The Big Picture

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• Macro problems, micro solutions
• NSA Apologists Try to Smear Snowden
• 10 Midweek PM Reads
• What is the Best Asset Class in 2014 Going to Be?
• 10 Midweek AM Reads
• Google’s Nest Labs Acquisition is a Smart Defensive Move
• SNOLAB: In Pursuit of Dark Matter

Macro problems, micro solutions Posted: 23 Jan 2014 02:00 AM PST

NSA Apologists Try to Smear Snowden Posted: 22 Jan 2014 07:30 PM PST NSA Apologists Try to Smear Snowden as a "Russian Spy" … Exactly Like Authorities Tried to Smear Daniel Ellsberg, Ben Franklin and Samuel Adams ~~~ But Even the FBI and NSA Say There's No Evidence that Snowden Worked With Others ~~~ While NSA apologists like Mike Rogers say that Snowden is a Russian spy, the New York Times observes: Officials at both the N.S.A. and the F.B.I. have said their investigations have turned up no evidence that Mr. Snowden was aided by others. The Freedom of the Press Foundation points out that the Nixon administration also tried to smear Daniel Ellsberg as a Russian spy: While it's well-known that Rep. Rogers has a long history of making things up and telling the media, it's less known that his tactics are drawn straight from Richard Nixon's playbook, when his administration tried to discredit Daniel Ellsberg after he leaked the Pentagon Papers to the New York Times in 1971. Ellsberg is commonly looked at as the quintessential whistleblower today, but shortly after he leaked the top secret Vietnam War study, the Nixon administration made a concerted effort to paint him as a Soviet spy in the press, using anonymous quotes and non-existent 'secret' evidence. (Sound familiar?) This is from the New York Times on August 11, 1973: An attorney for Dr. Daniel Ellsberg has chided the Senate Watergate committee for failing to challenge what he called "totally false and slanderous" testimony by the former White House aide, John D. Ehrlichman, suggesting that Dr. Ellsberg delivered copies of the Pentagon papers to the Soviet embassy. "During his testimony before your committee, Mr. Ehrlichman repeatedly asserted that the Pentagon papers had been given in 1971 to the Soviet Embassy and implied that this might have been done by my client, Dr. Daniel Ellsberg, or with his knowledge," the attorney, Leonard B. Boudin, who wrote the committee. "These allegations are made of whole cloth; they are totally false and slanderous of Dr. Ellsberg." In December 1973, the New York Times reported on Nixon administration's alleged reasoning for starting the White House Plumbers unit, which conducted several illegal operations against Ellsberg and the Watergate break-in: One was a fear—nourished in part, some sources said, by Henry A. Kissinger, then the President's national security adviser—that Daniel Ellsberg, who said he turned over the Pentagon papers to the press, might pass on to the Soviet Union secrets far more important than any information contained in the Pentagon study of the Vietnam war. Specifically, the sources said, the White House feared that Dr. Ellsberg, a former Rand Corporation and Defense Department official, may have been a Soviet intelligence informer who, in the weeks after publication of the Pentagon Papers in June, 1971, was capable of turning over details of the most closely held nuclear targeting secrets of the United States, which were contained in a highly classified documents known as the Single Integrated Operation Plans, or S.I.O.P. The second major concern was that a highly placed Soviet agent of the K.G.B., the Soviet intelligence agency, operating as an American counterspy, would be compromised by continued inquiry by the special prosecutor and the Senate Watergate committee into the Ellsberg case. The agent informed his F.B.I. contact that a set of the Pentagon papers had been delivered to the Soviet Embassy in Washington shortly after a Federal court had ordered The Times to stop printing its series of articles on the papers. In July 1974, the New York Times published a leaked Nixon administration memo written in August 1971 on how they could discredit Ellsberg's principal lawyer Leonard B. Boudin: Most of what Daniel Ellsberg has said in public since he acknowledged stealing the Pentagon Papers seems calculated to position him as having responded to an order of morality higher than his onetime solemn undertakings to his country. This rationale, let it be remembered, was earlier employed by atomic spies Klaus Fuchs, David Greenglass, Morton Sobell and Bruno Pontecorvo. And although there is as yet no conclusive evidence that Daniel Ellsberg acted on specific instructions of the Soviet Union—as did those earlier informants—the distinct possibility remains that Ellsberg's "higher order" will one day be revealed as the Soviet Fatherland. For history is replete with repetition and notable similarities exist. … But in the case of Daniel Ellsberg the benefits of [an acquittal] will accrue to the Soviet Union, the Vietcong and Communist China. For if Boudin is again successful—as he has been so often in the past—the agents of foreign powers will enjoy a liberty of action never before accorded them in the history of our country. Whether it's the Nixon administration or anyone else, any allegations made with no proof—and under the veil of secrecy—deserve extreme skepticism and strong pushback from the press. Rep. Mike Rogers' evidence-free smears against Edward Snowden are no different. Indeed, Founding Fathers Benjamin Franklin and Samuel Adams did exactly what Edward Snowden did … and were likewise labeled as traitors by the British government.

10 Midweek PM Reads Posted: 22 Jan 2014 01:30 PM PST My afternoon train reads: • Markets Price in Fed Rate Changes Long Before They Happen (Real Time Economics) • The Costs of Working Too Much (New Yorker) but see The "middle class" myth: Here's why wages are really so low today (Salon) • WTF headline of the day: Buffett Makes Millions Selling 500-to-1 Monkey-Linked Derivatives (Bloomberg) • Wall Street Banks Remain Vulnerable on Derivatives Five Years After Financial Crisis (WSJ) see also The ‘too big to fail’ problem just got worse (Telegraph) • Some People Love Money So Much They Can’t Live Without It (Bloomberg) • With New Thinking and Technology, Some Businesses Get Creative With Pricing (NY Times) • Prosecutors Balk, Bankers Walk (Bloomberg) • How do you mend a broken cellphone screen? There’s more ways than one (WSJ) • The NFL's $1 Billion Headache Isn't Going Away (Fiscal Times) • Hilarous:  20 Signs You’re A FLID: F*cking Long Island D-bag (Elite Daily) What are you reading?   Newbies Learn Ropes About Higher Rates From Old Hands Source: WSJ

What is the Best Asset Class in 2014 Going to Be? Posted: 22 Jan 2014 10:00 AM PST Source: JP Morgan   Whenever anyone asks me about my favorite sector or market for the coming year, I like to show the table above. While not quite a quintillion-to-one bet, the table reveals what a challenge it is to consistently identify the best asset class for the coming year. No one seems to be able to do it regularly. The recognition of that truth hasn’t stopped anyone from trying, as noted in the Bloomberg News story earlier this week: Hedge Funds' Assets Increase 17% to Record $2.63 Trillion. Hence, the romancing of alpha continues even if it means forsaking beta.   Continues here

10 Midweek AM Reads Posted: 22 Jan 2014 06:47 AM PST Good snowy morning. Here are my weather-delayed commuting reading materials: • Private Investment and the Business Cycle (Calculated Risk), see also Recession's True Cost Is Still Being Tallied (NY Times) • Decision making under uncertainty (O'Reilly Radar) • UBS at Davos: ‘Technology will save the day' (FT Alphaville), see also Macro problems, micro solutions (PDF) (UBS) • Managing Risk In A Mature Bull Market (Ciovacco Capital)   Continues here

Google’s Nest Labs Acquisition is a Smart Defensive Move Posted: 22 Jan 2014 04:55 AM PST I have been thinking about Google's acquisition of Next Lab's last week for the eye-popping sum of $3.2 billion dollars. There have been numerous criticisms of the acquisition in terms of cost, with some chatter of this as evidence of a bubble in Silicon Valley. Perhaps it is worth considering this from a different perspective. If we look at some of the biggest tech errors of the past decade, we see a very specific risk arising from new technologies to existing companies. The two that come to mind are Blackberry ignoring the threat from touch screen smart phones (Apple iPhone) and Microsoft ignoring the tablet as a threat to their basic Windows/PC business (Apple iPad). Note that Google's Android acquisition allowed the company to be stay competitive with Apple's disruptive technologies – even as the two previous leaders fell dramatically from their prior number one spots. Android phones are ahead in market share (but not profitability) versus the iPhone; Android tablets are the default alternative to iPads. Blackberry saw its market share plummet. Microsoft is encountering a seismic shift in PC sales. continues here

SNOLAB: In Pursuit of Dark Matter Posted: 22 Jan 2014 03:00 AM PST At the bottom of a nickel mine near Sudbury, Ontario, scientists at one of the world’s most sophisticated particle physics observatories are investigating one of the biggest mysteries of the cosmos: What is dark matter? Science correspondent Miles O’Brien helps to shed some light on the research at SNOLAB. Scientists search for understanding of dark matter in deep underground lab Source: PBS

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