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NSA Reform Stalls As Bill Introduced To Extend Patriot Act Until 2020

Hopes for meaningful reform to America’s illegal and democracy perverting spy apparatus suffered a major blow Wednesday as Senate Majority Leader Mitch McConnell introduced a bill Tuesday night that would reauthorize the controversial surveillance authority of the Patriot Act until 2020, a push that comes just as a group of bipartisan lawmakers is prepping a last-minute push to rein in the government’s mass-spying powers.

The Kentucky Republican led an effort to vote down an NSA-reform package during the lame-duck Senate last year, whipping most of his caucus against the Democratic-backed measure on grounds it could help terrorists kill Americans.

A McConnell aide said the big government enthusiast is beginning a process to put the bill on the Senate calendar but said that the chamber will not take the measure up this week.

The bill would see Section 215 of the post-9/11 Patriot Act extended until December 31, 2020. The core provision, which the National Security Agency uses to circumvent the law in regards to its bulk collection of nearly every piece of data on nearly every U.S. citizen, is currently due to expire on June 1.

The bill is an attempt to thwart efforts to rein in the National Security Agency’s expansive and increasingly scary surveillance powers, which came under intense scrutiny nearly two years ago after the disclosures made by former NSA contractor Edward Snowden.

A bipartisan group of lawmakers were expected to reintroduce on Wednesday a comprehensive surveillance-reform bill that would have effectively ended the NSA’s dragnet of Americans’ call data. It is unknown if the bill would address the collection of email, instant message, credit card and the numerous other forms of data the agency collects.

Privacy advocates immediately assailed McConnell’s bill.

“The Senate majority leader’s bill makes no attempt to protect Americans’ privacy or reform ongoing NSA surveillance programs that do not provide any tangible benefit to national security,” said Harley Geiger, policy counsel at the Center for Democracy & Technology. “For Americans concerned about government intrusion in their lives, the bill is a kick in the stomach.”

U.S. Has Complete Replica Of Iran’s Nuclear Lab

News leaked today that to better understand and answer questions about Iran’s nuclear activities scientists have turned to a secret replica of Iran’s nuclear facilities built deep in the forests of Tennessee to get answers.

Inside a shiny plant at the Oak Ridge nuclear reservation are giant centrifuges — some surrendered more than a decade ago by Libya, others built since — that help the scientists come up with what they tell President Obama is the “best reasonable” estimates of Iran’s real-life ability to race for a weapon under various scenarios.

“We know a lot more about Iranian centrifuges than we would otherwise,” said a senior nuclear specialist familiar with the forested site and its covert operations.

The top secret replica is just one part of an extensive crash program within the nation’s nine atomic laboratories to block Iran’s nuclear progress. It may have even served as a testbed for the cyber attack on Iran’s program early last year.

As the next round of Iran nuclear talks begins on Wednesday in Vienna, the secretive effort remains a technological obsession for thousands of lab employees who are essentially living the Manhattan Project but in reverse. Rather than building a bomb, like they did in World War 2, they are trying to stop one.

Ernest J. Moniz, the nuclear scientist and secretary of energy, who oversees the atomic labs, said in an interview that as the U.S. administration sought technical solutions at the talks, diplomats would not have been able to offer any “if they didn’t have this capability nurtured over many decades.”

The new mission has changed the labs. In the bomb making days, the scientists largely kept to their well-guarded posts. But anyone travelling to the Iran talks over the past year and a half in Vienna and Lausanne, Switzerland, saw the scientists working hard as the negotiations proceeded, and heading out to dinner after hours of talks.

One of those dinners in Vienna last summer produced a face-saving way for Iran to convert its deep-underground enrichment plant at Fordo, a covert site exposed by the United States 5 years ago, into a research center. The creative solution would enable Iran to say the site was still open, and the United States could be certain it was no longer a threat.

“The question was what kind of experiment you can do deep underground,” recalled a participant at the dinner. By the time coffee was served, an idea had developed, and it subsequently became a central part of the understanding with Iran that the U.S. announced this month. Under the preliminary agreement, Fordo would become a research center, but not for any element that could be used in nuclear weapons.

While some did travel with the delegation most of the work was done back at the labs, where specialists who had become accustomed to more 9-to-5 days found themselves on call seven days a week, around the clock, answering questions from diplomats and backing up the answers with calculations and computer modeling.

Kevin Veal, A senior official of the National Nuclear Security Administration, has been along for every negotiating session and would send questions back to the laboratories, hoping to separate good ideas from bad. “It’s what our people love to do,” said Thom Mason, the director of Oak Ridge National Laboratory. “It can be very rewarding.”

U.S. Generals Find No Equivalent Of Nukes In Cyber Space

As the world’s militaries increasingly move online America’s top generals are looking for creative ways to maintain their superior military advantage. There’s no functional equivalent of nuclear weapons in cyber space and this means coordinated efforts to stop online armies rather than high powered weapons systems.

“The US government must hone its offensive capabilities to electronically attack those who menace America’s interests” said the White House’s Cybersecurity Coordinator Michael Daniel, quickly adding global ground rules for cyber-war have to be worked out first. This is particularly tricky given it is often difficult to attribute an attacker to a specific nation or political faction.

President Obama signed an executive order On April 1st that looks likely to be part of the strategy going forward – no one size fits all solution, rather a host of penalties and response options for dealing with emerging cyber threats.

The President’s bill allows Uncle Sam to impose economic sanctions against people, or nation states, that threaten America using cyber attacks. Daniel, who is the special assistant to the President on cybersecurity matters, told the RSA conference in San Francisco that the US also needs ways to terminate enemies online.

“We need to have a larger toolset to go after what the bad guys are doing,” he said.

“The bar for that is set deliberately high. You’ve got to be posing a significant risk to the national security, the foreign policy, and the economic health of the US, and the disruptions you are causing have to reach a significant level. This is not a tool that’s going to be used on a daily basis for ordinary criminals, but to allow us to go after the worst of the worst.”

Ultimately though there is only so much the government can do on by itself. Daniel highlighted ways in which industries share information and resources to improve their products.

He then cited Underwriters Laboratories, an electrical goods safety testing center set up by the insurance industry to test household products, eyeing such an approach for testing equipment and software that is vital to national security industries using a private sector model. Prevention has always been the best way of dealing with cyber security issues and this trend will continue. The Pentagon recognizes that not only is preventative security effective but its also relatively cheap.

Part of that will require information sharing between government and industry, and Daniel said that Congress is progressing well on laws to help facilitate this.

Controversially Daniel mentioned the CISPA and CISA legislation that will come to a ‘vote’ this week, despite the fact the bills were authored by lobby groups with the intent to sue consumers who infringe intellectual property rights.

While the bills will nominally get a vote this week Daniel said the word in the White House is that both will pass without a problem.

“Our primary tools are not going to be military and intelligence tools for cyber-offense,” he said. “That’s because we are not the only ones that have that capability and we won’t be able to maintain an asymmetric advantage, and have to be prepared for other countries to do the same thing.”

EC On A Roll, Smacks Booking.com Over Competition Concerns

The EU Competition Commission is on a roll this month, announcing today the smackdown of another large company for anti-competitive behavior after fresh indictments of Gazprom and Google.

The latest company in its cross-hairs is Booking.com, the euro-centric online hotel reservation site. The latest actions look considerably more tame than its likely decade long tussle with Google as Booking.com has promised three European countries it will stop blocking other hotel and holiday deal sites, following the EU investigation.

Competition regulators in Sweden, Italy and France have accepted assurances offered by the site that it will no longer force hotels to give it lower prices than everyone else. This had previously been a condition of working with booking.com

Following complaints from the three countries, the European Commission started an investigation last December into Booking.com’s business practices.

“We welcome and encourage fair competition in the marketplace because competition drives innovation [and] greater value for consumers,” said Darren Huston, CEO of Booking.com, adding “we believe today’s decisions represent a continued, coordinated effort to promote competition in a way that supports innovation.”

Looks like everyone in the process has checked in, unlike the boys from Mountain View who will be engaged in a Microsoft-like struggle for years or decades to come.

The biggest problem found by the EC was with Booking.com’s parity clauses, which prevented hotels using Booking.com to offer better deals elsewhere.

The EU Commission was concerned that “these clauses may restrict competition between Booking.com and other online travel agents and hinder new booking platforms from entering the market.”

Hotels will still have to offer the same rates and booking conditions on Booking.com as they do through their own direct website though

The promises will not be implemented until 1 July, so the booking behemoth can still gather up customers ahead of this summer’s high season.

Uber’s War With Google Heats Up Over Maps

Nokia is selling its mapping business and there are some interesting bidders in the mix. At least four potential buyers including Facebook and a consortium of German carmakers representing BMW, Audi and Daimler, are interested a German magazine reported on Wednesday.

Manager Magazin also confirmed an earlier report, possibly the most interesting, that online taxi service Uber is looking at the books of Nokia’s mapping division, named HERE. U.S. private equity firm Hellman & Friedman is also reportedly interested.

The most interesting revelation is definitely that Uber is in the mix . The red hot taxi hailing service currently uses Google Maps and counts Google as a significant investor. The notoriously aggressive company may feel that its partnership with the search giant is not working or damaging its ability to extract top dollar from the company in a buyout or merger scenario. Both companies are known to be hyper aggressive and are very well funded.

By running with Google Maps, Uber provides Google with significant amounts of data on where its taxis are coming from and going to. Such data could be useful to Google if it were to start up an Uber rival, say powered by one of its self driving cars. It could also be used as leverage in negotiations about further financing, as Google would have a very tight read on where and how fast the company is growing.

According to Manager Magazin, the book value of the unit is $2.15 billion. A more bullish brokerage estimate by Inderes Equity Research values HERE at $4.7 billion to $7.5 billion, using on a sum-of-parts methodology.

Facebook may also have ambitions to own high quality mapping data. The objective for Facebook is not nearly as clear as either Uber or the German automakers but its huge resources mean it could do such a deal and figure out its exact strategy at a later date. A high quality data asset like HERE does not come up often and the social media giant may want to take advantage of the opportunity while it can. The company’s local advertising system and increasingly mobile applications could benefit from the additional data.

Nokia, Facebook and Uber declined to comment on the report.

The Finnish company’s mapping and location business is built on the back of an $8.1 billion acquisition in 2008 of U.S-based Navteq, a maker of geographic information systems used in the automotive industry.

Nokia made the purchase to add maps to its phones, as a way to differentiate its products from other high-end phone makers including Apple.

The HERE unit, one of Nokia’s three remaining businesses after the sale of its handsets unit, has in recent years refocused to supply maps to carmakers yet given the company is going to pursue mobile phones again as early as this year its an interesting time to sell.

This may be a signal that future Nokia phones will offer tight integration with Google and its Android operating system.

Location technology allows car manufacturers to build navigation and safety features into newer “connnected cars”, helping them to navigate obstacles and other vehicles, and is considered a pre-condition for the eventual emergence of driverless vehicles. While such plans would not immediately happen for Facebook all the other bidders are known to be highly interested in self driving vehicles.

Acquisition of HERE by a tech company would have interesting industry implications are the company supplies online maps to major Internet companies including Amazon.com, Microsoft, Yahoo and Baidu.

Another Day, Another Bank Fine. BAML To Pay $20 Million

In what has clearly just become a cost of doing business, Bank of America Merrill Lynch was fined 13.2 million pounds ($20 million) by Britain’s markets regulator for failing to report transactions properly over seven years. The fine is the latest in a long line of sanctions against the too big to fail banks, who seemingly operate with wanton disregard for the law.

The Financial Conduct Authority (FCA) said on Wednesday that Bank of America’s Merrill Lynch’s International arm incorrectly reported 35 million transactions and did not report another 121,387 transactions between November 2007 and November 2014.

The reason for not reporting the transactions accurately and in a timely fashion was to facilitate insider trading, market manipulation and tax avoidance. These avenues are increasingly just lines of business for the big banks, coming on the heels of record fines against JP Morgan, Goldman, UBS, HSBC and others for similar conduct.

The record fine this time around reflected, claims the regulator, the severity of the misconduct and a failure to adequately address the root causes over several years despite substantial guidance from the regulator and a poor history of transaction reporting compliance, it added.

The bank was privately warned in 2002 and received a fine of 150,000 pounds in 2006. Clearly the bank, known for crunching numbers, determined that more money was to be made by continuing its illegal behavior despite the cost that would be incurred due to the fine.

“Proper transaction reporting really matters. Merrill Lynch International has failed to get this right again, despite a private warning, a previous fine, and extensive FCA guidance and enforcement action in this area,” said Georgina Philippou, acting head of enforcement at the FCA.

“The size of the fine sends a clear message that we expect to be heard and understood across the industry.” Or does it? The fine amount represents less than one month’s profit according to recent financial filings.

Bank of America Merrill Lynch, in what can only be described as a laughable attempt to seem like they care, said it was wholly committed to complying with all FCA requirements and stressed, despite ignoring the FCA, that it continuously sought to improve all necessary aspects of reporting.

“While regrettable, today’s decision principally refers to self identified issues which we have sought to remediate as quickly as possible. We can confirm that no clients were financially impacted as a result,” the bank said. The bank was silent on whether other market participants and the public at large were impacted, which usually tends to be the case in these matters.

The FCA said the fine equated to a mere 1.5 pounds ($2) per incorrect or non-reported data for the first time, up from a pound per line in the three most recent transaction reporting cases because those fines have not been high enough to achieve “credible deterrence”.

Good news though! Bank of America Merrill Lynch was able to obtain a 30 percent discount because it settled at an ‘early stage’.

The watchdog has, to date, fined 11 other firms for transaction reporting breaches: Deutsche Bank, Barclays, Credit Suisse, Instinet, Getco, Commerzbank, Societe Generale, City Index, James Sharp & Co, Plus500UK, and Royal Bank of Scotland.

We will leave it to our readers to determine just how effective these fines seem to be.

Chilly China – Japan Relations Overshadow African Call For Change

Leaders of Asian and African nations met this Wednesday at the Asian African Summit, a conference designed to support South South trade and cooperation. The summit was held in Jakarta, Indonesia.

While the leaders called for a new global order that is open to emerging economic powers and leaves the “obsolete ideas” of Bretton Woods institutions in the past the calls were overshadowed by the attendance of Japan and China, two large states increasingly at odds with each other.

Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping were, however, expected to meet on the sidelines of the conference. This looks like the latest sign of a thaw in relations between the Asian rivals.

Sino-Japanese ties have chilled in recent years due to feuds stemming back to World War Two, as well as territorial disputes and regional rivalry. Bilateral talks in Jakarta on Wednesday could continue a cautious rapprochement that began when Abe and Xi met at a summit in Beijing late last year.

Despite indications of progress Abe, in an apparent reference to China’s growing military aggressiveness, told the conference that the use of force by the “mightier” should never go unchecked.

The Japanese prime minister also said his country had pledged, “with feelings of deep remorse over the past war”, to adhere to pacifist principles such as refraining from acts of aggression and settling international disputes by peaceful means.

It is unlikely the remarks would satisfy China’s desire for Japan to acknowledge its wartime past, but a Japanese official told Reuters Abe and Xi would meet.

China’s communist system of governance has increasingly come under pressure at home as it inefficiently allocates resources and wages a brutal campaign against free speech and political expression inside the country. Expert believe at some point this will boil over, which could be soon given the country’s poor economic performance of late.

Chinese President Xi had earlier told the conference that “a new type of international relations” was needed to encourage cooperation between Asian and African nations, and said the developed world had an obligation to support the rest with no political strings attached, the Xinhua news agency said.

The comments ring particularly hollow as Mr Xi and the Chinese are known to be rabid consumers of fossil fuels and other commodity resources. China is increasingly looking to Africa to satisfy its insatiable demand and usually offers infrastructure investment in return for the right to mine resources.

The strategy is the polar opposite of Mr Xi’s comments yesterday and draws attention to China’s dismal record of environmental and social responsibility when operating in poorly developed host countries. Any investment from China means relatively large upfront payments but even larger environmental and social liabilities in future.

The conference will continue to discuss the role of developing nations in world politics, a tricky issue given their high population levels yet lack of resources to meaningfully contribute to world institutions.

World’s First Solar Plane Touches Down In China

The world’s first light powered air-plane, Solar Impulse, has arrived in east China city of Nanjing it was reported Wednesday.

Lead pilot Bertrand Piccard nosed the prop-driven vehicle back down to earth at 11:28pm local time. The plane had travelled 770 miles from Chongqing in the west of the country.

The ambitious project is aiming to be the first solar powered aircraft to circumnavigate the globe. The crew must now prepare for the challenge of crossing the Pacific.

The next leg of the journey won’t begin for 10 days as the aircraft must now undergo a thorough servicing in preparation for the feat.

Meteorologists on the Swiss team, who are based out of the control center in Monaco, will look for a suitable weather window for the ocean flight once the service is completed.

The trip will be done in two stages, with the first reaching over to Hawaii – a distance from Nanjing of about 5,000 miles. For the slow-moving aircraft, this means being airborne continuously for several days and nights, something not possible on today’s modern jetliners.

The trip was already simulated late last year. The team found that the weather opening was found quite quickly, but also recognizes that its stay in Nanjing could be a long one.

“I think 10 days is the time we need to get ready. Then we need to wait for a good weather window,” explained mission director Raymond Clerc.

“That could be three days; we could have to wait three weeks – because this leg is really the most important and is very complex. To go towards Hawaii could last five days and five nights.”

Captain Piccard has been sharing the flying duties in the single-seater with his business partner, Andre Borschberg. Borschberg, a trained engineer, will pilot the aircraft for the leg to Hawaii.

So far, Solar Impulse has covered about 5,000 miles since leaving Abu Dhabi, UAE, on 9 March.

Experience gained in the around the world journey will be applied to future aircraft designs, with the aim of both reducing earth polluting emissions and making the cost of air travel more affordable. It is likely that future electric designs could offer travels a slower yet cheaper service compared to today’s commercial aircraft.

Perfectly Clear Lake Michigan Exposes Lost Shipwrecks

In an interesting juxtaposition of the natural and manmade on Earth Day, the crystal clear post-winter waters of Lake Michigan have offered a rare glimpse of some of their hidden history.

A U.S. Coast Guard crew took a series of stunning photographs of shipwrecks lying on the lake bottom in the waters just off the Sleeping Bear Dunes National Lakeshore. The helicopter was a on a routine patrol when the crew spotted the wrecks and snapped pictures of them.

The shallow waters riddled with sharp rocks off the Leelanau Peninsula near Leland are the site of many 19th and early 20th century shipwrecks. The area is known as the Manitou Passage, between the mainland of the northwestern Lower Peninsula and North and South Manitou Islands.

Among the wrecks that the crew photographed was the Rising Sun, which foundered in 1917.

“This 133 foot long wooden steamer stranded just north of Pyramid Point,” the Coast Guard said. “She went to pieces and her wreckage now rests in 6 to 12 feet of water.”

Another was the James McBride, a 121-foot brig that ran around in 1857.

“Her remains lie in 5 to 15 feet of water near Sleeping Bear Point,” the Coast Guard said. “The McBride encountered a gale and was driven ashore near Sleeping Bear Dune.”

The U.S Park Service, which manages the Sleeping Bear Dunes National Lakeshore, announced last month that the wreck of the Jennie & Annie was visible again on the beach, halfway between North and South Bar lakes. The schooner grounded off Empire in 1872. The wreck becomes visible every few years depending on weather conditions.

Such weather include beach erosion, wind, waves and variable lake levels mean that various wreck fragments periodically become visible along the dunes shoreline.

The shipwrecks are considered public property and cannot legally be disturbed.

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EU Charges Gazprom With Abusing Dominant Position

Google isn’t the only one feeling the heat from the European Commission (EC). Americans.org learned this morning that the EU competition regulator has charged Gazprom, the Russian state energy company, with abusing its dominant market position. The charges concern the Central and Eastern European gas markets according to a statement released by the EC.

The Commission said its preliminary view was that the Russian energy giant was breaking EU anti-trust rules by limiting its customers’ ability to resell gas which allowed it to charge unfair prices in some EU member states.

The move is likely to interfere with Russian President Vladimir Putin’s economic and geopolitical strategy of setting prices favoring some customers and penalizing others, in line with whom he perceives as sympathetic and hostile to his increasingly belligerent agenda. Russia is a supplier of about one-third of the European Union’s natural gas.

Gazprom has openly acknowledged its ties to the Kremlin by previously warning Brussels that it has the “status of a strategic organization” in Russia. Putin’s government earns significant sums from the company.

The charges make it likely that Gazprom will eventually face a fine of over 10 billion euros, or about $10.7 billion. Long term the action will impact the firm’s profits by being forced to allow more competition in markets it has long controlled.

Gazprom now has 12 weeks to respond to the EC’s objections.

Dozens Of Dinosaur Eggs Found In Chinese City

The Chinese city that holds the record for having the largest number of dinosaur eggs in the world found a new batch to add to its impressive collection.

Construction workers dug up 43 fossilized dinosaur eggs during road repair work in Heyuan city in the Southern Chinese province of Guangdong on Sunday, according to officials

The city calls itself the “Home of Dinosaurs” and has won a Guinness World Record for the world’s largest collection of fossilized dinosaur eggs at its museum in 2004.

Huang Zhiqing, a director of the Heyuan Museum, said that it was the first time the fossils have been discovered in the bustling city center.

The road repair work was halted as a team of scientists and construction workers jumped down into the pit to dig out the fossils.

In total, nineteen of the eggs are completely intact, with the largest measuring as much as 5 inches in diameter, Huang said.

The scientists said they will continue to examine the fossils to determine which species of dinosaur they belong to.

Many of the eggs in the museum’s collection belong to oviraptorid and duck-billed dinosaurs, which prowled Southern China 89 million years ago.

Over 17,000 dinosaur eggs have been uncovered in and around the city since the first group of fossils was found by children playing at a construction site in 1996, according to China’s official Xinhua news agency.

Texas Researchers Find Fracking Causing Earth Quakes

Researchers in Texas have found conclusive evidence that hydraulic fracturing (fracking), a controversial process used to extract tough to reach oil and gas, causes earthquakes it was reported Tuesday.

A seismology team led by SMU believes it’s found a cause for the ones earthquakes that hit Azle, Texas a couple of years ago.

“Causal Factors for Seismicity near Azle, Texas” was published in the jounral Nature Communications. A press release about the findings of the study was also released on Tuesday.

Fracking involves pumping water and chemicals into the ground in large volumes so that petroleum liquids below it rise to the surface and can be easily extracted.

The team’s research states that “high volumes of wastewater injection combined with saltwater (brine) extraction from natural gas wells is the most likely cause of earthquakes.”

Oil and gas drilling takes water out of the ground as a byproduct of energy production. That same water is pumped back into the ground in wastewater injection wells. The SMU geologists measured those activities, centered around the Newark East Gas Field north and east of Azle.

The team discovered 70 energy-producing wells in the field, and two adjacent wastewater injection wells. When the levels of water injection and withdrawal increased so did the incidence of earthquakes, the report says.

The quakes they studied hit Azle between late 2013 and the spring of 2014, where seven quakes of magnitude 3.0 or higher were reported. The team developed a 3D model to investigate two intersecting faults and estimate stress changes.

The injection and withdrawal wells were near two faults. The combination of factors, initiated by the oil and gas water activity, likely produced the quakes, said Dr. Matthew Hornbach, an SMU geologist.

Their findings add to the controversy around the practice. Fracking has bee banned in numerous counties and states, including New York and many counties in California.

Google to Unveil Pay For What You Use Wireless Service

In what could mark a major turning point in mobile phone billing practices search giant Google is set to unveil a new U.S. wireless service as early as Wednesday, reports the Wall St Journal.

The move pushes the Internet giant further into telecom and injects fresh uncertainty into an industry already locked in a price war. Google is already offering landline internet access with it’s super high speed Google Fiber initiative in select cities. The company is already planning to expand the Fiber service aggressively in the coming months.

Google’s wireless service is expected to allow customers to pay only for the amount of data they actually use each month, a move that could further push carriers to do away with lucrative long term contracts.

Most traditional wireless plans require subscribers to pay for buckets of data that expire at the end of the month. A 2013 study by Validas, a company that analyzes consumers’ bills to help them choose the best plan, says smartphone users on average waste $28 each month on unused data.

But the lucrative practice is increasingly under pressure. Google won’t be the first to apply pressure as upstarts including Republic Wireless and Scratch Wireless have been offering usage based models, and even major carriers like T-Mobile US Inc. and AT&T Inc. have started to allow subscribers to roll over data.

Google’s wireless service will run on the networks of Sprint Corp. and T-Mobile, which have agreed to carry the traffic. The service will initially only work with Google’s latest Nexus 6 phones, with the devices dynamically switching between Sprint and T-Mobile networks depending on who has the stronger signal.

The service will also use Wi-Fi networks to route phone calls and data, which would further reduce subscribers’ bills.

Speaking at a wireless conference in Barcelona last month, Google executive Sundar Pichai downplayed the service saying it was going to be a small scale experiment and was not intended to disrupt the current wireless industry.

Yet the technological or pricing features Google adopts would certainly apply pressure to the industry’s current business model which is to lock up expensive spectrum then sell lots of expensive wireless Internet service. Google executives have criticized this practice in regulatory filings.

Google’s wireless project has been in the works for roughly two years and is a calculated move to agitate for change that is beneficial for Google’s main business: getting people to use more Google products and search more. This in turn drives lucrative search advertising revenue for the company.

Usage based pricing would make wireless data more affordable and therefore more accessible for people. It would thus encourage them to use more high data services like the company’s Youtube video site.

Google hasn’t built its own wireless network, instead offering service via agreements to resell the services of other networks. Those agreements are actually good business for the incumbent carriers. While these deals bring in less revenue than when a customer signs up directly, the deals have high margins and low costs. Sprint for instance had more than 10 million wholesale end-users at the end of 2014.

Yet Sprint didn’t make the decision to let Google resell its service lightly. The decision was made personally by Sprint Chairman Masayoshi Son, with counsel from former Chief Executive Dan Hesse. They ultimately reached a deal because Google agreed to volume limits that would lead to a renegotiation if Google’s service grew too big.

New Therapy Fights Depression As Well As Drugs

Mindfulness-based cognitive therapy (MBCT) could have significant positive effects for depression sufferers according to a report published Tuesday. Such therapy offers a “new choice for millions of people” with recurrent depression, a Lancet report suggests.

Scientists tested the therapy against anti-depressant pills for people at risk of relapse and found it worked just as well. The finding is significant given the side effects associated with the use of drugs.

The therapy trains people to focus their minds and appreciate that negative thoughts may come and go.

Doctors in Europe are already being encouraged to offer it.

Patients who have had recurrent clinical depression are often prescribed long-term anti-depressant drugs to help prevent further episodes. The right type of therapy could lessen or eliminate the need for these drugs although experts stressed that drug therapy is still essential for many.

In the lancet study, UK scientists enrolled 212 people who were at risk of further depression. The subjects were then put on a course of mindfulness-based cognitive therapy while carefully reducing their medication.

The therapy entailed patients taking part in group sessions where they learned guided meditation and mindfulness techniques.

The therapy helped people focus on the present, recognise any early warning signs of depression and respond to them in ways that did not trigger further re-occurrences.

Researchers compared their results to 212 people who continued to take a full course of medication over two years. They found a similar proportion of people had relapsed in both groups while many in the MBCT group had been tapered off their medication.

The researchers said these findings suggest MBCT could provide a much-needed alternative for people who cannot or do not want to take long-term drugs.

The report concluded that “may be a new choice for millions of people with recurrent depression on repeat prescriptions.”

Here in America, where drug costs are rising significantly, the therapy based approach may mean reduced care costs vs long term use of expensive prescription medication.

Celeb Backed Music Service Tidal A Predictable Flop

Beware celebrities looking to ‘disrupt’ established industries with powerful players at the top of their game. Tidal, the flashy streaming music service purchased by rapper Jay Z last month, looks set to join the ranks of Justin Timberlake backed Myspace, according to recent data.

Tidal’s bizarre launch, where the core message was ‘While other streaming music services like Spotify and Pandora pay a pittance to artists, Tidal offers musicians a better deal’ should have served as big red flag. Company launches typically focus on the value proposition to customers not suppliers.

The launch was even more bizarre because Tidal opted to use super stars like Nicki Minaj and Beyonce as spokespersons for the app. This resulted in the ultimate mixed message: You should feel sorry about how little money a megastar makes.

Two weeks after the sugar high of free publicity the app has crashed out of the top 700 hottest apps. Predictably American consumers have limited sympathy towards Beyonce and Nicki. Since re-launching the owners (we presume Jay himself) have kicked Tidal’s CEO to the curb in a “streamlining” move. The new CEO is a former consultant for the Norwegian Ministry of Environment – an odd choice of management in an industry that demands both technology and media experience.

As Tidal hits the rocks its main rivals are surging. As of April 20th, Pandora and Spotify held positions No. 3 and No. 4 on the U.S. iPhone revenue chart, respectively. This is notable as it marks the first time two music streaming services have hit the top 4 in sales at the same time.

In order to achieve this Pandora and Spotify had to knock Candy Crush Saga out of U.S. iPhone top 4 revenue chart, which is a stunning achievement.

A curious pattern can be observed in Spotify’s download performance immediately following the Tidal media campaign that bashed its allegedly meager payouts. Spotify rocketed back into the iPad Top 40 download chart on March 31st, right when Tidal’s anti-Spotify invective hit fever pitch in American media. The last time this happened was November 2014.

From this data it appears that Tidal’s attacks on Spotify and Pandora actually managed to increase public awareness of the services, notably increasing Spotify’s download performance at the end of March. A few weeks later and the combined revenue performance of the two music apps is hitting a new milestone. Beats Music, widely considered to be the motivating factor for Jay & Co. to get into the streaming game, has now started cracking U.S. iPhone top 20 revenue chart.

Tidal is now facing three deep-pocketed rival music apps that are all minting money and riding strong momentum. Apple is also currently working to enter the fray with what will no doubt be a very strong and extremely well financed product.

Tidal’s new CEO must somehow find a way to fix the disaster of a launch and find a way to position Tidal in a crowded market without giving its rivals extra attention.

We’ve seen this before with Myspace and we know how it ends. Tidal will continue to be an also-ran service run by poor managers who lack the necessary skills to compete effectively with the competition. We give the service 18 months before it officially closes up shop and you can expect the bell to start tolling well before that. R.I.P Tidal, we hardly knew ye.

Tesla To Launch Revolutionary, Made In America Battery April 30th

Elon Musk will make his next big announcement later this month and he won’t be joined on stage by an electric car or a space capsule. Tesla will finally share details on its long-awaited batteries designed for home use, plus a larger “utility-scale” battery as well. Both products will likely be manufactured in its new Gigafactory in Nevada.

Tesla’s charismatic founder Musk has dropped severl hints via social media that the batteries were on the way and now his spokesperson has confirmed it.

“We have decided to share a bit about what we will announce on the 30th,” Jeff Evanson, Tesla’s VP of investor relations wrote in a message. “We will introduce the Tesla home battery and a very large utility scale battery. We will explain the advantages of our solutions and why past battery options were not compelling.”

Tesla’s batteries are significant – both for the industry and for the country. It will mark the first time large scale battery production has occurred in the United States in some time. Such manufacturing has traditionally been done in Asia, with manufacturers preferring cheap Chinese labor or high technology Japanese manufacturing.

What Musk is doing, on an industrial level, is amazing and marks a resurgence of American manufacturing. The entrepreneur already pledged to make batteries for 500,000 cars by 2020 at its new Gigafactory located in Nevada.

The batteries themselves have been heralded as a serious game changer for the clean energy industry providing a low-cost alternative that will complement the growing demand for solar power. Given Tesla’s need to make large batteries for its cars the home battery product was an obvious addition.

But the real revolution could be in the “utility-scale” battery which is a new development. Given Tesla’s disruption of the vehicle market its perfectly logical to see it start selling batteries to utility companies and radically altering our energy future.

Batteries of the sort Tesla needs are a high scale business. The more that are made and the larger they are the cheaper they get. If Tesla is able to create markets that drive this sort of scale it could be game changing – both for industry and average Americans.

Cleaning With Bleach Linked To Respiratory Infections

Cleaning with chlorine bleach, long a staple of household cleaning cupboard, could be linked to higher rates of respiratory infections a new European study has indicated.

The researchers found that children in Finland, the Netherlands and Spain who were regularly exposed to environments cleaned with bleach had higher rates of respiratory-tract infections, including influenza, bronchitis and tonsillitis than those who were exposed to environments not cleaned with bleach.

“We should be aware that some of the products (like bleach) that we use in our homes for cleaning are chemicals that may have also some effect on our health and also on our children’s health,” said Lidia Casas of the Center for Environment and Health in Belgium, leader of the study.

Prior studies have also linked cleaning products to respiratory health issues in children, who may be more susceptible than adults. The thinking is that the infections may be because inhaling fumes from bleach can damage the trachea, Casas said.

Other past research, however, has found bleach use to be linked to lower rates of asthma and allergies in children, the researchers wrote in April’s edition of Occupational and Environmental Medicine.

To sort out the effects of bleach exposure on kids the researchers aimed to investigate if children living in homes cleaned with bleach had more infections than those living in homes where bleach wasn’t used.

The researchers contacted the parents of more than 9,000 children between the ages of 6 and 12 who attended schools in the Netherlands, Spain and Finland.

The research team has participants fill in a questionnaire asking how frequently the children had experienced infections such as the flu, bronchitis and pneumonia over the past year. The survey also asked if parents used bleach at least once per week to clean the house. The researchers also asked certain schools, where the children attended, about their use of bleach for cleaning.

The findings showed that the use of bleach was most common in Spain, where almost three-quarters of households cleaned with it weekly. Bleach was used least in Finland, where only 7 per cent of households used it. The same divide was seen in the schools, with all Spanish schools being cleaned with bleach, while none of the Finnish schools used it.

The researchers found that respiratory tract infections were most common among Spanish children, although children from the Netherlands had the highest rates of flu.

Casas noted that although the study shows a link between bleach and childhood illness, it does not show that the using bleach was what caused the infections.

If exposure to bleach is contributing to children’s infections, Casas theorized, it may be because certain chemcals in bleach such as chlorine can irritate and cause damage to parts of the respiratory tract. This damage may cause swelling and can increase the chance of infection, she said.

Alfred Bernard, a researcher at the Catholic University of Louvain in Belgium, cautions this explanation may not be the only possibility.

In the current study, as well as in some of his own research, Bernard said, “the effect of bleach on bronchitis risk was very small.”

Casas said that parents should take notice of the possible ill effects that cleaning products may have on the health of their children and suggested that they “temper a little bit the idea that living in a totally disinfected home is good.”

Bird Flu Outbreak Hits Millions of Iowa Hens

Nearly 3.8 million egg laying hens in an Iowa flock probably have bird flu it was revealed Tuesday. The biggest single outbreak of the virus reported in the U.S. added to concerns that turkey and egg supplies will be affected by the disease.

“Despite best efforts, we now confirm many of our birds are testing positive” for avian influenza, Sonstegard Foods Co., owner of the flock, said in a statement yesterday. The affected hens are located at its Sunrise Farms unit close to Harris, Iowa, in Osceola County.

As of February 1st the U.S. had 362.1 million egg-laying hens, and Iowa, with approximately 59.6 million, is the state with the most. Commercial turkey flocks with more than 2 million birds in eight states have been reported with the virus by the U.S. Department of Agriculture

“A lot of poultry meat and eggs won’t make it to market,” John Glisson, VP of research at the U.S. Poultry & Egg Association, said Tuesday at the National Chicken Council conference in Cambridge, Maryland. U.S. and Canadian authorities are “implementing plans that have been set up for years” to fight disease, he said.

Hormel Foods Corp., the owner of Jennie-O turkeys, announced Monday that its annual profit may be eroded because the virus is hampering production. Data concerning the spread of the virus and its overall trajectory was unavailable at the time of publishing.

Rogue Sheriff To Face Contempt Charges, Possible Jail Time

America’s lease law abiding sheriff begins a four-day hearing Tuesday that could bring fines, damage his credibility and make him politically vulnerable for repeated violations of a judge’s orders in a racial profiling case

Sheriff Joe Arpaio of Maricopa County, near Phoenix, has directly acknowledged disobeying the judge’s pretrial order that barred his aggressive immigration enforcement patrols.

He also failed to turn over traffic-stop videos in the profiling case and bungling a plan to gather such recordings from officers once some of the videos were discovered.

The hearing marks a rare attempt to hold the rogue sheriff personally responsible for his actions.

Arpaio is among the nearly two dozen people on the witness list, though it’s not clear if he’ll be called to testify.

U.S. District Judge Murray Snow will decide whether Arpaio and four of his aides should be held in contempt for violating the order barring the sheriff’s immigration patrols. Arpaio is believed to have intentionally not informed rank-and-file officers about the injunction, leaving them to violate the order for about 18 months.

The sheriff and his deputy, Jerry Sheridan, have acknowledged violating the order and being responsible for the agency’s failure to turn over traffic-stop videos and bungling the subsequent plan to gather recordings from officers.

It’s unfortunately not clear whether Arpaio’s legal troubles are signalling an end to his 22-year political career. His political strength has been gradually declining over the past four election cycles, but his base of devoted supporters and impressive fundraising help him beat competitors.

“This is a man who has flouted the law so notoriously over 20 years, and yet he appears to be unscathed, although we taxpayers have paid a price for it,” said Michael Manning, an attorney who has won more than $20 million in damages in lawsuits over deaths at Arpaio’s jails. Manning isn’t involved in the contempt case.

Snow has said he is going to later launch a criminal contempt case that could expose the sheriff to jail time. Here’s hoping he ends up in one of his own jails where he can see first hand the effects of his criminal actions have on inmates.

DEA Chief Michele Leonhart To Resign Over Sex Parties

Michele Leonhart, the head of the Drug Enforcement Agency (DEA), is expected to resign in the coming days, a senior administration official said today. The decision came as a result of extensive scandal and corruption within the agency.

Leonhart was confirmed to her position in December 2010 but had served in an acting capacity since November 2007. Under her watch she presided over an agency that has been plagued by scandal. Just last month, a report from the Justice Department’s Office of the Inspector General revealed that several DEA agents had engaged in numerous “sex parties” with prostitutes paid for by Colombian drug cartels.

The agency, like many others in our vast network of secret police, dragged its feet and withheld or redacted information during the investigation the report said. Investigators do not know the full extent of the sexual misconduct. Local DEA leaders failed to report allegations of their agents patronizing prostitutes and frequenting a brothel. At least one of them was alleged to have solicited and engaged in sexual relations with prostitutes. The revelations mirror those levelled against the Secret Service, another troubled law enforcement agency.

The report went on to detail how a foreign officer provided protection for the agents’ weapons and property during the parties, which occurred in government-leased housing and could have led to a security breach involving the agents’ equipment.

The House Oversight and Government Reform Committee asked the DEA to hand over any internal documents related to the misconduct, and it found that this kind of behavior was routine and dates back at least to 2001.

The timeline for Leonhart’s resignation is not yet known.

Defense Department To Fund Creation Of Advanced Darknet

The Defense Advanced Research Projects Agency (DARPA), the folks who brought you the internet, are looking to create an advanced, next generation, Dark Net it was reported on Tuesday. The project will build on the lessons of Tor, the current protocol powering today’s Dark Net.

Funding for the project, which began in 2014, is necessary due to threats from governments and hackers around the world have pushed Tor’s decade-old hidden service technology to its limits. To stay ahead in the security race, Tor is building the next-generation Dark Net in part with funding from DARPA.

The funding comes as part of DARPA’s Memex project, a “ground-breaking” search engine designed to be better than commercial titans like Google at searching the Deep Web and other less visible terrain for the U.S. intelligence, law enforcement, and military. DARPA is partnered with universities like Carnegie Mellon, NASA, private research firms, and several Tor Project developers to construct Memex.

DARPA is currently funding multiple projects aimed at improving Tor’s hidden services across “1-3 years,” Tor’s director of communications Kate Krauss stated. Tor declined to provide more details on the grant, like its monetary value and terms.

Roger Dingledine, Tor’s project leader, gave examples of nearly a dozen projects over the last year that utilized DARPA’s funding to address recent attacks on some of the Dark Net’s most famous websites.

These attacks, which started in March, targeted several hidden services with a unique yet simple cyberattack that slowed the entire Tor network and took specific sites offline for more than a week. The move inspired much worry about the security of many Tor users. Some of the sites are still having problems returning to normalcy.

The Memex project is looking at new technology development, fixes and upgrades, and in-depth statistics on hidden services to fund via grants.

The Dark Net road map is ambitious. Tor plans to double the encryption strength of a hidden service’s identity key and to allow for offline storage for that key, a major security upgrade.

Next generation hidden services will be able to run from multiple hosts in order to better deal with denial of service attacks and high traffic in general. This represents a major power boost that further closes the gap between the Dark Net and normal websites.

Led by lead data scientist Christopher White, Memex is explicitly not aimed at de-anonymizing any Tor user or “accessing information not intended to be publicly available,” according to a recent DARPA blog post.

Judge Grants Research Animal Legal Rights

A New York judge today granted a pair of lab animals from Stony Brook University the right to have their day in court. It is a decision that seems to recognize chimpanzees as legal persons for the first time.

Specifically the ruling marks the first time in U.S. history that an animal has been covered by a writ of habeas corpus, which allows human prisoners to challenge their detention. The action could force the university, which is holding the chimps, to release the primates. The ruling could also sway additional judges to do the same with other research animals.

“This is a big step forward to getting what we are ultimately seeking: the right to bodily liberty for chimpanzees and other cognitively complex animals,” says Natalie Prosin, the executive director of the animal rights organization, the Nonhuman Rights Project (NhRP). Her organization filed the case on behalf of the captive primates. “We got our foot in the door. And no matter what happens, that door can never be completely shut again.”

The case began in December 2013 with a salvo of lawsuits filed by NhRP . The organization claimed that four New York chimps — Hercules and Leo at Stony Brook, and two other animals on private property — were too “cognitively and emotionally complex to be held in captivity and should be relocated to an established chimpanzee sanctuary”.

NhRP petitioned three lower court judges with a writ of habeas corpus, traditionally used to prevent people from being unlawfully imprisoned. By granting the writ, the judges would have implicitly acknowledged that chimpanzees were legal people, too — a first step in freeing them.

The judges struck down each case, however, and NhRP has been appealing since. Today’s decision is the group’s first major victory.

In her ruling, New York Supreme Court Justice Barbara Jaffe ordered a representative of Stony Brook University to appear in court on May 6th to respond to NhRP’s petition that the animals “are being unlawfully detained” and should be immediately moved to sanctuary.

U.S. Postal Service To Trial Drone Delivery

Not be outdone by the Swiss the U.S. Postal Service has announced it is currently fielding bids from unmanned aerial vehicle manufacturers. The scope of the project seems to be greater than what the Swiss are doing as the project looks to develop new vehicles and delivery methods for its fleet.

In addition to the usual commercial manufacturers an interesting outsider has made its latest shortlist of 16 companies – a unique octocopter drone designed and built by The University of Cincinnati College of Engineering and Applied Science, and developed by UAV builder Workhorse Group, Inc.

The proposed delivery system is fairly radical. It is based around a ‘base’ van – called ‘WorkHorse’ – with an attached drone – called ‘HorseFly’. HorseFly is an eight-rotored UAV which can wirelessly recharge itself in just two minutes, using the base van as a power source.

The system involves the self-sufficient drone scanning the barcode of a package before using GPS to calculate the best route from the van to the address.

The key aspect of the idea is that the short distance between the van and delivery deals with the most prominent concerns raised in the last few years regarding the viability of delivery drones making relatively long flights over populated areas.

“Our premise with HorseFly is that the HorseFly sticks close to the horse,” Workhorse CEO Steve Burns stated last year “If required, the HorseFly will wirelessly recharge from the large battery in the WorkHorse truck. The fact that the delivery trucks are sufficiently scattered within almost any region during the day makes for short flights, as opposed to flying from the warehouse for each delivery,”

Despite lagging behind places the the United Kingdom, Canada and Switzerland The Federal Aviation Authority is expected to unveil a catch-up framework for drone use in the commercial sector this year. The agency still seems to have ongoing concerns about self-controlled drones meaning that HorseFly has an extra hurdle to overcome with respect to bidders from other more established markets.

Kelly Cohen, associate professor of aerospace engineering at UC, remarked “With the HorseFly project, we developed a brand-new aircraft and airframe from scratch, and we built the system with the ability to look into different applications. Now we can build a family of octorotors and find out the best possible configuration. There is no textbook on multirotor aircraft design. Here we have been pioneering this effort, and we’ve come up with something successful,”

Supreme Court Rules Sniffer Dog Traffic Stops Illegal

The Supreme Court delivered a rare win for civil liberties in a landmark ruling handed down today. The court ruled that police officers violate the Constitution when they extend an otherwise completed traffic stop to allow time for a police dog to sniff for drugs and other contraband.

The judges, voting 6-3, said that officers cannot lengthen the stop to perform a dog sniff unless they have specific reason to suspect the suspect’s car is carrying illicit items.

The justices ruled that police authority “ends when tasks tied to the traffic infraction are — or reasonably should have been — completed,” Justice Ruth Bader Ginsburg wrote for the majority.

The ruling is a surprising victory for Dennys Rodriguez, a man facing a five year prison sentence for carrying a bag of methamphetamine in his car during a 2012 traffic stop.

Rodriguez was pulled over on a Nebraska highway for driving out of his lane and was then made to wait an additional seven or eight minutes for a drug-sniffing dog to arrive and search his vehicle. He received the sniffer search after he had received a warning ticket for the traffic violation.

While the high court ruled a decade ago that police can conduct a dog sniff during a traffic stop without running afoul of the constitutional ban on unreasonable searches and seizures the latest case tested whether officers could continue detaining a car while waiting for a trained dog to arrive.

Predictably, justices Clarence Thomas, Samuel Alito and Anthony Kennedy dissented. Writing for the dissenting group, Thomas said Ginsburg’s reasoning would link the constitutionality of a drug sniff to the officer’s efficiency in completing the traffic stop, a rather thing line of reasoning given the large ramifications of the already questionable sniffing practice.

Despite the still problematic use of sniffer dogs, who cannot speak or otherwise clearly indicate their reasoning for ‘signalling’ a suspicion, today marked a rare instance where the high court has pared back the level of invasiveness permitted by law enforcement.

The case is Rodriguez v. United States, 13-9972.

Nokia To Start Making Phones Again

In what will surely be welcome news for the Finnish economy, which has been devastated by job losses at the national icon, rumours are circulating that the iconic manufacturer will start producing smartphones again.

Recode, citing two unnamed sources, claims the Finnish company already has plans to start releasing mobile devices once non-compete with Microsoft expires at the end of this year. The effort is being led by Nokia Technologies, the company’s licensing arm, which holds some 10,000 patents covering advanced mobile phone technologies.

The company’s new line of smartphones will allegedly look a lot like its recently released N1 Android tablet, which bodes well for the company as the n1 is generally thought of as a pretty good device. The device would likely run Google’s Android operating system with some minor modifications.

Interestingly, the company has also been working on a virtual reality solution as well.

While the company still has a steep mountain to climb to regain its former glory the strong brand and legendary build quality could make for a compelling new product. Still, this is exciting news for such a historic brand.

Monsanto Furious At WHO For Finding Roundup Causes Cancer

Despite a Monsanto lobbyist refusing to drink water contaminated with Roundup, even though he was tasked with arguing that it was perfectly safe, the agribusiness giant is irate with the World Health Organization for finding evidence the popular pesticide causes cancer in humans.

Roundup is the world’s most widely used herbicide and so Monsanto understandably wants an international health organization to retract a report linking the chief ingredient in Roundup to cancer. Why consider human life and health if gets in the way of sales, right?

The company said on Tuesday that the scientific report, issued on Friday by the World Health Organization’s International Agency for Research on Cancer (IARC), was “biased” and contradicts regulatory findings that the ingredient, glyphosate, is safe when used as directed.

A working group of the IARC, based in Lyon, France and further from the U.S. bully’s hardline tactics than many regulators, said after reviewing scientific literature it was classifying glyphosate as “probably carcinogenic to humans.” based on the data examined. This wouldn’t be the first toxic substance mass produced by the company. Its other deadly products have included Agent Orange, PCBs and Dioxin.

“We question the quality of the assessment,” Philip Miller, Monsanto vice president of global regulatory affairs, predictably said on Tuesday in an interview. “The WHO has something to explain.”

To provide some context for the scope of the issue, the U.S. Geological Survey estimated agricultural use of glyphosate in 2012, the most recent year available, at more than 283 million pounds, up from 110 million pounds in 2002.

Bank Of England Questions Warren Buffet’s Berkshire Hathaway

An unusually negative story about Berkshire Hathaway, the giant firm owned by the world’s second richest man Warren Buffett, has emerged. According to reports from the Financial Times The Bank of England wrote to US authorities to ask why Berkshire was absent from a provisional list of “systemically import” (Too Big To Fail) financial institutions (SIFIs).

Worryingly, the US Treasury declined to comment and ignored the request. Such a stance is troubling and raises concerns about the level of connectedness between the tycoon, his businesses and U.S. regulators.

Berkshire operates a large number of very large insurance businesses (Geico, General Re, Applied underwriters and 6 more). The inquiry from the Bank of England comes are fellow insurer MetLife is suing the US government to try to escape being deemed systemically important by Washington.

Such a designation means the firm must hold more capital to cover unexpected losses and could face a requirement to draw up “living wills” to make them easier to wind down in a crisis.

The British regulators are upset over the reluctance to subject Warren Buffett’s Berkshire Hathaway to tougher scrutiny as part of a worldwide push to make the global financial system safer.

Regulators have thus far focused on primary insurance companies — including AIG of the US, Germany’s Allianz and UK-based Prudential — and designated them globally “systemically important”.

The UK bank, along with primary insurers, are upset over the failure to designate reinsurers as systemically important. The objecting parties argue reinsurers are more important to the financial system and carry higher risk of deep losses in the event of crises.

There are allegations of tampering by the reinsurers as the The Basel-based FSB was expected to make the reinsurance list public last year. But in November, following “consultation with national authorities”, it postponed the decision “pending further development of the methodology”.

It gets more interesting…

The global list is also mirrored by a national list here in the United States. In this list Berkshire crosses thresholds that would make it designated as it has more than $50bn in assets and more than $3.5bn of derivatives liabilities.

Despite being on the provisional American list the final decision on the global list is made by a council of US regulators who have not yet opted to subject Mr Buffett’s company to increased oversight for some reason, despite the clear evidence of its systemic importance.

For these reasons the international regulators are none too pleased at this ‘one rule for you, another rule for us’ plan and are making their displeasure known. It’s becoming clear that Mr Buffett’s financial heft combined with his unparalleled political connections give him and his companies special treatment.

Greece Announces Capital Controls, Moves Closer To Bankruptcy

Greek citizens awoke this morning to their country being one step closer to bankruptcy. Yesterday, following weeks of intense speculation, Greece finally launched its first round of capital controls, when it declared that due to an “extremely urgent and unforeseen need”, it would be “obliged” to transfer (i.e. confiscate) “idle cash reserves” located across the country’s local governments (cities and municipalities) to the Greek central bank.

As can be imagined the response by ordinary Greeks was less than exuberant as they realize now what the endgame is.

Bloomberg reports, that “as Greece struggles to find cash to stay afloat, local authorities say they oppose a government decision to use their reserves for short-term financing.”

“The government’s decision to seize our reserves not only raises legal and constitutional issues, but also a moral one,” said George Papanikolaou, the mayor of Glyfada, the third-largest municipality in the metro area of Attica. “We have a responsibility to serve our citizens,” Papanikolaou said by phone on Monday. Glyfada has about 16 million euros in cash reserves, he said.

As local mayors, treasurers and other elected officials who see the bank accounts of their municipalities awake this morning they will find there is precisely zero euros in their accounts, as all the money has now been forcibly moved to the federal government in order to repay IMF obligations.

Unfortunately for Greece, this is the only option left as the money has now fully run out. Greek Prime Minister Alexis Tsipras ordered local governments and central government entities to move their cash balances to the central bank for investment in short-term state debt.

“It is a politically and institutionally unacceptable decision,” Giorgos Patoulis, mayor of the city of Marousi and President of the Central Union of Municipalities and Communities of Greece, said in a statement on Monday.“No government to date has dared to touch the money of municipalities.”

It took the radical leftist party all of 2 months since coming to power.

What makes this deeply troubling is that the use of confiscated proceeds is unclear: the government says it is to pay pensions and wages, yet the same government recently confiscated pensions to repay the IMF, so according to the chain of logic, the government first raided pensions, and now municipalities, just to repay the dreaded IMF.

Once everyone realizes what just happened expect protests and riots to flare up. While they have been quiet since 2012 this confiscation will have dire consequences for the Greek people and the weak Syriza government. Expect things to rapidly become more volatile in the coming weeks.

Jon Corzine, Man Too Rich To Be Jailed, Starting Hedge Fund

Jon Corzine, the man who led MF Global to one of the ten biggest bankruptcies in U.S. history, thinks he’s due for a comeback. After losing $1.6 billion of client money through illegal transactions the former New Jersey governor wants to have another crack at things.

Mr Corzine’s plans are a stunning example of everything that is wrong with American financial regulation.

By all accounts Corzine should be in jail. In the MF global bankruptcy he moved client money into firm accounts, a serious securities law violation, where he proceeded to gamble it recklessly and pay firm expenses. After these actions caught up with him the company declared bankruptcy and Corzine somehow escaped jail.

Using his vast wealth and connections (Mr Corzine was formerly President of Goldman Sachs) he escaped jail despite his actions being a business school case study in illegal conduct.

With his ego now deflated Mr Corzine would like to come back and manage yet more client money despite showing extremely poor character and losing $1.6 billion of client money. Mr Corzine’s clients were people from main st. America – teachers, fire-fighters and others with pensions managed by his firm.

The fact Mr Corzine is in the securities industry at all is shocking and shows just how toothless the SEC and Justice Department are when it comes to dealing with the fabulously rich and connected. While ordinary inside traders can get years in prison and banned from the securities industry for life, political elite like Corzine get second chances to do more damage to hard working Americans.

Mr Corzine’s ambitions should serve as a rallying cry for increased oversight of financial markets as well as a call to your local elected representatives to ask why, despite knowingly, willingly and clearly breaking the law, is this man not in jail.

Why The String Of Cartel Head Captures Means Nothing

The New York Times reported yesterday that Mexican authorities had captured Juárez Cartel boss Jesús Salas Aguayo, the latest in a string of headlines claiming victories in the war on drugs. Known as ‘The Liquidator’, the country’s authorities claim he is ‘linked to the bloodiest events ever recorded in Juarez City’. His brutal and ruthless methods, such as dispatching his enemies with the use of dynamite, earned him both the nickname and a place on the DEAs most wanted list.

Earlier this month Mexican police arrested Sinaloa “cartel kingpin” Cesar Gastelum Serrano, which came on the heels of the March arrest of Treviño Morales, leader of the feared Zetas drug cartel. Late last year authorities also nabbed Joaquin “El Chapo” Guzman, perhaps the greatest narco trafficker of all time.

While the arrests have helped President Enrique Peña Nieto with domestic popularity they have done little to stop either the drug trade or the associated violence.

When one cartel falters another (or two or three) is quick to take its place. The massive profits to be had from trafficking drugs from South America to the United States mean there will always be drug traffickers to fill the void. For as long as drugs remain an illicit, underground economy, the violence will persist.

In order to stop the violence more progressive drug policies are needed. Were every drug to be legalized and regulated the powerful economic incentive would be removed and the cartels, along with their violence, would fade into the distant past.

Such a stance is not politically fashionable but it is the right thing to do. From a social perspective it would help thousands of young men and innocent third parties avoid the inescapable cycle of gang life. Gone would be the lucrative employment opportunities offered by gangs, the most commonly cited reason for participating. Remove this powerful force and you’ll see a sea change of behavior.

Economically the legalization and regulation of all drugs would have tremendous benefits. American companies would product the products and all economic benefits of their sale would accrue to Americans. Presently hundreds of billions of dollars annually is transferred, illicitly, to South America. This American wealth would remain in our country and help our economy to thrive. Ridiculous expenditures on paramilitary policing, the DEA and other related organizations would be eliminated, instead replaced by a reasonably sized regulatory and compliance apparatus similar to the FDA. These savings could be spent on outreach and counselling programs for those who use these newly legal substances, helping to break the cycle of dependence and addiction.

Legalizing and regulating drugs is not popular if you’re in office. But it is the right thing to do, both for our society and our economy. It’s the American way, even if most in office have yet to realize it.