Jun 06

Today’s News 6th June 2017

  • Americans Are Taking More Time Off Work

    The United States, unlike many other industrialized countries, has no statuary agreement on taking paid vacation. Meaning: There is no law telling employers the minimum number of days they need to give their employees off work – that are also paid for.

    However, as Statista's Dyfed Loesche notes, Project:Time Off, which is sponsored by the U.S. Travel Association, has good news: After two decades of almost steady decline the average days of vacation have risen by 0.6 days year-over-year to 16.8 days in 2016.

    Infographic: Americans Are Taking More Time Off Work | Statista

    You will find more statistics at Statista

    "Despite this encouraging sign, taking time off continues to be a challenge in America’s always-on work culture," the authors of the latest report conclude. Still, in 2016, 662 million vacation days were left unused, four million days more than 2015.

    Taking time off doesn't just profit the individual workers who is said to become more productive after being able to recharge their batteries. According to the project's estimates, "the jump in vacation usage from 16.2 to 16.8 days delivered a $37 billion impact to the U.S. economy."

  • US Missile Defense Test: Realistic Assessment Of "Incredible Accomplishment"

    Authored by Andrei Akulov via The Strategic Culture Foundation,

    «The intercept of a complex, threat-representative ICBM target is an incredible accomplishment for the GMD system and a critical milestone for this program», said Missile Defense Agency (MDA) Director Vice Adm. Jim Syring. «This system is vitally important to the defense of our homeland, and this test demonstrates that we have a capable, credible deterrent against a very real threat». The MDA press release says the Ground-Based Midcourse Defense (GMD) element of the ballistic missile defense system provides combatant commanders the capability to engage and destroy intermediate and long-range ballistic missile threats to protect the U.S.

    Sounds really impressive but is it really a credible deterrent against any threat, especially in view that the single test cost about $244 million? Actually, the statement made by the head of the MDA implies that from now the US has the capability to counter intercontinental ballistic missiles. If so, the strategic balance with Russia is going to change in the US favor. It calls for going deeper into the subject.

    The upgraded Ground-based Midcourse Defense is destined to kill ICBMs in space. On May 30, the GMD was for the first time fired against an intercontinental ballistic missile (ICBM) – a much faster vehicle than short or intermediate range missiles. This time Exo-atmospheric Kill Vehicle (EKV) tested new engines while intercepting and destroying a target in a direct collision. Previous tests did not use an ICBM as a target or only tested certain components of the complicated system. One has to give the devil his due – it’s a significant step forward.

    A relatively small target was hit at a great distance measured in thousands of miles with both objects moving at breath taking speed at roughly 15,000 mph (24,000 km/h). The speed guarantees a kinetic kill and no explosive is required. It’s a good start though many more tests are needed to really acquire real exo-atmospheric kill capability. Only 32 interceptors are stationed at Fort Greely, Alaska, and four at Vandenberg Air Force Base with eight more to be deployed till the end of the current year. The interceptors have never operated in combat conditions and there are many more tests to go through before full operational capability is reached.

    Today, the GMD is hardly reliable.19 tests have been conducted since 1999 with only 9 of them successful. Combined with the high cost, the tests gave the system a bad reputation. The EKV is the main problem. If the May 30 test were a failure, the future of the GMD program would be questioned. It was a matter of survival rather than achieving a technological breakthrough.

    One does need to be a military expert to realize that a real success would be achieved after a number of tests conducted under various conditions. Will the interceptors hit the targets when electronic countermeasures and decoys are used? Normally, such measures reduce efficiency by roughly 50%. Russian and Chinese missiles carry sophisticated suites of countermeasures to overcome advanced ballistic missile defense (BMD) systems. The GMD interceptors can hit only unsophisticated missiles launched by those who are new to the game, like North Korea, for instance. It leaves open the question of how the GMD interceptors would perform under real war conditions.

    With its limited efficiency, the program’s estimated cost is $40 billion – an enormous sum to benefit the producers. But that’s not all. There is another costly program run by the MDA to counter Russian and Chinese missiles with the help of «directed-energy airborne laser» fired from a military drone. A weapon carried by remote-control aircraft loitering high over launch sites would add early interception ability to the GMD system, but it will require much time, effort and money and the doubts are great the laser will be powerful enough to do the job.

    The MDA has also accelerated development of a Multi-Object Kill Vehicle (MOKV), which turns each interceptor into a kind of precision-guided shotgun, firing multiple warheads at multiple incoming targets from a single GBI rocket. Originally scheduled to enter service around 2030, the MOKV will now go on GMD interceptors (GBIs) in 2025. Funding requested for 2018 is $259 million, out of a $7.9 billion MDA budget. Costly enough to make taxpayers ask questions about the expediency and efficiency of the plans.

    So, the May 30 test was not a great breakthrough and not a quantum leap as raving media reviews describe it. It was big step forward, but not more than that. The GMD remains rather powerless against contemporary ICBMs like the Russian RS-24 Yars, for instance. But it’s hardly a coincidence that the test was conducted against the background of three carrier groups being deployed near North Korea and the urgent deployment of THAAD missile defense systems in South Korea without prior knowledge of the South Korean government! This is a sign that the US mulls a preventive strike against Pyongyang.

    The May 30 test will no doubt soothe Americans’ concern over a possible North Korean response in case such an attack is carried out. The missiles North Korea has in the inventory are believed to threaten Hawaii with 11 bases across multiple service branches and the island of Guam, which is a military asset too.

    And it will certainly inspire the MDA to ask for more appropriations. The agency «relative to its size has probably wasted more money on canceled technology projects than any other federal organization in modern times», Loren Thompson, a well-known defense expert wrote for Forbes in 2011. More than five years has passed and some experts are warning that as a whole the testing record is not enough to instill confidence. The system may not be as reliable as people might think. Philip Coyle, a senior fellow at the Center for Arms Control and Non-Proliferation told CNN on May 31, «Based on its testing record, we cannot rely upon this missile defense program to protect the United States from a North Korean long-range missile».

    The US media ravishment appears to be exaggerated. The May 30 test was a limited success. But the North Korean threat will be exploited to spur the GMD and other very costly BMD programs.

  • Paul Craig Roberts Warns "Washington's Empire Is Not Unraveling"

    Authored by Paul Craig Roberts,

    The military/security complex spent seven decades building its empire. The complex assassinated one American president (JFK) who threatened the empire and drove another (Richard Nixon) out of office. The complex does not tolerate the election of politicians in Europe who might not follow Washington’s line on foreign and economic policy.

    Suddenly, according to the Western and even Russian media, the complex is going to let one man, Trump, who does not rule America, and one woman, Merkel, who does not rule Germany, destroy its empire.

    According to the presstitutes, by pulling out of the Paris Accord (the global climate pact) and stating that NATO members should contribute more to the alliance’s budget for which the US taxpayer has an overweighted share, Trump has caused Merkel to conclude that Europe can no longer rely on Washington. The discord between Trump and Merkel and Washington’s resignation of its leadership position has destroyed the Western alliance and left the EU itself on the verge of being torn apart.

    All of this is nonsensical sillyness. What has happened is this:

    Just as men in dark suits and dark ties carrying briefcases explained to Trump that it was not Washington’s policy to normalize relations with Russia, they explained to him that it was not Washington’s policy to exit the Paris Accord. Trump said something like this: Look, you guys, you have already required me to abandon my peace initiative with Russia and my intent to pull out of Syria. Now you are forcing me off my “America First” pledge. If people realize that I am not really the president, who are you going to rule through? What about a compromise?

     

    Here is the deal, as Trump made perfectly clear in his speech. He is temporarily pulling the US out of the Paris Accord while he immediately opens negotiations to rejoin the Paris Accord on terms less burdensome to Americans. In other words, the “pull out” is a face-saving gesture that will result in a small reduction in America’s share of the cost. We will have a “Trump victory” and no damage to the Paris Accord.

     

    Merkel facing reelection needs a boost that will refocus German attention from the one million Muslim refugees, bringing crime, rape, and terrorism in their train, that Merkel brought into Germany. Her dramatic statement that Europe can no longer rely on America was a perfect way to refocus attention. I wouldn’t be surprised if Trump and Merkel got together and agreed on how they would play this.

    Yet neither reporters nor commentators could report the obvious truth. Why? The Western media could not let pass the opportunity to denounce Trump for destroying American leadership and the climate, and environmental organizations seized the fundraising opportunity to oppose Trump’s climate destruction. Russian commentators saw hope for Russia in NATO and the EU breaking up as consequences of America going its own way.

    There are two serious implications of this media deception.

    One is that Americans and the world are blinded to the fact that there are power centers that constrain a president and are capable of substituting their agendas for the agendas on which the president campaigned. We saw this with Obama, but were given the explanation that Obama never meant it in the first place. Now we will get the same explanation of Trump. The fact that the president is constrained by the military/security complex and the financial sector will not come through. Thus, The Matrix’s myth of democracy bringing change via elections will continue to blind people to reality.

     

    A second consequence is that the Russians, ever hopeful to be part of the West while retaining national sovereignty, which no member of the EU or NATO is permitted to do, will see in the reported withdrawal of American leadership renewed hopes of joining Europe. If the Russians take seriously the New York Times anointment of Germany’s Merkel as “the liberal West’s last defender”, Russia might leave herself militarily and economically exposed by slowing military preparations and the development of economic relations with Asia.

    People can have little idea of actual events as long as news reporting and commentary reflect political agendas and hopeful aspirations.

  • "Create Your Re-Education Camp On Your Own Dime" – Lawmakers Propose Defunding Evergreen College

    Republicans in the Washington State legislature have proposed a bill to revoke $24 million in annual state funding for Evergreen State College after social justice warriors effectively shut down the school's campus for two weeks after a faculty member objected to a planned demonstration that asked all white students and staff to leave campus for a day, as Campus Reform reported.

    Protests erupted late last month after biology professor Bret Weinstein sent an email to his colleagues arguing that the planned “day of absence” protest was itself a “form of oppression.”

    The email was eventually published in the student newspaper, angering snowflakes on campus. On May 23, more than a month after Weinstein sent the email detailing his objections, an angry mob of about 50 students disrupted his class, accused him of being a racist and demanded that he resign, as Weinstein recounted in a column published in The Wall Street Journal.

    As Weinstein noted in WSJ, the day of absence protest is a tradition at Evergreen. In previous years, students and faculty of color would meet off campus. But this year, the events’ organizers – who claimed that the election of President Donald Trump made them feel “unwelcome” on the campus of the far-left institution – instead invited white students, staff and faculty to leave campus.

    Weinstein objected to the protest in an email sent to staff and faculty back in March where he argued that “on a college campus, one’s right to speak – or to be – must never be based on skin color.”

    And now, in response to the farce, Washington state lawmakers have proposed legislation to revoke Evergreen's public funding, calling the students an "embarrassment." The bill is being spearheaded by Republican State Representative Matt Manweller, who introduced it alongside a letter to Washington State's Human Rights Commission requesting an investigation into the administration’s conduct.

    “You are a taxpayer funded school and the taxpayers expect you to provide an environment of education not a dystopia of indoctrination,” Mr. Manweller wrote.

     

    “If your goal is to create a modern-day version of a reeducation camp, then do it on your own dime.”

    While it would strip away some of the school's funding, students at Evergreen would still be eligible for financial aid if it passes.

    Evergreen’s administration kowtowed to the protesters, with President George Bridges promising that no students would be disciplined for their disruptive and threatening behavior.

    “That they would allow students to threaten professors and other students based on their race is simply horrifying,” Manweller continued.

     

    “The administration bears direct responsibility for this situation. They hired the professors who have elevated the pseudo-science of ‘social justice’ to a religious movement. Now all dissent is crushed by threats of violence or actual violence."

     

    "These students and their administration are trying to undo the Civil Rights Movement. They are trying to re-institute a Jim Crow approach to education that Americans rejected over 50 years ago,” Manweller told Campus Reform.

     

    “We must never go back to a segregated society – whether it be drinking fountains, buses, or school buildings."

     

    “It is incredibly frightening that the administration at Evergreen would tacitly support Brown-shirt tactics we have not seen since 1930s Germany. That they would allow students to threaten professors and other students based on their race is simply horrifying,” Manweller exclaimed.

    While the bill’s chances of passing are unclear, Manweller says he’s optimistic.

    Meanwhile, the Washington Times reports that more than 50 faculty members have sent a letter urging the administration to discipline Weinstein for…wait for it…endangering the college’s students, faculty and staff:

    "Weinstein has endangered faculty, staff, and students, making them targets of white supremacist backlash by promulgating misinformation in public emails, on national television, in news outlets, and on social media.”

    Of course, the irony of this is statement is staggering. As Weinstein told WSJ: Campus police recommended he hold class off campus because of threats made by protesters, some of whom stopped and searched cars traveling through campus, allegedly looking for Weinstein.

  • One Belt, One Road, And One Debt Hangover

    Autohred by Jim Rickards via The Daily Reckoning,

    China is not only one of the world’s largest debtors, it is one of the world’s largest creditors.

    China uses debt not in the customary financial manner, but as a political tool to generate employment and maintain social stability. Likewise China uses loans and investment as a tool to advance its strategic interests. This may be good geopolitics in the short run, but it will be a disaster economically in the long run.

    Just as Chinese state owned enterprises (SOEs) can’t repay debts to Chinese banks, China’s foreign partners will not be able to repay debts to China itself. These twin disasters-in-the-making may converge in such a way that China’s assets disappear or become illiquid at exactly the time they are most needed to bail-out its own banking system.

    China has launched four major overseas investment initiatives in the past ten years. The oldest is their sovereign wealth fund, China Investment Corporation, or CIC, established in 2007. Sovereign wealth funds are a way for countries to invest their reserves in securities other than safe instruments such as U.S. Treasury notes.

    CIC today has assets of over $800 billion, spread among stocks, corporate bonds, hedge funds, private equity, commodities, and commercial real estate. Some of CIC’s investments are directly-owned enterprises, including gold mines in Zimbabwe.

    While these assets may outperform Treasury notes over time, they are also illiquid, and would tend to decline in value during a financial panic. This means that about 20%, of China’s reserves are unavailable for critical tasks such as bailing out the banking system or defending the currency.

    The second and third initiatives are the New Development Bank, NDB, created by the BRICS in 2014, and the Asia Infrastructure Investment Bank, AIIB, created by China in 2016. These have participation from 35 countries in the Asia/Australia region, and 18 other countries from outside that region, mostly in Europe. The United States refused to join.

    Although NDB and AIIB are both multilateral institutions, China was the principal sponsor and a major source of funding. It provided about $10 billion to NDB and $30 billion to AIIB.

    These banks will expand their lending capacity by issuing notes and will fund infrastructure projects in competition with the World Bank and its regional development banks — without interference from the U.S. on priorities.

    China, One Belt, One Road

    By far, the most ambitious outbound investment effort by China is the “One Belt, One Road” initiative. The “belt” refers to overland routes from central China to Europe. The “road” refers to maritime routes from eastern China to Southeast Asia, Africa, and Europe.

    It is a recreation of the original Silk Road caravan route of the thirteenth century, and China’s glory days as a naval power led by Admiral Zheng He in the Ming Dynasty in the early fifteenth century.

    The scope of the One Belt, One Road initiative is immense. It will include port facilities, railroads, highways, telecommunications channels, airports, transshipment facilities, renewable energy sources, and more strung out from Xian to Rotterdam, and from Guangzhou to Venice.

    The graphic on the previous page shows the main corridors of the belt and road, but there are many ranches and capillaries not shown in detail. Of these offshoots, one of the most critical is a transportation link from Kashgar in western China to the port of Gwadar on the Arabian Sea in Pakistan. This route passes through disputed territory in Kashmir that could lead to a war with China and Pakistan on one side, and India on the other.

    Another critical belt link runs from Kunming in southern China through Myanmar, Thailand, and Malaysia before terminating in Singapore.

    Silk Road China

    Main routes in China’s “One Belt, One Road” Initiative are shown above. The overland belt is in green and the maritime road is in blue.

    At a global leaders’ summit in Beijing on May 14–15, 2017, President Xi Jinping of China laid out his vision for the One Belt, One Road and committed $55 billion of lending capacity.

    Vladimir Putin, president of Russia, was one of many foreign leaders present. The U.S. sent a low level delegation, probably including CIA assets, attempting to get a read on Putin, Xi and the North Korean delegation.

    The problem with One Belt, One Road is that many of the potential recipients of development loans are not highly creditworthy or have a track record of defaulting on debts or requiring substantial debt restructuring in order to stay current.

    As with Chinese bank loans to SOEs, the NDB, AIIB, and One Belt, One Road efforts are not primarily economic but political. China is seeking to use its economic clout to create jobs and control critical infrastructure.

    In the end, China is attempting to create a geopolitical sphere of influence of even greater scope than the Japanese Empire prior to World War II, called by Japan “The Greater East Asian Co-Prosperity Sphere.”

    As with its other policies, China will turn liquid assets into illiquid assets in order to pursue its ambitions. This could make sense if nothing goes wrong. But, things will go wrong.

    China will face a monumental liquidity crisis sooner than later and find that its liquid assets have been turned into bridges to nowhere.

  • Bitcoin Spikes Above $2800 For First Time As "Japanese Buying Frenzy" Continues

    It appears the Japanese bought the f**king dip in Bitcoin last week, as tonight's session has seen s sudden surge in the price of the virtual currency, taking out prior record highs and topping $2800.

    Additionally, Bloomberg reports, the speculative frenzy in bitcoin is spilling over into several small cryto-currency-related stocks on the Tokyo Stock Exchange.

     

    But it's not just Bitcoin that is soaring, Bloomberg reports that Remixpoint Co., Infoteria Corp. and Fisco Ltd., have all seen volatile swings in their share prices after announcing businesses related to digital currencies.

    Remixpoint, which has more than doubled since tying up with Peach Aviation Ltd. to let customers pay for tickets with bitcoin, fell as much as 9 percent in Tokyo on Tuesday.

     

    Infoteria, up more than 50 percent in the past month, is testing ways to let shareholders vote by proxy using blockchain, bitcoin’s underlying technology. 

     

    Fisco, a financial information services provider, began operating a bitcoin exchange last year and is up about 25 percent since early May.

    All of these gains coincide with bitcoin’s rally, with the value of the virtual currency doubling against the U.S. dollar since early May. That has made the stocks of the these small-cap companies an attractive way for speculators to invest in cryptocurrency markets without buying them directly. That’s because investors can make bets via their brokerage accounts instead of taking risks with bitcoin exchanges, according to Naoki Murakami, a well-known day trader in Japan.

    “From about a month ago when all these virtual currencies started spiking like crazy, we began seeing the so-called ‘stocks of the virtual currency bubble,”’ said Murakami, a frequent speaker at investor conferences.

     

    “Not everyone is sure they can trust bitcoin exchanges. And some don’t have accounts there. That’s why they’re using the stock market to speculate.”

    Another reason why these stocks can become proxies for bitcoin is due to Japan’s relatively loose listing laws, some of which require no income and a market value of as little as $10 million before a company can go public. That’s made the Tokyo Stock Exchange home to hundreds of small companies.

    “It’s pure frenzy,” Murakami said.

    In April, Prime Minister Shinzo Abe’s government legalized digital currencies as a form of payment and placed rules around audits and security. That lent credibility to digital currencies, leading to some Japanese companies seeking partnerships with bitcoin startups.

  • London Mayor Responds To Trump, Says UK Government Should Cancel His Visit

    President Trump's repeated jabs…

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    at London Mayor Sadiq Khan drew responses from various UK politicians today, but until now Khan had calmly responded he "has better and more important things to focus on than" to waste his time responding to the president of the united states…

     

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    However, as The Telegraph reports, Khan has now spoken out, saying the US president's state visit to the UK should be cancelled.

    Following Tim Farron's, leader of the Liberal Democrat party, comments that Trump's invitation to visit the UK should be withdrawn. Mr Khan said Mr Trump had been wrong about "many things" and that the Government should cancel his state visit to the UK, which is expected to take place in October.

    “I don’t think we should roll out the red carpet to the president of the USA in the circumstances where his policies go against everything we stand for,” he said.

     

    “When you have a special relationship it is no different from when you have got a close mate. You stand with them in times of adversity but you call them out when they are wrong.

     

    "There are many things about which Donald Trump is wrong.”

    Theresa May, the Prime Minister, defended the mayor, while stopping short of directly criticising Mr Trump.

    "I think Sadiq Khan is doing a good job and it's wrong to say anything else – he's doing a good job," she told reporters at an election campaign event in London.

    The White House on Monday denied suggestions from US reporters that Mr Trump "picked a fight" with Mr Khan "because he was Muslim".

    "I think that to suggest something like that is utterly ridiculous," Sarah Sanders, the deputy White House press secretary, told reporters.

  • The Qatar Turmoil Fallout: Flights, Food, Football And More

    Today’s stunning expulsion of Qatar from the Saudi “circle of friends” prompted some analysts to ask if in Qatar’s immediate futures is a departure from OPEC. In a note by Mitsubishi UFJ, the bank notes that “a full-fledged confrontation will, without any doubt, put pressure on the current compliance rate of OPEC members to the adherence of the 9-month agreement to cut production” and adds that “whilst Qatar’s pledge was only to cut 30,000 barrels to 628,000 barrels (as part of the OPEC agreement), there are potential risks of Qatar leaving OPEC which could significantly impact oil prices.”

    That said, the political fallout for Qatar, and its remaining allies, could have broader implications than merely the collapse of the already dying oil cartel; as MUFJ notes “a rapprochement between Iran and Qatar would be a vast security risk to the U.S. military” while closure of land/sea/air contacts could have adverse “implications for the airlines, shipping and road freight industries.”

    According to analysts and pundits cited by the BBC, the biggest threats facing the tiny but rich nation, with a population of 2.7 million, include food, flights, construction, people, trade and… football.

    Flights

    As reported overnight, Abu Dhabi’s Etihad Airways and Dubai’s Emirates are suspending all flights to and from Doha, starting from Tuesday morning. Both carriers operate four daily return flights to Doha. Budget carriers FlyDubai and Air Arabia are also cancelling routes to Doha, with other airlines, including Bahrain’s Gulf Air and Egyptair expected to follow suit. It comes after Saudi Arabia, the UAE, Bahrain and Egypt all said they would stop flights in and out of Qatar, and close their airspace to the country’s airline, Qatar Airways.

    And it is Qatar’s flag carrier that risks being the biggest loser. Its flights to places like Dubai, Abu Dhabi, Riyadh and Cairo will stop. That is dozens of flights a day.

    Qatar Airways has already said it is cancelling its services to Saudi. It said: “All customers booked on affected flights to and from the Kingdom of Saudi Arabia will be provided with alternative options, including the option of a full refund on any unused tickets and free rebooking to the nearest alternative Qatar Airways network destination.”

    But a bigger, if not existential threat, to Qatar Airways is being banned from large chunks of airspace: according to a report by CAPA — Center for Aviation, “losing Saudi, Bahrain and UAE airspace would effectively ground Qatar Airways,” CAPA. That’s because Qatar actually has very little airspace relative to the size of the country.

    “It is largely surrounded by Bahrain airspace (the Bahrain FIR), a slither on the south is managed by Saudi Arabia while the UAE is on the eastern border,” CAPA stated. While losing access to Saudi airspace will force Qatar Airways into the costly maneuver of rerouting its Africa-bound flights, losing access to Bahrainian airspace could be catastrophic because it almost completely encircles Qatar.

    That said, while the various gulf nations are free to refuse landing rights, it remains unclear if Bahrain and the UAE can legally ban Qatar Airways from their airspace. As signatories to the International Air Services Transit Agreement, Bahrain the UAE can’t legally shut off its airspace to fellow signatory Qatar. Saudi Arabia, however, is not an IASTA member country and can legally shut Qatar Airways out.

    On Monday, Flightradar24 reported that neighboring Bahrain notified pilots that it will limit flights to and from Qatar by Qatari aircraft through its airspace to a single air route. This means, even if Qatar Airways isn’t grounded, it will be subject to heavy air traffic congestion.

    Qatar Airways’ growth has come through positioning itself as a hub airline, connecting Asia and Europe via Doha. “If a journey to Europe that used to take six hours now takes eight or nine because it has had to change routes, then that makes it far less appealing and passengers might look elsewhere,” says Ghanem Nuseibeh, director at advisory firm Cornerstone Global.

    Food

    While desert states in general struggle to grow food, food security is a particular issue for Qatar given the only way into the country is a single border with Saudi Arabia. Every day hundreds of trucks cross the border, and food is one of the main supplies. About 40% of Qatar’s food is believed to come via this route. That may no longer be an option after Saudi Arabia said it will close that border and when the trucks shipments end, Qatar will become reliant on air and sea freight.

    “It will immediately cause inflation and that will directly affect normal Qatari people,” says Nuseibeh. “If things start costing significantly more, then you’re going to see the Qatari people putting increasing political pressure on the ruling family for either a change of leadership or a change of direction.” The Cornerstone analyst also pointed out that many poorer Qataris make daily or weekly trips to Saudi to do their grocery shopping as it is cheaper. Clearly a closed border means this will no longer be possible.

    Football

    The prospect of Qatar hosting the 2022 World Cup has plunged into the most serious doubt after the diplomatic scandal. According to the Guardian, the multibillion-dollar preparations to host the 2022 tournament, which involve building nine stadiums and huge infrastructure, is put into perspective by local reports that Qataris are so worried about the blockade that they are stocking up on food. The border with Saudi Arabia is the only road route into the country; Qatar relies on sea ports for its materials and the blockade of airspace is a huge logistical handicap to the country and its flagship airline, Qatar Airways.

    The “supreme committee” responsible for building the 2022 World Cup facilities did not issue a public statement but a source acknowledged that the seriousness of the crisis is greater than any of the formidable challenges Qatar has faced since winning the vote in 2010 from Fifa’s now discredited executive committee. The tournament has been switched to the winter to avoid searing summer temperatures, a series of investigations has been held into strongly denied corruption allegations and there has been worldwide criticism of the country’s treatment of its migrant construction workers.

    The English Football Association did not comment on the crisisbut the German FA (DFB) president, Reinhard Grindel, said he would discuss it with the German government and Uefa. Grindel promised to look for a “political solution” but said: “The football community worldwide should agree that … major tournaments should not be played in countries that actively support terror.”

    Construction

    A new port, a medical zone, a metro project and eight stadiums for the 2022 World Cup are just some of the major construction projects going on in Qatar right now. Key materials, including concrete and steel come in by ship but also by land from neighbouring Saudi. The closure of that border could, as with food – push up prices and lead to delays.

    A materials shortage is already a threat that looms over Qatar’s construction industry. This risks making things worse. A lengthy closure of the airspace and land borders would “wreak havoc on the timeline and delivery” of the World Cup, says Kristian Ulrichsen, a Gulf expert at the US-based Baker Institute.

    People

    The move to end ties bans citizens from Saudi, Egypt, Bahrain, the United Arab Emirates, Libya and Yemen from travelling to Qatar, living there or passing through it, according to the Saudi government. People affected have 14 days to leave. Meanwhile Qataris will have the same amount of time to get out of Saudi Arabia, the UAE and Bahrain.

    More significant though would be if Egypt issued a similar ban. According to one recent report about 180,000 Egyptians live in Qatar – with many involved in engineering, medicine and law as well as construction. A loss of that workforce would pose a problem for both local and international firms operating in the Gulf state.

    Trade and business

    Nervousness over the unprecedented situation left Qatar’s main share index more than 7% lower on Monday – its biggest drop in nearly a decade – amid worries about the investment climate. Many Gulf firms have a presence in Qatar, including in retail. Those stores are likely to to close, at least temporarily, believes Nuseibeh. Indeed, we’re already seeing business deals begin to crumble – major Saudi football team Al-Ahli has cancelled a sponsorship deal with Qatar Airways.

  • FBI Arrests NSA Contractor Who Leaked Top Secret "Russian Hacking" Document To The Intercept

    Earlier this afternoon, the Intercept reported that according to a “top secret NSA document”, Russian Military Intelligence “executed a cyberattack on at least one U.S. voting software supplier and sent spear-phishing emails to more than 100 local election officials days before election.”

    The NSA document, reportedly dated May 5, analyzes recently acquired intelligence about “a months-long Russian intelligence cyber effort against elements of the U.S. election and voting infrastructure.” The document notes that investigation only began in the last few months. The document claims the investigation was spurred by “information that became available in April 2017.”

    According to the Intercept, the report is “the most detailed U.S. government account of Russian interference in the election that has yet come to light. It is said to reveal that that Russian hacking may have penetrated further into U.S. voting systems than was previously understood” and “states unequivocally in its summary statement that it was Russian military intelligence, specifically the Russian General Staff Main Intelligence Directorate, or GRU, that conducted the cyber attacks described in the document.” This is what the document alleges:

    Russian General Staff Main Intelligence Directorate actors … executed cyber espionage operations against a named U.S. company in August 2016, evidently to obtain information on elections-related software and hardware solutions. … The actors likely used data obtained from that operation to … launch a voter registration-themed spear-phishing campaign targeting U.S. local government organizations.

    While the manufacturer victimized by the attack has its name masked throughout the report, the Hill suggests that it might be VR Systems. The email account used to spear-phish customers is listed as vr.elections@gmail.com, and the attack made use of malware-infected files with titles that reference to the EViD poll book system. The report makes reference to voter-registration themed phishing attacks against third parties possibly using information from the account, making it likely the company is somehow related to registration or voter roles. VR’s website says EViD products were used in California, Florida, Illinois, Indiana, North Carolina, New York and Virginia. The company is based in Florida.

    The NSA document alleges the GRU hacked the voting systems company using a false Google alert requiring a target to enter login credentials. According to the report, it also attempted a parallel campaign using a false email account meant to be confused with a second company.  And yet, despite all that “sophistication”, Russia’s smartest, government hackers somehow left a trail so obvious that it would allow the NSA to conclude in under a month, that Russia’s GRU was behind it. Which is also where the story become questionable because at roughly the same time, another set of alleged Russian hackers, the Shadow Brokers, was in possession (and trying to sell) weaponized CIA methods, allowing any potential hacker to adopt the identity of anyone else, even the CIA or NSA.

    Lack of coherent narrative aside, according to the official report, on one hand the NSA summary judgment conflicts with Vladimir Putin’s ongoing denials that Russia had interfered in foreign elections: “We never engaged in that on a state level, and have no intention of doing so.” The NSA report, the Intercept claims, “displays no doubt that the cyber assault was carried out by the GRU.”

    That said, the report does not claim that voting machines were hacked, a once-popular post-election theory from Democrats, nor does it state whether the information pertaining to the voting systems could be used to hack those systems. 

    On the other hand, the same Intercept article notes that  “a U.S. intelligence officer who declined to be identified cautioned against drawing too big a conclusion from the document because a single analysis is not necessarily definitive.” Still, the assessment concluded with high confidence that the Kremlin ordered an extensive, multi-pronged propaganda effort “to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential presidency.”

    It is not immediately clear how Russian GRU hackers would make the leap between a spear-phishing campaign of election officials to successfully “denigrating Secretary Clinton, and her electability and potential presidency” unless of course that is merely the biased assessment of the original report’s author, in which case it is no different, or “useful”, than the intel report released in January which “found” Russian involvement (much like this one allegedly did).

    Since the document is confidential, and is only held by the Intercept, and since it will not be unclassified, nothing that is contained inside it can be verified, aside from the Intercept’s own summary take. Furthermore, according to the author, not even the leaked document “shows the underlying “raw” intelligence on which the analysis is based.” In other words, just like the January Russian hacking report, it is yet another allegation. At that point, it once again devolves to “he said, she said” mutual allegations.

    Where the story gets more interesting, however, is that  just hours after the Intercept reported on the top secret document, the FBI arrested and charged the woman (with the peculiar name Reality Leigh Winner) they say leaked a Top Secret document to The Intercept.

    This is what the DOJ released moments ago:

    Federal Government Contractor in Georgia Charged With Removing and Mailing Classified Materials to a News Outlet

     

    A criminal complaint was filed in the Southern District of Georgia today charging Reality Leigh Winner, 25, a federal contractor from Augusta, Georgia, with removing classified material from a government facility and mailing it to a news outlet, in violation of 18 U.S.C. Section 793(e).

     

    Winner was arrested by the FBI at her home on Saturday, June 3, and appeared in federal court in Augusta this afternoon.

     

    “Exceptional law enforcement efforts allowed us quickly to identify and arrest the defendant,” said Deputy Attorney General Rod J. Rosenstein. “Releasing classified material without authorization threatens our nation’s security and undermines public faith in government. People who are trusted with classified information and pledge to protect it must be held accountable when they violate that obligation.”

     

    According to the allegations contained in the criminal complaint:

     

    Winner is a contractor with Pluribus International Corporation assigned to a U.S. government agency facility in Georgia. She has been employed at the facility since on or about February 13, and has held a Top Secret clearance during that time. On or about May 9, Winner printed and improperly removed classified intelligence reporting, which contained classified national defense information from an intelligence community agency, and unlawfully retained it. Approximately a few days later, Winner unlawfully transmitted by mail the intelligence reporting to an online news outlet.

    Once investigative efforts identified Winner as a suspect, the FBI obtained and executed a search warrant at her residence. According to the complaint, Winner agreed to talk with ag

     

    nts during the execution of the warrant. During that conversation, Winner admitted intentionally identifying and printing the classified intelligence reporting at issue despite not having a “need to know,” and with knowledge that the intelligence reporting was classified. Winner further admitted removing the classified intelligence reporting from her office space, retaining it, and mailing it from Augusta, Georgia, to the news outlet, which she knew was not authorized to receive or possess the documents.

     

    An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.

     

    The prosecution is being handled by Trial Attorney Julie A. Edelstein of the U.S. Department of Justice’s National Security Division’s Counterintelligence and Export Control Section, and Assistant U.S. Attorney Jennifer Solari of the U.S. Attorney’s Office for the Southern District of Georgia. The investigation is being conducted by the FBI.

    Meet Reality Winner: the new Edward Snowden:

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    So another “Snowden”-type NSA contractor who went rogue, only this one wasn’t smart enough to cover her tracks, and instead of seeking asylum in Russia, Reality Winner will now spend years in US Federal Prison. Also, perhaps notable, is that instead of approaching Wikileaks, the leaker decided to go with The Intercept this time.

    As for the underlying allegation, that Putin lied not only in St Petersburg and to Megyn Kelly most recently, and that Russia somehow did try to hack a “named US company to obtain information on elections-related software and hardware solutions”, even though the report does not reveal the underlying “raw” intelligence – i.e., evidence – on which the analysis is based, we look forward to this stirring up yet another round of media frenzy just as the Russian hacking narrative was slowly taking a back seat to the the upcoming featured spectacle, this Thursday’s James Comey testimony about being strongarmed by Trump to stop investigating Mike Flynn, which among other things will hopefully explain how nearly a year after these alleged hacks, aside from the occasional leaked report without evidence, there is still no actual evidence – leaked or otherwise – confirming that Russia’s GRU did indeed “hack” the election.

    * * *

    Update: some additional details have emerged about leaker Reality Leigh Winner, who for some inexplicable reason had a top security clearance.

    According to the Guardian’s John Swaine, Winner  is a former US Air Force linguist who speaks Pashto, Farsi & Dari

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    * * *

    Here she is calling the president a “piece of shit” on Facebook over his handling of DAPL:

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    * * *

    Winner posting an autographed photo of Anderson Cooper on facebook.

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    * * *

    Her facebook post before the election in which she says “this Tuesday when we become the United States of the Russian Federation, Olympic lifting will be the national sport.”

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    * * *

    Here she is visiting the office of US Senator Perdue before leaking the classified docs.

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