Stratfor Is a Joke and So Is Wikileaks for Taking It Seriously

The corporate research firm has branded itself as a CIA-like “global intelligence” firm, but only Julian Assange and some over-paying clients are fooled.

Left, Stratfor chief George Friedman in his Austin office in 2004. Right, Wikileaks’ Assange at a press conference today. / AP

On June 2, 2009, Anya Alfano of Stratfor, which describes itself as a private “global intelligence company,” sent an email to a colleague requesting some global intelligence on a certain trans-national civilian group on behalf of a powerful international client. That email has now been released to the world, along with five million others like it, by global transparency group Wikileaks, thus revealing Stratfor’s shadowy scheme.

According to Anya Alfano’s email, Stratfor’s target was PETA, the animal rights group, and its client Coca-Cola. Their top secret mission was to find out “How many PETA supporters are there in Canada?” and other tantalizing global secrets that could only be secured through such top-secret means as calling PETA’s press office or Googling it. Alfano concluded her chilling email, “I need all the information our talented interns can dig up by COB tomorrow.”

Shortly before the release, Wikileaks told the world to prepare for “extraordinary news.” In announcing today’s release, Wikileaks describes Stratfor as “a company that fronts as an intelligence publisher, but provides confidential intelligence services to large corporations.” The group’s announcement says that the released emails “show Stratfor’s web of informers, pay-off structure, payment-laundering techniques and psychological methods” and calls the company “a money-making scheme of questionable legality.” It adds, “The material shows how a private intelligence agency works, and how they target individuals for their corporate and government clients.”

Maybe what these emails actually reveal is how a Texas-based corporate research firm can get a little carried away in marketing itself as a for-hire CIA and end up fooling some over-eager hackers into believing it’s true.

The group’s reputation among foreign policy writers, analysts, and practitioners is poor; they are considered a punchline more often than a source of valuable information or insight. As a former recipient of their “INTEL REPORTS” (I assume someone at Stratfor signed me up for a trial subscription, which appeared in my inbox unsolicited), what I found was typically some combination of publicly available information and bland “analysis” that had already appeared in the previous day’s New York Times. A friend who works in intelligence once joked that Stratfor is just The Economist a week later and several hundred times more expensive. As of 2001, a Stratfor subscription could cost up to $40,000 per year.

Read the rest here.

Says he is good with his hands…

A naked meth addict gets taken down by the police after hanging around the welding shop.

Being long energy is getting to be a crowded trade. I don’t want to pick a top (in fact I am currently long Heating Oil), but the bull market in energy prices is gaining way too much attention — kind of like Silver did last March and April.

BY STEPHEN L. BERNARD AND KATY BURNE

Greece became the first euro-zone member officially to be rated in default, 13 years after the single European currency was adopted to strengthen the European Union.

Standard & Poor’s cut Greece’s long-term credit rating to selective default from double-C. The move was expected, as S&P said this month that it would consider Greece in default if it added “collective-action” clauses to its sovereign debt, effectively forcing all bondholders to accept a bond-swap offering. ..

Read the rest here.

By Elizabeth Lopatto

Maybe, as the novelist F. Scott Fitzgerald suggested, the rich really are different. They’re more likely to behave badly, according to seven experiments that weighed the ethics of hundreds of people.

The “upper class,” as defined by the study, were more likely to break the law while driving, take candy from children, lie in negotiation, cheat to increase their odds of winning a prize and endorse unethical behavior at work, researchers reported today in the Proceedings of the National Academy of Sciences.

Taken together, the experiments suggest at least some wealthier people “perceive greed as positive and beneficial,” probably as a result of education, personal independence and the resources they have to deal with potentially negative consequences, the authors wrote.

While the tests measured only “minor infractions,” that factor made the results “even more surprising,” said Paul Piff, a Ph.D. candidate in psychology at the University of California, Berkeley, and a study author.

One experiment invited 195 adults recruited using Craigslist to play a game in which a computer “rolled dice” for a chance to win a $50 gift certificate. The numbers each participant rolled were the same; anyone self reporting a total higher than 12 was lying about their score. Those in wealthier classes were found to be more likely to fib, Piff said.

“A $50 prize is a measly sum to people who make $250,000 a year,” he said in a telephone interview. “So why are they more inclined to cheat? For a person with lower socioeconomic status, that $50 would get you more, and the risks are small.”

Read the rest here.

http://www.youtube.com/watch?v=bUacUmhI7U4&feature=player_embedded#!

by Michael Levi
February 24, 2012

Rising gasoline prices have a way of bringing out the hidden energy pundit in all of us. Most speculation tends to focus on why oil prices might be rising and on how high they might go. But a second strand of questioning is probably even more important: What do rising prices mean for the world? There’s a lot of wisdom that’s accumulated over the past few decades in attempts to answer that question. But I have to wonder whether there aren’t some fundamental changes that might render a lot of it obsolete.

By JohnThomas Didymus

With just a week to go before Google changes to its new privacy policy that allows it to gather, store and use personal information, users have a last chance to delete their Google Browsing History, along with any damning information therein.

Tech News Daily reports that once Google’s new unified privacy policy takes effect all data already collected about you, including search queries, sites visited, age, gender and location will be gathered and assigned to your online identity represented by your Gmail and YouTube accounts. After the policy takes effect you are not allowed to opt out without abandoning Google altogether. But now before the policy takes effect, you have the option of deleting your Google Web History by modifying your settings so that Google is unable to associate data collected about you with your Gmail or YouTube accounts.

Tech News Daily reports that Electronic Frontier Foundation (EFF), a nonprofit organization based in San Francisco that advocates for online privacy, says: “Search data can reveal particularly sensitive information about you, including facts about your location, interests, age, sexual orientation, religion, health concerns, and more.” EFF advises all Google users to delete their web history.

Read the rest here.

A must read, concise yet detailed, well-sourced expose. Even the most lay of layperson can understand this presentation.

Here is the .pdf: The Skeptics Case

Joe Weisenthal

In just a matter of a few days, gasoline prices have become a major worry for people pondering what might drag down the U.S. economy.

The essence of the problem is this chart, posted by CFR’s Blake Clayton (via Brad Plumer):

CFR

Given where we are in the year, prices are unusually high. And if trends hold, then the national average will be well over the $4 freakout point sometime this summer.

But whenever the discussion turns to gas and oil, logic tends to die, and people start coming up with all kinds of bizarre explanations for what’s going on — explanations such as the Bernanke’s money printing, Obama’s domestic energy policy, Obama’s foreign policy, speculators, price gougers, and so on.

So we thought it would be a good time to just clear up some misconceptions, and explain what’s really driving the price.

Of course, you can’t start a discussion about gasoline without talking about oil. So let’s begin there.

John Paulson, the hedge fund manager seeking to rebound from record losses in 2011, told investors his Gold Fund will outperform his other strategies over five years, according to a person with knowledge of the matter.

The billionaire, at a meeting yesterday at the Metropolitan Club in New York, said the metal is the best hedge against currency debasement as countries inject money into their economies, said the person, who attended the event and asked not to be named because the information is private. Paulson also cited gold as a hedge against the euro currency, as a breakup may occur, and an eventual increase in inflation.

The manager told clients his own money comprises 55 percent of the Gold Fund’s $1.2 billion in assets, the person said. The fund, which can buy derivatives and other gold-related securities, declined 11 percent last year after the metal slumped 14 percent in the final four months.

Europe’s sovereign-debt crisis may continue to affect bullion in the near term, Paulson, whose firm manages $23 billion, said this month in a year-end letter to investors. The metal serves as the best long-term alternative to paper currencies, he said.

“We remain excited about the outlook for the Paulson Gold Funds over the next few years,” he said in the letter. “We would argue that the potential upside in gold outweighs the potential downside.”

Armel Leslie, a spokesman for New York-based Paulson & Co., declined to comment on the meeting with investors.

Read the rest here.

By Derek Kravitz, AP Real Estate Writer | Associated Press – Wed, Feb 15, 2012 5:01 PM EST

WASHINGTON (AP) — U.S. homebuilders are gradually growing more optimistic about the depressed housing market and believe homes sales could pick up sharply when the spring buying season begins.

The National Association of Home Builders/Wells Fargo said Wednesday that its builder sentiment index rose for a fifth straight month in February to 29, up from 25 in January. The index has climbed 15 points since September and is now at its highest level since May 2007.

Builders have generally become more hopeful during that stretch about current sales, sales six months out and foot traffic, the report shows.

Even with the brighter outlook, the industry has a long way to go. Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached 50 since April 2006, the peak of the housing boom.

A key reason homebuilders are more optimistic is they are seeing more people express interest in buying a home. And rising interest has occurred alongside other improvements that suggest the troubled housing market could pick up after four weak years.

Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. And home construction picked up in the final quarter of last year.

Still, home prices continue to fall, and builders keep slashing their prices to stay competitive. Last year was the worst for new-home sales on records dating back to 1963.

Ian Shepherdson, chief U.S. economist for High Frequency Economics, said the index is now consistent with new-home sales rising to more than 450,000 annually. While that’s below the 700,000 considered healthy, it would be an improvement from the recent trend of just over 300,000.

“The story here is that pent-up demand is being freed by much easier mortgage conditions, low rates and rising employment,” Shepherdson said. “It’s real.”

Read the rest here.

When the going gets tough, investors seek help from investment professionals. That is the conventional wisdom, but it seems that the worst economic downturn in the lives of most of today’s investors has prompted an unconventional response.

New research suggests that after going through a harrowing investment experience during the financial crisis, investors have emerged ready, willing and able to go it alone.

“The mainstream investor is increasingly self-directed in their decision making,” said Sophie Schmidt, an analyst with Aite Group LLC. “The online brokerages grew assets by close to $1 trillion between 2008 and 2010.”

GAINING MARKET SHARE

The consultant estimates that online brokers gained 3 percentage points of market share during that period while the wirehouses lost 1.1 percentage points and other retail brokerages lost 4 percentage points.

Between 2008 and 2010, assets on such direct-investing platforms as Charles Schwab & Co. Inc., Fidelity Brokerage Services LLC, TD Ameritrade Inc. and The Vanguard Group Inc. grew to $3.7 trillion, from $2.6 trillion, according to research released last week by Cerulli Associates Inc. Numbers aren’t yet available for last year.

Read the rest here.

By Steven Russolillo

Sears shares aren’t showing signs of fading anytime soon.

Sears shares have followed up yesterday’s 19% surge with another 6% advance as investors keep buying into Eddie Lampert’s plan to rebuild the brand.

Today’s surge means shares of Sears have more than doubled since the beginning of 2012. It’s been a staggering reversal of fortunes for a company that is mired in a deep transformation effort. Short covering has played a role as has Mr. Lampert’s increased stake in the company.

But few expected this kind of sharp return, especially after Sears was one of the S&P 500′s worst performers last year.

Shares are up 6% at $65.41. The stock is up 106% in 2012, the top performer in the S&P 500. Netflix is the only other stock within the index that has had at least a 50% run-up this year.

The sharp rally still hasn’t prompted Credit Suisse analyst Gary Balter to change his stance on Sears.

“We believe the equity valuation is well out of line with comparable retailers,” he says, while reiterating an underperform rating and $20 price target.

Read the rest here.

An excellent essay, The Curse of Seven, via the Psy-Fi Blog.

Excerpt:

Investing Overload

Information overload leads us into some quite nasty investing behaviours: we ignore parts of the data presented, we favour recent, vivid and easily available information over other types and gravitate towards well presented arguments, even if they’re spurious, as described here by Thomas Moellers. Basically, the idea that more information is better than less when it comes to stock analysis is wrong, unless you have a well-honed mental model and proper support tools. One of the simpler ways is to build a checklist of items that you need to cross-check: the valuation fundamentals that you’re interested in, the competitive position, the previous track record of the directors, or whatever.

via Climate Audit

Steve McIntyre

Some years ago, Daniel Butler hosted a television show called “America’s Dumbest Criminals” (trailer), entry to which Peter Gleick richly deserves.

In an interview some years later, Butler said that his favorite story was the robbers who had apparently planned the perfect gas station robbery. They took the licence plates off their van, wore ski masks. When the police arrived, they asked the attendant the usual questions, but there were no clues. Just when the police were leaving, the attendant volunteered that they’d left their phone number. In the rear window of the van, there was a For Sale sign with a phone number. The attendant had written down the phone number as the van left. The police called the phone number, inquired about buying the van, went for a test drive with the robber and drove him to the station.

Jay Leno described another incident, where the would-be bank robber demanded $40 million (milllllll-yun?). The teller said that they didn’t have that much on hand and suggested that he accept a cheque for $400,000. The robber agreed and gave the teller his name. She wrote him the agreed cheque, payment on which was stopped by the bank. When the robber tried to deposit the cheque into his own account, he was arrested.

Two Aussies achieved minor celebrity as bungling bank robbers in Colorado. They wore ski masks and goggles when they robbed a ski resort, but also wore name tags. It took the cops a mere eight minutes to identify them.

In another incident, a Tennessee policeman stopped porn starlet Barbi Cummings on a traffic violation. She then provided him with sexual favors in the back seat of the police car. The policeman took pictures of the encounter on his cell phone. He then emailed Miss Cummings and asked her to post the picture on her website so that he could prove the encounter to his pals. Miss Cummings reported that she still had to pay the traffic ticket as the cop had already called in the offence.

All of these felons were dumb, but they were all convicted and served time.

The newest entrant into the hallowed ranks of America’s Dumbest Criminals is surely Peter Gleick, MacArthur Genius. Gleick, who fancied himself the scourge of climate skeptics and imagined that Heartland’s climate program was funded by fossil fuel corporations and the Koch brothers, managed to trick a Heartland administrator and obtain confidential financial information by fraudulently impersonating a Heartland director. But the actual documents didn’t show that Gleick was feared by Heartland. Nor was even he mentioned. Nor did the documents show that Heartland’s climate program was funded by fossil fuel corporations or the Koch brothers.

So Gleick forged a document placing himself as Heartland’s nemesis, garnering the recognition and praise from Andy Revkin and others that he so desired.

His forged document read like an epistle from Dr Evil. (Megan McArdle of the Atlantic used the phrase “secret villain lair”). And like the famous scene where Dr Evil’s henchmen are dumbfounded by Dr Evil’s plan to extort a mere “milllll-yun” dollars for not destroying the world, one can picture the supposed Heartland henchmen in consternation at Dr Evil’s proposed Confidential Strategy against [long Dr Evil pause ….] Peter Gleiiiiiick. #2, #3 and the rest must have been scratching their heads. Not Al Gore. Not James Hansen. Not even the Climategaters. Peeeeeeeter Gleiiiiiiick.

And like Leno’s bank robber and the snowboarding Aussies, Gleick was identified almost immediately. Within hours of the so-called Confidential Strategy being announced as a fake, Steve Mosher identified Gleick as its author. In addition to painting himself into the picture, Gleick had written parts of the document in his own distinctive style – with distinctive word choices and punctuation. And even saved the scan in Pacific time zone.

Gleick has thus far confessed only to the fraudulent obtaining of actual documents, but has claimed innocence on the forgery. He claims that he was set up. By an evil genius who had put Gleick’s name in the forged document and written portions in Gleick’s distinctive style. Possibly by Dr Evil himself (who was unavailable for comment.)

Even if this part of Gleick’s impossible story were true (and the evidence against it is overwhelming), it would not prevent his entry into the hallowed halls of America’s Dumbest Criminals, in which he has surely garnered a place of particular honor. MacArthur Genius and America’s Dumbest Criminal.

Source

Hough: New research shows how federal spending on higher education can backfire.

Federal aid for students has increased 164% over the past decade, adjusted for inflation, according to the College Board. Yet three-quarters of Americans and even a majority of college presidents see college as unaffordable for most, and that sentiment has been steadily spreading, the Pew Research Center reports.

Two new studies offer clues on why. One measures the degree to which some colleges reduce their own aid in response to increased federal aid. The other suggests federal aid is helping to push college costs higher.

Recipients of federal Pell Grants have, by definition, limited means to pay for college, so they are likely to qualify for grants and price breaks given out by schools, too. But schools view a student’s sources of federal aid before deciding how much to give on their own, rather than the other way around. The result is a crowding out effect, where some schools give less as the government gives more.

Lesley Turner, a PhD candidate at Columbia University, looked at data on aid from 1996 to 2008 and calculated that, on average, schools increased Pell Grant recipients’ prices by $17 in response to every $100 of Pell Grant aid. More selective nonprofit schools’ response was largest and these schools raised prices by $66 for every $100 of Pell Grant aid.

Aid from schools over the past decade has increased about half as fast as federal aid, according to the College Board.

Perhaps worse for students than a crowding out effect is the Bennett Effect, named for William Bennett, who 25 years ago as Secretary of Education wrote for the New York Times, “Increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions.”

If subsidies puff up buying power and shift prices higher, as economics courses teach, could federal aid for college help create an affordability problem? After all, the federal government began spending more on college aid with the Higher Education Act of 1965 and the full funding of Pell Grants in 1975. Since 1979, tuition and fees have tripled after adjusting for inflation. That’s much faster than the increase for real estate and teacher pay.

There have been mixed findings on the Bennett Effect in recent decades, with some studies finding a dollar-for-dollar relationship and others, none at all. Determining why college costs are rising is a difficult task, after all. Stephanie Riegg Cellini of George Washington University and Claudia Golden of Harvard take a new approach, focusing on for-profit schools. Some of these are eligible to participate in so-called Title IV aid programs (named for a portion of the aforementioned Act) and some not.

After adjusting for differences among schools, the authors find that Title IV-eligible schools charge tuition that is 75% higher than the others. That’s roughly equal to the amount of the aid received by students at these schools.

Studies like these suggest that if one goal of government is to make college affordable, aid should become more thoughtful instead of merely more plentiful. And the total cost of federal spending on college isn’t fully known. That’s because spending on loans dwarfs that on grants. Student loans recently eclipsed credit card debt.

Read the rest here.

by Beverly Mann

Steven Rattner, the lead adviser on the Obama administration’s auto task force in 2009, has an op-ed titled “Delusions About the Detroit Bailout” in today’s New York Times.   Some highlights:

As a presidential aspirant, Mr. Romney evidently hasn’t felt a need to be consistent or specific as to what should have been done to address the collapse of the auto industry starting in late 2008. But the gist is that the government should have stayed on the sidelines and allowed the companies to go through what he calls “managed bankruptcies,” financed by private capital.

That sounds like a wonderfully sensible approach — except that it’s utter fantasy. In late 2008 and early 2009, when G.M. and Chrysler had exhausted their liquidity, every scrap of private capital had fled to the sidelines.

I know this because the administration’s auto task force, for which I was the lead adviser, spoke diligently to all conceivable providers of funds, and not one had the slightest interest in financing those companies on any terms. If Mr. Romney disagrees, he should come forward with specific names of willing investors in place of empty rhetoric. I predict that he won’t be able to, because there aren’t any.

Rattner then says that without government financing, the two companies would have been unable to undergo Chapter 11 reorganization, and instead would have been forced to cease production and liquidate.  He then addresses the claim that Obama improperly rigged the reorganization to favor the UAW:

Among Mr. Romney’s grievances — and to be fair, those of other opponents of the auto rescue — is that the auto task force trampled on bankruptcy precedents and even the law to effect President Obama’s plan of “shared sacrifice” by all stakeholders.

What he conveniently ignores is that the president’s plan was litigated throughout the federal court system — all the way to the Supreme Court, in the case of Chrysler — without so much as a nod to the opponents from a single judge.

“[E]very stakeholder received more from our plan than if the companies had been left to go bankrupt on their own,” Rattner says.

Read the rest here.