Insider dealing 2.0

Bloomberg reports that a Goldman Sachs employee was arrested for the alleged theft of trading code. The suspect is a dual Russian-US national and was arrested after transferring the code to a machine in Germany.

While we do not yet have the details of this particular incident, it is the type of theft that would require significant resources to exploit. Without the necessary capital to front-run the Goldman-Sachs trades, the trading software is not worth too much.

Traditional businesses strategy is to use capital from a cash cow to develop new forms of enterprise. MBAs are told to 'work up the value chain' to find larger rewards. It has always been a matter of when and not if the Russian cyber-mob would decide to take the profits they have made from cheating bank customers and go after the banks themselves.

In this case the suspect is a dual national, most likely he has family living in Russia. It might well turn out that blackmail was involved. This has occurred in corporate espionage cases. If an employee has a relative living in a police state, they can be pressured in subtle ways. A parent gets sick but the normal hospital treatment is unavailable, unavailable that is 'unless' the child can perform a 'patriotic service' for the state.

Understanding the risk is one thing, working out how to apply effective controls is quite another. Attempts to compartmentalize information are expensive to design and maintain. Trying to compartmentalized code is more challenging still.

Matthew Yglesias

Matthew Yglesias makes a good point about Posner's proposed link ban. People want their sites to be linked.

Actually there are people who do not want to be linked, but they can do so pretty easily using technical means, no need to change copyright law. In fact the New York Times used to use links that automatically broke after a few weeks.

But even if they did not, who would if linking to the New York Times was prohibited? Adding links takes effort. I am happy to do so as a courtesy to the authors I reference, but that is really all it is. I am quite happy leaving the links out or linking to another news source.

Traditional news is now a commodity. I can link to hundreds of news articles on the coup in Honduras. The only newspaper content that is not commodified by the Web is opinion - which is the one type of content that the Web model supports effectively.

We need to work out a way for funding primary news gathering, but changing the copyright laws to affect linking is not it.

George W. Bush appointees buck Barack Obama on terror policies - Josh Gerstein - POLITICO.com

Gee who would have thought that Bush appointees would turn out to be political hacks?

Krugman on Global Warming

Krugman makes a good point, the whole country came together in the fight against terrorism, why not for global warming?

The cost of reducing carbon consumption is trivial to the cost of a single war. Yet for some reason the militarists never seem to have the slightest hesitation about spending a trillion dollars or so on a war.

Since supplies of carbon fuels are finite it is a question of when, not if, we change consumption patterns. And carbon addiction was and is the root cause of all the issues in the Middle East.

Tweets on Sanford

Now we know what Twitter is good for - piling on to the latest public embarrassment Twitter / Search - Argentina

Me: The simplest explanation for Sanford's behavior is that someone zapped him with some kind of mind control ray.

@Jonny5172 Gov Sanford told staff he would be "spiking some Argentina tail" & they HEARD "hiking the Appalachian Trail." Honest mistake

@kboreilly Now we know why Mark Sanford rejected that stimulus money: He already had more stimulation than he could handle.

Somebody on Facebook: "where in the world is gov sanford?" "apparently w/ carmen sandiego!"

Stewart On Sanford: Just Another Politician With A Conservative Mind And A Liberal Penis

The Revolution might not be tweeted

The London Times has an excellent rundown on events in Iran.

Westerners, in particular Twitterers, need to take a deep breath. This is not about us, its all about the Iranian people and the type of government they decide to accept or reject.

In particular, the Times notes that far from being the central organizing force of the protests, almost no Iranians appear to have heard of Twitter. None of the 20 people they surveyed at an opposition rally had heard of Twitter. The revolution may not be tweeted after all, or if it is, the tweets may be playing a supporting rather than a leading role.

While the role of Twitter may be exaggerated, many of those attending the rallies had seen the death of Neda Agha-Soltan on television. Since we can be sure that this was not on Iranian state TV, it is clear that attempts to ban satellite TV have failed.

With this information, we can sketch out the likely path that news takes from the street via camera-phone, to the outside world via the Internet and back to Iran via the satellite TV stations. The flow of information out of Iran is being driven by email and the Web, not in 140 character tweets.

But even if Twitter is not the conduit through which information flows out of Iran, it may play an important role in establishing and connecting the support infrastructure for this process. Almost anyone who receives information from inside the regime, knows that they can bring it to wider attention through 'Twitter'. And even if the recipient of that information has no idea what Twitter is or how to use it, they can quickly find someone who can. And once out on the Twitter flux, any information that has news value will be re-tweeted repeatedly until it comes to the notice of the mainstream news.

Every revolution has an external support infrastructure, usually these are pretty small and limited to exiles and second generation ex-patriots. Twitter has enabled the Iranian opposition to build a support infrastructure of hundreds of thousands, if not millions in less than a week.

Ten days ago, the Iranian theocracy appeared to be set to last for decades, today most observers think is a question of when, not if the regime falls. The injustice, and hence the illegitimacy of the regime have already been established, through the election fraud and the martyrdom of Neda Agha-Soltan. All the regime has left is fear.

A regime that rules through fear is weakened by every scrap of information that demonstrates it has lost control. The inability of the authorities to control Twitter is one such demonstration.

Why I don't watch MSNBC

I turned on the TV for the latest news from Iran this morning. CNN was doing its usual ad-laden drivel so I thought, why not try MSNBC?

Joe Scarborough, that's why.

Scarborough was originally hired when MSNBC was attempting to compete with Fox News, providing a non-stop GOP tabloid. Hiring an extreme-right former GOP Congressman fit right in with that bizarre plan.

After discovering for themselves that GE could not possibly outdo Rupert Murdoch in right wing tabloid TV, the channel has lurched to the left. This is at least a rational strategy. With Murdoch occupying the right wing tabloid space and CNN attempting to occupy the 'objective' space, the only place that is not being contested is the tabloid left space.

Hiring smart progressives like Rachel Maddow and Keith Olberman for prime time has turned MSNBC's fortunes round. But they still have a big problem, viewers still autopilot to CNN when they want news. Conservatives can flip to Fox and see programming that isn't going to challenge their prejudices with unfortunate facts. But Liberals can only find agreeable programing at MSNBC half the time. If they flip in the morning they will hear Joe Scarborough airing his rather simplistic and uninformed opinions.

Iran 'telephone poll' bogus

Every so often a smart alec pops up on CNN touting his 'telephone poll' of the Iranian electorate which indicated that Ahmedinejad was in the lead running up to the poll.

Tehran Bureau takes the telephone poll apart. They point out that the last poll was taken over a week before the election and that over half the people called refused to give a response.

Given the absurd and undemocratic conditions in which the election was held, only a simpleton or a government shill would claim that people called at random would give their honest opinion to an unknown stranger. While 'undecideds' typically break fairly predictably in US elections, the people called up by Gallup and co do not face retribution by Baiji thugs if they give the 'wrong' answer.

The 'results' of the 'survey' were that 34% of respondents said they would vote for Ahmedinejad, 14% for Mousavi and 27% refusing to answer. The survey was taken May 11th through 20th, immediately after the four candidates to be allowed to contest the election were announced and before Ahmedinejad was exposed as a clown in a series of television debates.

The US election takes place over a period of 18 months, the candidates are well known to the electorate at least a year in advance. Late shifts in opinion are rare. The Iranian election takes place in a three week period, outside of which the opposition candidates are non-persons as far as state media are concerned. Presenting the results of this survey as anything other than a description of the state of play at the start of the campaign is deceptive and dishonest.

While the 'survey' predicts an Ahmedinejad win, it certainly does not predict a blow-out 66-30 win. No observer of Ahmedinejad's performance in the debates was of the opinion that he had increased his standing, quite the opposite.

Given the fact that every telephone call into and out of Iran is monitored, respondents had reason to believe that they would face reprisals for giving the 'wrong' answer. But in fact this was probably a misplaced fear as once the authorities became aware that a poll was being taken they would quickly redirect calls so that they would be answered by trusted government supporters.

Clear proof the Iranian election was rigged

This sequence of TV screen captures shows the election returns as reported on Iranian TV

Over the course of the night Rezaee went from having 633,048 votes at 9:47 to 587,913 at 13:53. A loss of 45,135 votes in the space of four hours.

Does Iran already have nuclear weapons?

If Iran had already built a nuclear weapon, would it admit the fact?

Britain and France both managed to build a bomb with economies and manufacturing infrastructure shattered by World War II. Iran has seventy million people, a vastly larger economy and access to the past fifty years of technology. If the political leadership had given the order to build a bomb in response to the Bush 'Axis of Evil' speech in 2002, they could easily have completed it by now.

Having a bomb is one thing, admitting that you have it, quite another. India and Pakistan were both believed to have built bombs in the mid to late 1980s. Pakistan acquired enough fissile material to build a bomb in 1987 but did not perform tests until 1998. Immediately afterward, India performed its own nuclear tests and the India-Pakistan conflict became a nuclear standoff.

Iran would undoubtedly face serious consequences if it was to conduct a nuclear test of its own in violation of an international treaty. Israel would become a declared nuclear power, Saudi Arabia and possibly Turkey would start their own nuclear programs. Neither China nor Russia could be guaranteed to block US attempts to impose sanctions.

So if Iran did have a nuclear weapon it almost certainly would not announce the fact. Which is a problem for an aspiring demagogue with regional superpower aspirations such as President Ahmedinejad since not revealing the existence of a nuclear weapon means the entire point of having it is lost.

An equally plausible scenario is that Iran has begun but not completed its nuclear project. For decades India and Pakistan were described as being 'a screw turn away' from having a bomb. The Ayatollah Kohmeini, is reported to have halted Iran's first nuclear program (a joint project with Israel), describing nuclear weapons as the weapons of the devil. According to a 2007 US intelligence estimate, Iran halted an active weapons program in 2003 and has not restarted it since.

The two most likely situations are that Iran has already built an undeclared bomb, or that the nuclear program was suspended just short of having completed a bomb. In either case, the optimum stratagem for Ahemedinejad to employ to become a declared nuclear power is to provoke an attack by Israel or the US and use it as a pretext for withdrawal from the non-proliferation and test ban treaties.

As has been pointed out on numerous occasions, bombing is not going to stop or even slow any Iranian weapons program. Iran is a vast country and neither the US nor Israel has much of an idea of the location of any nuclear facilities. And even if the locations of the sites were known, an attack would hardly come as a surprise. Any Iranian nuclear facilities will be built deep, deep underground. This has not been lost on the Israeli and US nationalist-militarist factions who have been discussing the possible use of nuclear weapons in a pre-emptive strike to prevent another country obtaining nuclear weapons.

The Israeli attack on the Iraqi Osirak reactor in 1981 was almost certainly a phyric victory. According to Iraqi scientists interviewed on CNN crossfire, the Iraqi nuclear weapons program expanded from 400 people and a budget of $400 million to 7000 people and a budget of $10 billion. Who would have imagined any other result?

Ahmedinejad and the neo-cons baying for a 'pre-emptive' attack on Iran are all militarists. They believe in the violence as a first resort, they have a tendency to overestimate their own strength and to dismiss their opponents as cowards. The only difference is that the Iranian militarists appear to be quite smart: in the aftermath of 9/11 they have finessed a fairly weak military position to emerge as the regional superpower. The US neo-cons and their Israeli allies have achieved the exact opposite: they have reduced the US from unchallenged supremacy as the one remaining superpower to parity with Russia and China.