Wednesday, 21 May 2014

Canadians Lose Footing on Internet Freedom

We’ve long known of Canada as one of the “five eyes,” those nations in the Anglo-sphere that so willingly cooperate when spying on each other’s and their own citizens. It was when Edward Snowden leaked a treasure trove of information about the NSA and PRISM that the scales fell from our eyes and most of us lost that naïve sense that we had a relationship of mutual trust with our respective governments.

But now Canada wants to expand their police presence online? Maybe I’m just proud or can’t shake that lingering wisp of nationalism, but I always thought of Canada as a stalwart bastion of liberty and democracy. But she is now proving to be swayed by fear-based rhetoric, convinced to discard (just this once, of course) the due process of democracy when it comes to the Internet.

It all started with the failed Bill C-30, which was defeated, in part, by the over 150,000 citizens’ signatures collected by Now, Conservative Justice Peter MacKay (Nova Scotia) is introducing C-30 with a makeover, calling it C-13, or the “Protecting Canadians from Online Crime Act.” The spin is that C-13 is meant to put a stop to cyberbullying once and for all, when if fact, only five out of roughly 70 pages in the bill cover cyberbullying. The rest of the bill sets forth provisions for types of warrants that are very easy to obtain and allow police to monitor and collect online data about any Canadian resident or citizen. It also grants ISPs immunity from lawsuits or prosecution if and when they do surrender private data.

The “repackage and spin” of unpopular bills is nothing at all new to the Western political process. In the U.S., when Americans initially rejected a bill that would form their central banking institution, the Federal Reserve, Republican Senator Nelson Aldrich simply repackaged the bill, passed it on to a couple of Democrats and spun it as a bill to heavily regulate (and punish) America’s banks, who were almost universally blamed for the periodic economic downswings common at the time. Well, that bill was possibly the greatest boon to America’s—or even the world’s—banks to date. Perhaps a more relatable example is the American online regulation bills known as SOPA, PIPA, CISPA or the half dozen or so others than keep getting thrown up by Congress and defeated by public outcry.

MacKay and his fellow MPs all know that the whole cyberbullying thing is a ruse. MacKay has even been called out on it publicly during a debate over whether or not to push C-13 through Parliament with a motion to allocate a time limit of two days for a vote. Clearly MacKay was attempting to suppress democratic debate on the bill, just wanting to get it through as quickly as possible without the fussy back-and-fort of any possible dissenting voices.

During the debate, NDP Justice Ève Péclet said: “I would like to remind the minister that only five pages of his 70-page bill deal with cyberbullying. This bill goes much further than just addressing cyberbullying. I would like to remind the minister that we have already asked him to divide the bill so that we can pass a bill on cyberbullying. He knows full well that he is talking through his hat when he says that the opposition is against measures to address cyberbullying.”

Péclet  then asked, referring to the fact that very few representatives had been allowed to speak on the bill, if MacKay and the government planned to reform their entire view of what is and what is not a democracy or a democratic debate. MacKay replied (straight-faced I’m assuming): “If it means saving lives, yes.”

MacKay makes it seem like 9/11 all over again. Canada needs a Patriot Act! But what lives is he talking about?

Most likely, we’re rehashing the cases of Amanda Todd and Rehteah Parsons, those victims of “revenge porn” who committed suicide after naked photos of them were posted online, and are now the postmortem figureheads of the decline of Internet freedom in Canada.

It’s all moot anyway. During the same debate, MacKay let it slip (what would Freud think?) what C-13 is really all about, saying: “What we are doing in essence is empowering police to investigate and police the Internet.”

Of course, this revelation opens him up to criticism and rebuke, to which MacKay quickly refers to the “judicial oversight” written into the bill. What does this mean? MacKay is presumably referring to the vague wording in the bill that requires police get a warrant from a judge before embarking on an online investigation. However, all that is required to obtain said warrant is “reasonable grounds for suspicion.” It’s almost meaningless and so obtuse and nonspecific that nearly anything could fall under the umbrella of “reasonable grounds for suspicion.”

Steve Anderson, Executive Director of—who led the campaign to defeat C-30—said, “Justice Minister Peter MacKay is trying to cover the government’s online spying tracks by pushing a bill through Parliament that will actually provide immunity to telecom companies who have shared your sensitive private data without a warrant.”

What does that mean to you? Anderson goes on:

“… if you are the victim of cyber criminals, identity theft, or even wrongly targeted by police because your Internet or cell phone provider handed over your information without cause you will have little recourse. In fact, you probably won’t even be notified if you private data has been breached. This irresponsible legislation clearly shouldn’t go forward.”

An admirable, rational reason to rallying against C-13 indeed. I, however, would like to offer a bit more of a nationalistic, emotional response: Let’s let Internet freedom, online privacy and net neutrality be yet another one of those things in which we Canadians proudly separate ourselves from our neighbors to the South. While they muzzle the voices of their citizens, restrict the economic, artistic and technological benefits of the Internet, Canada must take a different, better path, the sunny, well-lit path of freedom and liberty and prudence. What do you say?

Pierco Management Offers Some Interesting Information On The Subject Of Gold

As a technical foundation, here's what the average person should know about gold - the element: gold is a chemical element with the symbol Au (which come from the Latin: aurum “gold”). It has been a highly sought-after precious metal for coinage, jewelry, and other arts since the beginning of recorded history. As a native metal it occurs as nuggets or grains in rocks, in veins or vein structures and in alluvial deposits. Much less commonly, it occurs in minerals as gold compounds, usually with tellurium. As metals go, gold is very dense, soft, shiny and the most malleable and ductile pure metal known to man. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water.

Most obvious to most of us, gold is one of the metals and has served as a symbol of wealth and a store of value throughout history. It also has been linked to a variety of symbolisms and ideologies.

The calendar year 2008 was an easy year to remember, as it marked a major economic shift everyone across the globe. In September of that year the global markets were on a path to what many analysts believed to be the brink of a meltdown. Not so coincidentally, before the September crash, the price of gold was on the rise achieving a nominal high of US$1,004.38.

Gold has long been a valuable commodity. It has been used throughout history as money by the Europeans in the later part of the 19th century, and also by the United States until 1971. As the U.S. system has now transitioned away from being backed by gold to a fiat currency (money that has value only because of government regulation or law), gold has assumed the role of the protector. When money is printed in times of economic uncertainty, the overall value of money is devalued as it floods the system. The reason gold is so valuable in these times is that is represents tangible asset, thus making it a hedge against inflation, deflation, or currency devaluation.

What makes gold unique to other commodities is the role that speculation plays in its market value. Unlike other commodities, the annual production is very low compared to the available quantity that is stored above ground. According to the World Gold Council, of the 2,500 tonnes of gold mined over the last few years, about 2,000 tonnes goes into jewelry / dental production, and the rest goes to retail investor and exchange traded gold funds. Even with this limited production, the price of gold rose 30 percent just over 2010, an example of how changes in public sentiment affect the price much more than annual production.

For those of us who aren't seasoned economists and market analysts, we can look at the trend of gold in the market to gain an overall perspective on how people are feeling about the future in economic terms. Generally, we have seen that when gold increases in value, there is a feeling of unease. Conversely, as gold trends downward, it often coincides with a perceived return to stability in the market.

The case of Dr. Aafia Siddiqui: Punishment for a Terrorist or a Mockery of Justice?

The case of Dr. Aafia Siddiqui, a Pakistani neuroscientist and mother of three, has become a crisis point in Pakistani-American relations. Since 2003, when she mysteriously went missing, Aafia Siddiqui still remains a wrongfully convicted person and a scapegoat for America’s “War on Terror.”

The “facts” that led to Siddiqui’s sentence

Siddiqui was a passionate Muslim activist while in the United States. In 2002, the FBI questioned her for potential ties to Al-Qaeda, and in 2003 while in Pakistan, Siddiqui was accused of being an Al-Qaeda financier. Immediately, she was placed on the FBI’s “wanted for questioning” list and went mysteriously missing.

In 2004, Siddiqui was implicated by the UN’s 9/11 Commission, along with five members of Al-Qaeda, for her involvement in a $19,000 diamond purchase in Liberia. The purchase was made to fund the Al-Qaeda 9/11 attacks. Although in 2007, Alan White, former chief investigator for the UN Committee in Liberia confirmed that Siddiqui was in Africa back in 2004 and was involved in the illegal purchase, Siddiqui proved that she was in Boston at the time. She only remained suspect of money laundering.

In 2008, Siddiqui and her 11-year-old son were both arrested in Ghazni, Afghanistan for possessing plans regarding a “mass casualty attack” on US targets, including the Statue of Liberty, as well as bottles containing “chemical substances and liquid gel.” When the FBI came to the scene for interrogation, Siddiqui allegedly tried to shoot a US soldier. As she missed, a second US soldier shot her in the abdomen and left her unconscious. Although this was a fabricated lie by the US Government, given that no fingerprints were found on the rifle she allegedly used to shoot the US soldier, Siddiqui was tried by the New York Federal District Court on charges of attempted murder and assault. In 2010, after 18 months in detention, she was sentenced to 86 years in prison.

The Bagram secret detention, and the Guantanamo abuse

Aafia Siddiqui and her three children—seven, five, and six months old at the time—mysteriously disappeared in 2003 from Pakistan. Her mother, Asmat Siddiqui, said that Aafia and her children left their home in Karachi on March 28, 2003 to go to the airport, but they never got there. In 2010, her eldest son testified that as soon as they left their house, twenty people in four vehicles, including a woman from the Pakistani Intelligence (ISI) were waiting for them on the next street where the family was then abducted. Siddiqui was placed in a car alone, where she was hooded and drugged.

The Pakistani authorities believe that Siddiqui spent five years at the US detention center in Bagram, Afghanistan, where she was horribly abused. This well-educated neuroscientist with degrees from MIT and a PhD from Brandeis became the “Grey Lady of Bagram” (Prisoner 650), a ghost of herself, who kept fellow detainees awake with hallucinations about her missing children and her haunting screams. British journalist Yvonne Ridley reports “the cries of (this) helpless woman echoed (with such torment) in the jail that (it) prompted prisoners to go on hunger strike.” Her mysterious reappearance in 2008, the shooting incident in Ghazni, the arrest, the trial and the conviction resemble an attempt to hide her kidnapping in Karachi and her subsequent detention in the US prison in Bagram.

Then, Siddiqui was transferred to the Guantanamo Bay Detention Center, where she has been abused. In Guantanamo, she has been brutally raped by male detainees as she was kept in their wing. She was naked, without clothes and without curtains in the washrooms so that male guards could watch her. In order to get her clothes, she was forced to step on the Quran, the holy book of Islam.

Siddiqui’s Muslim activism and the US “War on Terror”

While at MIT, Aafia Siddiqui organized deliveries of the Quran and other Islamic books to Muslims in local prisons. Seen as a religious person by her fellow students, Siddiqui never expressed any extremist behavior. However, in one of her books she writes “May Allah give the strength and sincerity to us so that our humble effort continues and expands until America becomes a Muslim land.” Moreover, Siddiqui preached to Muslim children, protested for Afghanistan, Bosnia and Chechnya, participated in fundraising for Bosnian women and delivered powerful speeches at her local mosque. Her apparent purpose was to assist Muslims around the globe and spread the message of Islam.

Given Siddiqui’s faith and passionate activism, it comes as no surprise that the US government not only targeted her, but sentenced her to 86 years in jail. Christopher LaVigne, Assistant US Attorney, called her “a high security risk.” According to the US government, Aafia Siddiqui is “one of the most wanted Al-Qaeda fugitives.” In 2004, John Ashcroft, the US attorney general, described Siddiqui as “an armed and dangerous terrorist facilitator, who used her education against the United States.”

Interestingly, at almost the same time that Siddiqui and her three children disappeared, two other alleged Al Qaeda suspects went missing from Karachi. Majid Khan and Ali Abd-al-Aziz were most likely arrested by the ISI and handed over to US authorities in the name of the “War on Terror.” Both reappeared in 2006 when they were reported to have suffered tremendous tortures in the Guantanamo Bay Detention Center.

Violation of human rights

Aafia Siddiqui is one of the many victims of the brutal treatment and torture handed down to prisoners at the Guantanamo Bay prison.

The Prisoners Rights Law allows prisoners the following rights:

The right to practice religion freely and speak their opinion freely provided these rights do not interfere with their inmate status (First Amendment).
The right to equal protection (Fourteenth Amendment).
The right to be free from inhumane treatment (Eight Amendment).
The right to medical treatment and adequate mental health treatment.
The right to be free from sexual harassment or sex crimes.
The right to voice complaint about the prison conditions to the courts.
The right to be free from discrimination on the basis of race, ethnicity or religion.

In the case of Aafia Siddiqui, the United States did not comply with any of the above rights. Additionally, with respect to the Universal Declaration of Human Rights, the United States violated:

The right to life, liberty and security of person (Article 3).
The right to not to be subjected to torture or to cruel, inhumane or degrading treatment or punishment (Article 5).
The right to recognition everywhere as a person before the law (Article 6), and
The right to be presumed innocent until proved guilty according to law in a public trial at which the person has had all the guarantees necessary for defense (article 11).

Even more disturbing is the fact that Aafia Siddiqui’s trial was observed by Amnesty International, who noticed nothing in violation of the human rights. However, four British MPs noted that the trial was “a grave miscarriage of justice that violated the Sixth Amendment to the United States Constitution as well as the United States’ obligations as a member of the United Nations” and requested Siddiqui’s release due to the lack of forensic evidence tying Aafia to the rifle she allegedly fired. Additionally, a few human rights organizations claimed that Siddiqui and her three children were illegally interrogated, detained and tortured by the ISI and the CIA, claims which were denied by both the ISI and the US Government.

The Israeli Advisor and the US “War on Terror”

Dr. Aafia Siddiqui was randomly selected by the CIA based on Irving Lowenstein’s recommendation. Also known as “Libby,” Lowenstein was President Bush’s National Security Advisor of Israeli nationality. Working closely with Vice-President Cheney, Libby was instructed to select “warm bodies” for abduction, torture and sentence to prison so that President Bush’s set-up of “yellowcake” uranium being illegally imported to Iran was promoted as planned.

Gordon Duff, a Marine Vietnam veteran, who interviewed several Pakistani leaders, as well as the White House and Pentagon intelligence officials, writes “All agreed on one thing: the case against Dr. Aafia was fabricated by the Bush regime and CIA and her prosecution was orchestrated by Israeli intelligence. The Musharraf regime in Pakistan assisted every step of the way.”

The role of the Pakistani government

In an attempt to pacify irritated public opinion, the Pakistani government has voiced discontent at Dr. Aafia Siddiqui’s sentence and stated that it would offer legal assistance to secure her release and repatriation to Pakistan.

“President Zardari directed the government to immediately establish contact with the family of Dr. Aafia Siddiqui and provide her with possible legal assistance in the US. The President is concerned about the verdict and expressed the hope that justice will ultimately be done as the case passes through subsequent stages in the US judicial system.”

However, Aafia’s mother said to Agence France Presse “What has happened clearly shows the lack of seriousness on the part of our government in getting her released.” On the same page, Aafia’s sister, Dr. Fauzia Siddiqui said in a press conference: “Everybody knows that Aafia was kidnapped by the Pakistani intelligence agencies at the orders of General Pervez Musharraf, who later handed her over to the US authorities, who transferred her to Bangram, where she was detained and tortured for many months.” Fauzia insists that if the Pakistani government were to assist in Aafia’s repatriation, it would cut off all supplies to the US and other NATO troops in Afghanistan.

Bottom Line

Today, Aafia is being held at the Federal Medical Centre in Texas, in a women’s prison. Her case is the case of a wrongfully convicted woman for an alleged attempted shooting of a US service member, which is as of yet unproven as no forensic evidence ever tied Aafia Siddiqui to the gun she allegedly used to shoot the FBI interrogators. So, at the end of the day, her conviction is based on fabricated charges of attempted murder in order for the US military intelligence to hide their crimes, crimes far more serious than those for which Aafia Siddiquihas been wrongfully convicted.

Tuesday, 13 May 2014

The Russian Economy Part 2 : Loans-for-Shares and the Creation of the Russian Oilgarchy

The Russian economy of the late 1980's and early 1990's was in the beginning of a freefall that would take nearly three decades to recover from.  The lack of innovation, demoralized workforce and poor levels of foreign investment left them well behind the West.  The U.S.S.R. was breaking up and many of the newly freed countries sought alliances with the West and the adoption of its economic philosophies.

Meanwhile, back at the ranch Moscow had large bills and little ability to right the ship under the existing system.  In a way they were back in 1917, trying to figure out a way to quickly jump start a moribund economy and a dejected citizenry.

The Russian Economy

Mikhail Gorbachev was gone, replaced by Boris Yeltsin, who somehow had to pilot Russia towards democracy.  In 1994, he was approached by officials at oneksim Bank, the only Russian financial institution to be accredited by the Swiss Central Bank.  Russia needed cash and wanted to transition most state-owned business to private hands.  Oneksim led a consortium of banks that would lend Moscow money in exchange for “temporary” shares in those companies.  Pay off the loans and no harm no foul, but failure to pay them meant the banks got to keep their shares.  This became known as “loans -for-shares” (LFS).

LFS was rigged from the start.  There was no way the Russian government could pay back these loans and the banks knew it, so when the loans came due and the money was not there, a few lucky Russians became owners of the dominant entities in many sectors of the Russian economy.  The LFS banks involved in the program were well-connected to the Kremlin and had the clout to help a shaky government survive the looming presidential elections.

The LFS banks organized “auctions” for the prime pieces of the Russian economy and the results were laughable.  The very banks which organized the auctions won many of them, paying just over the opening bid in some cases.  Foreign investors were shut out of the bidding for the prime assets and the organizers would identify the smallest of infractions to disqualify competing bids.  In one case Oneksim Bank, the brainchild behind the entire LFS program, refused to accept a bid from a rival bank because the paperwork was supposedly late and for the reason that part of the rival bid was secured by treasury bills. Oneksim walked away with 38 percent of Norilsk Nickel for half of their rival’s disqualified bid, one that exceeded the minimum asking price by only $100,000.  This one sale cost the Kremlin $171 million.

Other bargains included oil giants Lukos and Lukoil, two others names that will come up again soon enough.  When the tab was paid, Moscow received barely half of the $2 billion they expected at the outset of the auctions.

The president of Oneksim at the time was one of the big beneficiaries of the auctions. Vladimir Potanin would soon become a billionaire, and as of last spring was the seventh richest Russian with a net worth of $14.3 billion.  He had a head start over many of the others on the list, as he was born into the communist hierarchy.  After graduating from university he got hired by the Russian Ministry of Foreign Trade.  Together with some comrades from the ministry, he started a trading company that succeeded because of the support of many different sectors of the Communist Party as well as the Foreign Ministry.

In the wake of the success of the trading company, Mr. Potanin started two banks, Oneksim and MFK.  They immediately benefited from deposits from many of the state industries.  At the same time he teamed up with Mikhail Prokhorov to create Interros, one of the largest Russian private investment firms.

The aftermath of LFS saw Potanin and Prokhorov with control of Norilsk and oil company Sidanco.  The last five years has seen him shed some assets, including a portion of Norilsk, Polyus Gold, and ProfMedia, Russia’s biggest private media holding company, to Gazprom.  Mr. Potanin was tapped by Vladimir Putin to build Rosa Khutor, the Russian ski resort which hosted skiing and snowboarding at the Sochi Games.  The tab was $2.6 billion.

Now we all know how Sochi was a breeding ground for corruption, and how it nearly perfectly illustrates how corruption results in disaster. Obviously, the Russian oligarchs got their money, reporters got plenty of good stories, Russia looked a little silly and Putin took the opportunity to invade Ukraine while all eyes were already on him. Does that mean everybody’s a winner? It’s hard to say, but it was a strange time indeed. It gets weirder the deeper down the rabbit hole you go. Check out the next installment for a near-comprehensive list of Russia’s lesser known oligarchs and their arguably undue influence in this powerful country. It will be a good time, guaranteed.

The High Cost of Cheap Labor: Workers’ Rights Abuses Plaguing the Electronics Industry in China

In the past decades, China has risen as a giant of manufacturing as more and more foreign businesses moved their factories in favor of more relaxed labor laws. As a result, many ethical issues have come to light as an increasing number of reports highlighting the deplorable working conditions in the factories of China.

Attention has been especially drawn in the past couple of years to the labor rights violations of electronics and technology companies who have committed some especially egregious abuses such as dangerous working conditions, inadequate pay, and multiple hours of uncompensated overtime. The primary culprits: Apple, Samsung, IBM, Dell, and other household names.

The High Cost of Cheap Labor

Approaching the Boiling Point

In the early months of 2014 alone, the number of protests and strikes has risen by 31% when compared to the previous year. This amounts to approximately 202 incidents of protest or strike in the past four months. The strikes are almost exclusively concentrated in the southeast region of the country with the industrial city of Guangdong alone accounting for a full 55%  of the incidents occurring this year.

While each company is dealing with the growing number of strikes and protests in its own way, it is becoming increasingly apparent that the Chinese populace is no longer willing to be exploited as a source of cheap labor. These companies will have to start addressing worker grievances in a meaningful way or risk scandal and loss of business.

Apple and the Most Recent Claims against this Repeat Offender

Apple has come under scrutiny a few times in the past as factory working conditions and employee contracts continue to be reported as unhealthy or inhumane. In the most recent case, undercover investigations by a New York based NGO advocacy group for Chinese workers known as China Labor Watch resulted in allegations of at least $8.3 million in unpaid working hours per year among other violations.

These unpaid hours consist primarily of overtime work which is not paid at the legal overtime rate. The report also uncovered regular incidences of fraud regarding the under reporting of employee’s working hours. Furthermore, overtime hours are made mandatory and often exceed 100 hours of overtime per month—a number which exceeds both Apple’s own regulations as well as China’s national labor policies.

While Apple spends a fairly hefty amount on the actual parts necessary to build the iPhone (at least $191 per unit), it pays just $8 per phone for labor bringing the total production cost to just under $200. If the company were to hypothetically move manufacturing to the United States—where they would be under more pressure to pay fair wages and provide fair working conditions—they would only have to spend an additional $4 per phone for labor.

Of course, a major deterrent to manufacturing in the United States is the corporate income tax which would amount to substantially more (approximately $3.6 billion per year) than the increased labor costs. But with these figures in mind, it becomes clear that Apple could easily afford to offer its Chinese workers fair wages and better working conditions without substantially affecting its profit margins. A cost increase from $200 to $204 on a product which retails for well over $500 is not that dramatic. Furthermore, Apple’s customer base would likely be more than willing to absorb the additional $4 per unit for the assurance that the device they are using was not manufactured in inhumane conditions should Apple be wholly unwilling to see its profit margins changed.

The Human Cost of Producing Consumer Electronics

As Apple is the most publicized case of human and labor rights abuses in China, it’s profit-driven,exploitative practices are the most thoroughly analyzed. With manufacturing costs representing just 2% of the total production cost of an iPhone and profit margins at 51% per device, it is easy to imagine a scenario where Apple doubles the wages of its factory employees without suffering any substantial loss to profit.

Similarly, for Samsung, manufacturing costs (which includes labor costs as well as electricity and other essentials to processing) amount to 3% of the total cost to produce the phone. After production costs are accounted for, Samsung pulls in about $394 in profit per phone which translates to a profit margin of more than 60%. Doubling wages for its factory workers, then, would do almost nothing to its ability to compete in the marketplace.

A breakdown of profits and labor costs is more difficult to find for companies like IBM and Dell which rarely come into the spotlight for their labor rights violations and, therefore, are less susceptible to close analysis of their finances.

While the companies respective responses to the allegations of labor violations vary (with some being far more proactive and concerned than others), it is clear that the electronic industry as a whole should be held to stricter standards by the Chinese government as well as by the private sector itself.

The recent surge in strikes and protests among Chinese factory workers will hopefully result in meaningful policy changes within each company as well as at the national level.