline,” Sen. Robert Menendez (D) of New Jersey, outgoing chairman of the Senate Foreign Relations Committee, said in a statement released Wednesday. Another senator of Cuban-American heritage, Ted Cruz (R) of Texas, used the same “economic lifeline” phrase in issuing his own lament.

But one of the benefits to secret negotiations is that the administration can completely avoid answering such knotty questions. Julie Hirschfeld Davis and Michael Gordon of the New York Times report “Obama Intends to Lift Several Restrictions Against Cuba on His Own”.  He’ll do it all in his vest pocket, in the same secretive manner that he conducted the negotiations themselves.


Posted at 3:09 pm on December 19th, 2014 by Richard Fernandez

Let’s Get Ready to Rrrrubble!

Russian consumers flocked to stores to buy what they could before the value of their money dropped further. The ruble is crashing. The Associated Press says that “Russian authorities announced a series of measures to ease the pressure on the ruble, which slid 15 percent in the previous two days and raised fears of a bank run, many Russians were buying cars and home appliances — in some cases in record numbers — before prices for these imported goods shoot higher.”

Apple has stopped online sales. Ikea stores have been overrun with frenzied buyers. A run on banks could be just a few days away. The big time guys are panicked too. The Daily Mail says Russian oligarchs are converting away from the ruble like it was going out of style. “‘I’ve got £100m to spend, what can I get in Mayfair?’ … Russia’s oligarchs have started a new stampede for high-end London property to protect their wealth from country’s collapsing economy”

Walter Russell Mead, writing in the American Interest says that with Putin’s back  up against the wall he may be as dangerous as the proverbial wounded bear.

Will Putin surrender to the West or double down, Mead asks?  If he doubles down, Mead suggests two ways  Putin can run. First, he could pawn the country to Beijing.  China would bail him out — for a price.  Second, Putin could attempt to boost the price of oil by stirring up trouble in the Middle East.

For the Democratic party it’s like finding a pot of foreign policy gold in its backyard that they don’t know what to do with. The Washington Post reports that “New York Gov. Andrew Cuomo’s (D) administration said Wednesday that it will block gas development by hydraulic fracturing, bringing to an end a six-year study process and kicking off what could be years of lawsuits from developers who want to tap rich Marcellus shale deposits.”

Too late Andrew. America became the world’s biggest producer of oil in July, 2014, overtaking Saudi Arabia and Russia according to Bloomberg. “Oil extraction is soaring at shale formations in Texas and North Dakota as companies split rocks using high-pressure liquid, a process known as hydraulic fracturing, or fracking.” Not even the New York Democratic party can stop them now.


Posted at 4:16 pm on December 17th, 2014 by Richard Fernandez

Upstairs, Downstairs

There are certain places where you go to surf; Hawaii for instance. But there are places one goes for other reasons.  Eli Lake writes that the Senate report message implies that Pakistan is the place to go when you need someone rubber hosed.  Surfing, Hawaii. Torture, Pakistan.

The report, written by the majority staff of the Senate Intelligence Committee, cites six instances in which Pakistani authorities, in particular, obtained leads through interrogating al-Qaeda operatives that helped disrupt plots or locate other terrorist leaders. The Pakistanis often got first crack at detainees before they were sent to CIA prisons.

Take the example of Ammar al-Baluchi. In the movie “Zero Dark Thirty,” the torture of al-Baluchi is depicted as revealing the key piece of intelligence identifying Osama bin Laden’s courier, Abu Ahmed al-Kuwaiti. In 2011, the CIA was able to find and kill bin Laden because it had tracked the movements of al-Kuwaiti.

The CIA’s rebuttal to the Senate report says al-Baluchi gave up much more specific information on al-Kuwaiti after he went through the agency’s harsh interrogations. The Senate report, however, says al-Baluchi gave up al-Kuwaiti first to the Pakistanis.

One can think of that Southwest Asian country as the coercive interrogation equivalent of Alang, India — the shipbreaking capital of the world. Alang is where Europe sends ships that are too polluted or use too much asbestos to be handled under Union Rules. Instead they are dismantled by swarms of half-naked, unprotected Indian workers glad for the work.  Analogously, Pakistan is one of the countries all too willing to undertake jobs too dirty for more fastidious political climes.

Lake continues: “A former senior Pakistani diplomat who spoke to me on condition of anonymity said it’s likely that al-Baluchi and other detainees mentioned in the report were tortured; threatened with torture; or told that their family members would be in danger if they did not cooperate.” Does anyone care? Not anyone who counts at least.  And even if it happened, the Pakistanis did it; we didn’t. Our hands are clean. Plausible deniability is a very useful commodity.

However in exchange for the advantages of living outside Western standards Pakistan must endure the rigors of living under local ones.  Just a few hours ago the Taliban attacked a school for the children of military personnel in Peshawar, killing more than 130; shooting or beheading the kids wholesale when they weren’t burning the teachers alive in front of their pupils.  The assailants shouted “Allah Akbar”.  Allah Akbar Avenue is a two way street.

A Taliban spokesman said the Peshawar massacre was  ”just the trailer“, implying that the ‘next attraction’ was in the works; and that it was ‘coming soon’.  It will presently be ‘now showing’ at a location near you. NBC news claims the attack is in revenge for Pakistani operation against the Taliban in North Waziristan.


Posted at 1:14 pm on December 16th, 2014 by Richard Fernandez

Making Bail

The main question I would have had for Sydney siege perpetrator Man Haron Monis could I but reach him by ouija board was where he got the money to make bail and hire his lawyers.   He was up on 40 sexual sexual assault charges.   Fifty, if you believe the Washington Post.

That’s not counting charges of using the mail to commit crimes.

Monis used Australia Post to send offensive or in one instance, harassing, letters to relatives of Australian Defence Force members killed in combat in Afghanistan. Another letter was sent to relatives of an Austrade official who had been killed in the bombing of the Marriot Hotel in Jakarta in 2009. Droudis assisted Monis to send the letters.
Monis was charged with 12 counts of using a postal service in a way that reasonable persons would regard as being, in all the circumstances, offensive pursuant to section 471.12 of the Criminal Code and 1 count of using a postal service in a way that reasonable persons would regard as being, in all the circumstances, harassing pursuant to section 471.12 of the Criminal Code.

The mail rap was described by Altmedia under the heading Australians assault Islamic protester, which makes him out to be the victim of a lynch mob.

One man emerged from the crowd and punched him in the head; another in a passing car threw coffee all over him; angry words flew from passersby.

Yet the controversial Sheikh Haron stood his ground for three days outside the Downing Centre Courts, his white turban, tan robes and full beard shouting ‘Islam’ at the milling crowds. Heavy chains with padlocks draped over his body spoke of oppression and imprisonment. His coffee-stained sign read “Australians don’t want war”, a belief perhaps contradicted by the naked aggression directed at the lone protester.

This is the man, under the name of Man Haron Monis, now facing seven charges arising from letters he allegedly sent to the families of soldiers killed in Afghanistan. Media reports claim the letters blamed the soldiers for the killing of innocent women and children. The Jewish News reported: “Felix Sher, the father of a Jewish soldier who was killed on duty in Afghanistan earlier this year, has received a hateful phone call and a number of letters calling his son a “pig” and a “murderer”.

The Australian and The Daily Telegraph both quote another line, allegedly from one of the letters: “I feel bad that you have lost your son but I don’t feel bad that a murderer of innocent civilians has lost his life.”

Sheikh Haron denies this interpretation: “The word ‘pig’ and other words that media have claimed are from completely different sentences, they have cut them and the incomplete quotes have been taken out of context.”

And then there’s Sheik’s beef as accessory to murder. “Man Haron Monis was on bail on a charge of colluding with his girlfriend to murder his ex-wife, who was stabbed 18 times and set alight outside a western Sydney unit in April last year.” There’s a US connection to this last crime, incidentally. The torched ex-wife’s brother lives in California, who on hearing of the Sheik’s demise said “rest in hell f****n asshole”. Tut, tut. What bad language.


Posted at 4:04 pm on December 15th, 2014 by Richard Fernandez

The Sydney Cafe Siege

Nothing ever happens in Sydney, Australia.  If you Google “Sydney” and “siege” you will come up with Sydney Street Siege, which took place between anarchists and the British security forces headed by then Home Secretary Winston Churchill in 1911.  But that may change.

Something has finally happened in Sydney.  This is a theme which is now frequently being echoed on the radio: Australia was subliminally regarded, even by its inhabitants, as the last place on earth where anything bad could take place.  But that situation had been changing for some time.  By some accounts 200 Australian passport holders have traveled to Syria and similar places to learn the Jihadi trade. “The Australian Security Intelligence Organisation (ASIO) reported at the end of the year: ‘The situation in Syria, with the potential for violence spilling into other parts of the Middle East, increases the possibility of associated communal violence in Australia and remains a concern for ASIO’.”

As most readers may know by now, a gunman or gunmen has taken about a dozen hostages (up to 40 but accounts differ) prisoner in a cafe in Martin Place, which is the ceremonial heart of Sydney.  It’s near the Cenotaph war memorial and but a stone’s throw from the US consulate.  US citizens in the country have been warned to be aware of their surroundings, in the sense of being on guard against possible threats.

The scene of the incident is an upscale cafe, which now has a black “shahada” flag draped across it, saying “there is no God but Allah”.  There are reports that the police have rounded up a number of one of the suspect’s associates in Auburn, which is a suburb heavily populated by Muslims.

The situation has settled into a siege.  Prime Minister Tony Abbott has made an essentially content-free statement on the situation,  saying his thoughts are with the hostages and the cops are working on resolving the situation. However, he added nothing of substance to the open source facts.

But that hasn’t stopped the debate over hot-button issues like immigration and multiculturalism from pre-emptively starting up. One person on Twitter says:

WARNING: troll accounts of racists/fascists springing up to exploit #MartinPlaceSeige incidents. Block, report, delete. Human scum. #antifa


Posted at 5:43 pm on December 14th, 2014 by Richard Fernandez

The Statue of Limitations

Recently senior Sony executives shown to have made certain disparaging remarks in private emails about celebrities and president Obama are said to be resigning. Ever since emails hacked by the North Koreans were made public, their private behavior is being held to a politically correct standard. The irony is that one of the executives was a well-known Obama supporter.

Recently, Cornell Law professor William Jacobson argued that even if you are guilty of nothing illegal, PC can still find you guilty of something. Speaking on the Steve Malzberg show, Jacobson maintained the spate of accusations about college rape is not aimed at prosecuting anyone but ‘bringing down the patriarchy’; about expanding the space of political correctness.  Never mind if something was said  in whispered confidence or  jest, it may later be recalled to one’s immense disadvantage.

Recently the European Union demanded the establishment of the Right to be Forgotten. “The issue has arisen from the desires of some individuals to ‘determine the development of his life in an autonomous way, without being perpetually or periodically stigmatized as a consequence of a specific action performed in the past’”.  Perhaps alongside it there will soon be another — the Right to be a Hypocrite.

Wikipedia defines hypocrisy as “the claim or pretense of holding beliefs, feelings, standards, qualities, opinions, behaviors, virtues, motivations, or other characteristics that one does not in actual fact hold. It is the practice of engaging in the same behavior or activity for which one criticizes another.”

But the same article points out that hypocrisy can be useful.  ”Various studies have shown that there can be benefits from inducing hypocrisy. A 2004 report stated that smoking amongst college students decreases when hypocrisy was induced.  Furthermore, another study has stated that condom use increases amongst college students when hypocrisy is induced.”

Not only that, it helps people ‘get along’, for we often prefer the fake person to the real.  Hypocrisy is what makes PC bearable. It is a mask that keeps our facial muscles from sagging from fatigue.

The entire movement against Hate Speech is from one point of view a campaign to institutionalize organized hypocrisy, for it is tremendously useful, the axle grease of modern society. There is now a movement in Europe asserting the “right not to be offended” the better for us to get along.  Back in 2006, a labor union moved to dismiss a bus driver from his position after it became known he had joined the British National Party, which led to a long lawsuit.  After all, people had the right not to be subjected to the presence of a right-wing bus driver.


Posted at 3:20 pm on December 14th, 2014 by Richard Fernandez

Kling’s List

Arnold Kling‘s Not What They Had in Mind is a short book which lays out why he thinks the financial meltdown of 2008 happened. It costs 87 cents on Amazon Kindle and is an easy read, as economics books go.

His basic theory is that each generation of regulators creates an unintentional policy bomb from the ruins of the most recent crisis. They prepare to fight the last economic disaster and prepare the ground for the next one. One of his key graphs is a timeline of regulatory regimes starting from the 1934 National Housing Act until the 2004 Housing Interim Goals set for 2005-2008. The regs as they stood in 2008 were just the thing to prevent the disasters of the previous decades, but unfortunately that was not the crisis they faced.

He uses the regulatory map to explain how the finance industry and government had cooked up between them a way of doing business founded on loopholes. Constrained by the regulations, every player found ways to satis-fice their positions while staying within the letter of the law. They even created off-balance sheet risks that were altogether invisible.

And what you can’t see can’t hurt you. Or so the saying goes. But in reality the entire industry was sitting on huge pressure dome of largely unrecognized risk.

Neither the regulators nor the industry were really dishonest. Not really, or perhaps better said, not technically. Each sincerely believed there was no real harm done.  But they assumed a stable situation,  in the sense that huge herd of cattle is stable. Nobody could really envision how radically things could change when a landscape of placid cows suddenly turned into a maddened sea of thundering hooves.

The seeds for much of the current crisis were sown in the policy ‘solutions’ to previous financial and economic crises. … What made the crisis possible were the illusions that key participants held …

Financial executives had excessive faith in mathematical models of risk, in financial engineering, and in the “AAA” designation of the credit risk agencies … regulators themselves encouraged reliance on agency ratings …

the regulatory community shared the illusions of the key market participants. Regulators, too, placed too much confidence in financial engineering … thought that the dispersal of risk into the ‘shadow banking system’ made the core financial system safer … that securitization was the superior form of mortgage finance.

While the housing market provided the explosive for the implosion, what weaponized it was the the structure of the industry; the build-up of risk without a corresponding reserve of real capital to meet contingencies.  The rest, as we know, is history.  Once the avalanche started assets valued on an obsolete perception became debased and fed back into the cycle of worthlessness.

Kling’s book should make fascinating reading not just for economists but also for students of war and international security. His dissection of the financial crisis contains the generic components of any crisis. Kling’s anatomy of the meltdown consisted of these four things.

1. bad bets;
2. excessive leverage;
3. domino effects; and
4. 21st century bank runs.


Posted at 9:43 pm on December 13th, 2014 by Richard Fernandez