Business Insider: Henry Blodget

DEAR READERS: What Would You Like In Your Business Insider Premium Membership Service?

Henry Blodget — Tue, 18 Jun 2013 12:15:50 GMT

Hello, everyone!

Thank you for reading Business Insider. We know you have an overwhelming number of things to watch, listen to, and read every day, and we're grateful for every minute you choose to spend with us.

Today, while you are here, we would be grateful if you could answer a simple question.

We're going to launch a premium membership (subscription) service eventually, and we would love to have you all become members.

With that in mind...

If we were to offer you a membership for, say, $5-$10 a month, which of the following benefits would you like us to include?

Thank you in advance!

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Yes, At Some Point China Will Implode

Henry Blodget — Mon, 17 Jun 2013 15:16:00 GMT

If there has been one prediction made more than any other over the past couple of decades, it's that China's miraculous economy is headed for a fall.

China bears have pointed to a long list of disasters-in-the-making, from questionable economic statistics to skyrocketing real-estate prices to ghost cities to centrally planned growth to corruption to pollution to civil unrest to debt.

And yet, despite all of these concerns, China's economic machine has just kept chugging along.

But this time it's going to be different!, says an analyst from Fitch. This time, China really is screwed.

According to Ambrose Evans-Pritchard of the Telegraph, Fitch analyst Charlene Chu has concluded that China's growth is being fueled by a credit bubble that is unlike anything the modern world has ever seen. This debt bubble is leading to massive overbuilding, Chu says. And when it finally bursts, as debt bubbles always do, China will be looking at a Japan-style depression and deflation.

Given the number of China doom prophesies that have been made over the past two decades, you can be forgiven for rolling your eyes at this one and moving on. But Chu does cite some startling statistics, including the claim that China's debt-to-GDP ratio has quietly shot up to more than 200% and that each additional yuan borrowed is producing ever less growth. If there's any hard law of finance, it's that what can't go on forever won't. And borrowing at this rate relative to economic growth can't go on forever.

That said, as always, the key question is "when?"

At some point, China's economy is almost certainly going to go through the same sort of violent setbacks that every economy goes through, including the economy with which China's is compared--the U.S. economy.

The growth of the U.S. economy over the past century has been nothing short of miraculous. But it has been anything but a smooth ride. Amidst its decades of expansion, the U.S. has gone through several decade-long periods of depression and stagnation, often following debt buildups just like the one China appears to be experiencing. In fact, the U.S. economy is still struggling to move past its latest debt-fueled bubble, the housing boom that turned to bust five years ago and took the country down with it.

If China manages to avoid this boom-bust pattern forever, the country's resurgence really will be miraculous. And what is likely to send the Chinese economy into its own depression is exactly the sort of debt buildup that Chu describes.

But booms often last much longer than most analysts think they can. And unless or until we know exactly when China's boom will end--which, if history is a guide, we won't know until after the fact--it's hard to make decisions based on this forecast.

Yes, at some point, China's economy will crack. Alas, no one knows when.

Aaron Task and I discussed this on Yahoo's Daily Ticker this morning >

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This Is What The US Capitol Dome Looked Like When It Was Being Built During The Civil War

Henry Blodget — Fri, 14 Jun 2013 21:30:00 GMT

Historian Michael Beschloss just tweeted this picture of the United States Capitol dome under construction during the Civil War. The building in the foreground, Beschloss says, is the Trinity Episcopal Church, which was demolished in 1936.

Wikipedia has more on the history of the Capitol building here. You can follow Michael Beschloss here.

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This Guy Is Herding Cows And Sheep Into A Mountain Pasture In The Xinjiang Uighur Autonomous Region

Henry Blodget — Fri, 14 Jun 2013 21:06:00 GMT

Reuters says this is a herdsman driving his cows, sheep, and goats to their summer pastures in Altay Prefecture, Xinjiang Uighur Autonomous Region. That's a mouthful. But it's a pretty cool picture.

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Firefighters Somehow Saved This House From The Most Destructive Forest Fire In Colorado History

Henry Blodget — Fri, 14 Jun 2013 20:50:00 GMT

Firefighters somehow saved this house from the Black Forest fire in Black Forest, Colorado. The fire has already destroyed 360 houses. It is the most destructive fire in Colorado history.

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So, Now That Edward Snowden May Blab US Secrets To China, Do You Still Think He's A Hero?

Henry Blodget — Fri, 14 Jun 2013 15:05:00 GMT

Last weekend, after 29 year-old government contractor Edward Snowden revealed himself to be the source of several major U.S. intelligence leaks, most people regarded him as a hero.

Snowden, most people agreed, had revealed outrageous, illegal privacy abuses by the U.S. government spying machine. Revealing these secrets was a patriotic act, people said. Snowden might have broken some laws, but he had America's best interests at heart. Americans should be grateful.

A few days later, however, Snowden's motives seem less pure. And his characterizations of U.S. intelligence activities seem less accurate, more personal, and more naive.

For example:

Snowden told the Washington Post and Guardian that the U.S. government had direct access to the central servers of Google, Facebook, and other global Internet companies and said this surveillance capability was so powerful that the government could watch your thoughts form as you type. This claim appears to have been wrong.
Snowden said that he, a 29 year-old contractor, had the authority to wiretap anyone in the U.S. from his desktop, including you, your accountant, a federal judge, or the President. This claim seemed far-fetched, and a senior government official has since disputed it. (This doesn't mean it's wrong, but it still seems like an exaggeration.)
Some NSA behavior that Snowden has characterized as illegal and evil appears to serve a legitimate purpose: Protecting the United States and American citizens. Snowden himself may think we worry too much about terrorism, and Snowden himself may prefer to give up some security for more privacy, but it's not clear that the average American agrees with his personal balance on this. And this is likely even more true when Americans understand how data like phone records can be used to protect America without abusing individual privacy rights.
Snowden gave an interview and documents to the South China Morning Post revealing that the U.S. had repeatedly hacked Chinese computers. Assuming Snowden is right about the hacks, it's probably healthy for Americans to learn that their government's holier-than-thou complaints about China's own cyber-espionage are hypocritical. But this revelation put the U.S. even more on the defensive with respect to China, which theretofore had been regarded as the king of abusive hacking. And if Snowden's goal really is to help the United States, and not to suck up to China for amnesty, unveiling this news in a Hong Kong newspaper seems a strange way to go about it.

Today, the South China Morning Post reported that China is now going to evaluate whether Snowden can be an asset to China's national security... or whether he would be a liability. Then, the report continues, Beijing will decide whether or not to extradite him.

While making this decision, experts predict, China will attempt to pump Snowden to determine everything he knows.

This interrogation will put Snowden in an interesting position, one that will reveal more about his motives and intent.

If Snowden willingly tells China everything he knows about U.S. intelligence efforts, especially with respect to China, this American, at least, will conclude that Snowden does not actually have America's best interests at heart. This American will also conclude that Snowden is either clueless about the Chinese government's own reputation for snooping on and prosecuting its citizens, or is motivated by something other than not wanting to live in a society in which the government keeps a record of everyone's phone calls.

Ultimately, of course, the debate in America should not be about Snowden himself but about the activities of our government--specifically, whether our intelligence efforts have gone too far and whether we should add more checks and balances to them.

I have been persuaded of the latter. I think the U.S. Congress should add the same oversight and transparency to Foreign Intelligence Surveillance Act actions as it does to normal U.S. legal proceedings. I think these checks and balances will keep the government more honest and give innocent people more opportunity to defend themselves from any abuses or mistakes that occur.

I am not yet persuaded, however, that U.S. intelligence efforts have gone too far. I understand the concerns about them, but I also now understand better what the government is trying to do with the data it collects, as well as how it is legally able to use this information. I am not blase about the risks that go along with this, which is why I would like to see more transparency and more checks and balances. But I'm not ready to denounce the government for building a database of phone records and using it in carefully restricted ways.

(I know less about the government's collection and use of Internet data, and I would certainly like to know more about that. That's one reason I am willing to trade away a bit of security to have the National Security Agency operate more transparently.)

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I've Decided I'm Okay With The Government Collecting My Phone Records*

Henry Blodget — Fri, 14 Jun 2013 11:50:00 GMT

After much consideration, I think I'm fine with the U.S. government collecting my phone records (subject to certain conditions, as spelled out below).

I'm not certain about this yet. If you make some great points about why I shouldn't be fine with this, I might reconsider.

But, for now, I'm ready to tell the National Security Agency to carry on.

Why?

Because now that I've heard some examples about how the NSA might use my phone records (and yours) to prevent another terrorist attack or national security threat--i.e., for good--I'm willing to sacrifice a bit of privacy to help them do that.

I described one example of this here. This example is a scenario in which the NSA gets a tip that someone in America is planning a terrorist attack and is getting calls about it from a mastermind in Yemen. These calls from and to Yemen are going to throwaway phones, with a different phone used each time. And they're happening just before the planned attack, so there's no time to go through a standard call-record sub-poena process.

After getting the approval of the Foreign Intelligence Surveillance Act court, the NSA searches its massive database for calls made between the U.S. and Yemen. And it discovers that there were two calls made from the same area to a number that they're tracking in Yemen. Using this and other information, the NSA figures out who is making the calls. And, if other evidence warrants, they arrest this person before the attack.

Having lived through 9/11, the Boston massacre, the Lockerbie bombing, and other terrorist attacks that hit close to home, I'd be happy to have the NSA use my phone records that way if that might help prevent more such attacks. (Nothing will prevent ALL attacks--I'm not delusional about that).

As long as the NSA doesn't use my phone records in other ways, or mistakenly conclude from my phone records that I am a terrorist, I'm okay with this.

And if the NSA does happen to conclude that I am a terrorist, I would hope that the rest of the U.S. legal system would kick in and allow me to defend myself against that conclusion.

Yes, this is where it gets sticky. And this is where I think we need some changes.

The secrecy of the FISA court, as well as the fuzzy laws and ethics around what the government can do to suspected terrorists, might allow the government to "indefinitely detain" me or drone me or otherwise ruin my life because of their mistake.

And that would certainly be a bummer.

It's worth noting, though, that the government occasionally also comes to mistaken conclusions about other people it suspects of crimes, and that, sometimes, even with the full checks-and-balances of the regular U.S. legal system, these mistakes lead to innocent people getting locked up or killed.

And it's worth noting that standard domestic surveillance and investigations can also be conducted in secret, just like FISA investigations. Once the FBI gets a warrant, they can tap your phone and my phone without telling us. They can secretly gather evidence to present to a grand jury in secret and use the evidence to persuade the grand jury that we should be indicted--all without our knowing that we are even under investigation. Only later, if we are indicted, will we learn that we were being surveilled. And if the FBI eventually decides not to indict us, we might never know.

In short, there's plenty of secrecy in the full-blown U.S. legal system, too. And it's certainly not perfect in terms of always prosecuting only the guilty and protecting the innocent.

But the checks and balances in the U.S. legal system do allow you to defend yourself in court once you have been accused. And they also, arguably, create a higher hurdle for the government to demonstrate "probable cause," in part because the judge who issues a warrant will know that his or her decision will be scrutinized. Grand juries do, occasionally, refuse to issue indictments. And judges do, occasionally, toss bad cases out of court.

And all of those things do provide more protection for individual citizens, who are otherwise usually woefully outgunned by the power and resources of the government.

So adding more oversight and transparency to the process by which the NSA gathers data, what data it gathers, and how it uses this data, would seem to be wise. And so would adding more ability for suspected terrorists to legally defend themselves.

That's my current thinking.

I'm okay with the NSA collecting my phone records, provided they can't use them for any purpose other than the one described above: Data mining to look for specific communication patterns that suggest a possible national threat.

I would also like to see FISA court decisions be subjected to the same checks and balances that govern the rest of the U.S. legal system.

And I think even suspected terrorists should be presumed innocent until they are proven guilty.

If these additional checks and balances on the NSA and FISA slightly reduce the country's ability to protect itself against terrorist attacks, I can live with that. These checks and balances reduce the government's ability to put ordinary criminals in jail, but as a society, we have decided that this tradeoff is worthwhile. And I think it is worthwhile. Avoiding prosecuting some innocent people for crimes they didn't commit is worth allowing some actual criminals to go free.

So, go ahead and take my phone records, NSA. Please use them responsibly and wisely, as described above. And please keep protecting the country as well as you have since 9/11.

And Congress, please get cracking on providing more oversight and transparency around the FISA court system, as well as basic legal rights for the accused.

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China To Weigh Snowden's Fate

Henry Blodget — Fri, 14 Jun 2013 01:51:16 GMT

China will consider whether NSA leaker Edward Snowden is an asset or liability to China's state security, Teddy Ng and Zhang Hong of the South China Morning Post report.

And after China determines that, apparently, the country will decide whether or not to extradite him.

In the meantime, Snowden is scoring points for China in the propaganda war.

Yesterday, China State television network CCTV weighed in on the Snowden case, saying he "risked his own life to expose the U.S. hypocrisy," the SCMP reports.

Beijing's decision about Snowden will reportedly be conveyed through Hong Kong, because Beijing won't want ruffle the U.S.'s feathers by appearing to be directly involved.

According to a professor at Peking University, Beijing's preference is likely to extract as much information as possible from Snowden and place his fate in the hands of the Hong Kong court system.

If nothing else, Snowden's leaks and accusations that the U.S. has been hacking China have been a boon to China in the relations between China and the U.S. Suddenly, China has gone from being the bad boy of global cyberwarfare to the victim. If Snowden continues to tell China everything he knows about U.S. intelligence, his assertions that he has the U.S.'s best interests at heart will likely rapidly come to seem hollow.

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STEVEN SPIELBERG: The Movie Industry Is About To Implode

Henry Blodget — Thu, 13 Jun 2013 14:17:00 GMT

Steven Spielberg and George Lucas made some startling comments at USC yesterday, David Cohen of Variety reports.

The two movie moguls said the movie industry is about to implode.

What's happening, Spielberg and Lucas said, is that Hollywood is betting ever more heavily on a handful of massive-budget general-interest blockbusters each year, while losing the regular movie-going audience to the Internet and TV.

And soon, Spielberg predicted, some of these humongous bets will blow up, demolishing the industry:

“They’re going for the gold,” said Lucas of the studios. “But that isn’t going to work forever. And as a result they’re getting narrower and narrower in their focus. People are going to get tired of it. They’re not going to know how to do anything else.”

Spielberg noted that because so many forms of entertainment are competing for attention, [the studios] would rather spend $250 million on a single film than make several personal, quirky projects.

“There’s eventually going to be a big meltdown,” Spielberg said. “There’s going to be an implosion where three or four or maybe even a half-dozen of these mega-budgeted movies go crashing into the ground and that’s going to change the paradigm again.”

Lucas predicts that the movie-theater industry will soon evolve into something like Broadway, where huge blockbuster movies are shown for long periods on huge screens and tickets cost fantastic amounts of money:

Lucas predicted that after that meltdown, “You’re going to end up with fewer theaters, bigger theaters with a lot of nice things. Going to the movies will cost 50 bucks or 100 or 150 bucks, like what Broadway costs today, or a football game. It’ll be an expensive thing. … (The movies) will sit in the theaters for a year, like a Broadway show does. That will be called the ‘movie’ business.”

“There’ll be big movies on a big screen, and it’ll cost them a lot of money. Everything else will be on a small screen. It’s almost that way now. ‘Lincoln’ and ‘Red Tails’ barely got into theaters. You’re talking about Steven Spielberg and George Lucas can’t get their movies into theaters.”

So that's the future of the movie industry, according to two of the most successful directors and producers in history.

But don't go crying for Hollywood. There's still plenty of money in making movies and series for smaller screens. And the proliferation of on-demand services over the Internet is making these movies and series easier to see than ever.

And don't go crying for consumers, either. The quicker the traditional movie industry breaks down, the quicker you'll be able to see the movies you want to watch be available on your own personal screens--instead of having to schlep to a dirty cramped theater, paying through the nose, and then having an obstructed or sideways view.

Read about the demise of the movie industry at Variety >

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If You're Still Freaking Out About The Government Grabbing Your Phone Records, Calm Down And Read This ...

Henry Blodget — Wed, 12 Jun 2013 15:52:00 GMT

Last week, it was revealed that the nation's biggest telecom companies are sending the government records of every phone call made on their systems every day.

These revelations have caused not just privacy fanatics, but most ordinary Americans, to freak out about privacy and worry that the country's data gathering and obsession with security has gone too far.

So should you be freaked out that the government is collecting your telephone records?

Actually, no, says Stewart Baker, the former top lawyer at the National Security Agency, in a column at Foreign Policy.

Baker starts off by emphasizing the following points:

The government is not collecting the content of your telephone calls — just the "meta-data" records associated with them.
There are very tight restrictions on how the government is allowed to search and use these records once it has collected them.
The NSA is not allowed to use any insights it gleans from these records to do anything to you unless it thinks you are a spy or a terrorist.

Baker then offers the following example to explain why the NSA would want to build a database of call-record meta-data and how it might use that data for good — to help stop terrorists. (Many people have assumed that the only reason the NSA would want this data is that it wants to spy on ordinary law-abiding Americans.)

Baker's example is complicated. But it will give you a sense of what the NSA might legitimately be trying to do with this data, as well as the challenges the agency faces in doing the job that the country has asked it to do.

[W]hy would the government collect all these records ... And, really, what's the justification for turning the data over to the government ...?

Consider this entirely hypothetical example.

Imagine that the United States is intercepting al Qaeda communications in Yemen. Its leader there calls his weapons expert and says, "Our agent in the U.S. needs technical assistance constructing a weapon for an imminent operation. I've told him to use a throwaway cell phone to call you tomorrow at 11 a.m. on your throwaway phone. When you answer, he'll give you nothing other than the number of a second phone. You will buy another phone in the bazaar and call him back on the second number at 2 p.m."

Now, this is pretty good improvised tradecraft, and it would leave the government with no idea where or who the U.S.-based operative was or what phone numbers to monitor. It doesn't have probable cause to investigate any particular American. But it surely does have probable cause to investigate any American who makes a call to Yemen at 11 a.m., Sanaa time, hangs up after a few seconds, and then gets a call from a different Yemeni number three hours later. Finding that person, however, wouldn't be easy, because the government could only identify the suspect by his calling patterns, not by name.

Then Baker explains why the NSA would want and need to build its own database of the call-record data, rather than making specific data requests of each telecom provider whenever circumstances warranted.

So how would the NSA go about finding the one person in the United States whose calling pattern matched the terrorists' plan? Well, it could ask every carrier to develop the capability to store all calls and search them for patterns like this one. But that would be very expensive, and its effectiveness would really only be as good as the weakest, least cooperative carrier. And even then it wouldn't work without massive, real-time information sharing — any reasonably intelligent U.S.-based terrorist would just buy his first throwaway phone from one carrier and his second phone from a different carrier.

The only way to make the system work, and the only way to identify and monitor the one American who was plotting with al Qaeda's operatives in Yemen, would be to pool all the carriers' data on U.S. calls to and from Yemen and to search it all together — and for the costs to be borne by all of us, not by the carriers.

In short, the government would have to do it.

In other words, Baker has provided a concrete example in which the NSA might use call-record data to foil a terrorist plot without invading the privacy of any law-abiding Americans.

If Americans could be confident that this is the only way their call-data record would be used, more of them would likely be comfortable with the NSA collecting it. So, like many other revelations the country has had since the start of these leaks, this argues for more oversight and transparency.

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IT'S OFFICIAL: The Initial Government Spying Report About Google Was Wrong

Henry Blodget — Wed, 12 Jun 2013 14:55:00 GMT

The initial reports about the National Security Agency's Internet data-collection program, PRISM, said that the government was "tapping directly into the central servers" of Google, Facebook, and other massive Internet companies to gather information and spy on users.

This was a shocking claim, and the companies immediately denied it.

The denials led to privacy fanatics, conspiracy theorists, and some journalists accusing the companies of lying--or at least "parsing" their denials so carefully that the claim might still be true.

The denials also, however, led to one of the publications that broke the story--the Washington Post--changing its story.

And now, for the first time, according to Amir Efrati of the Wall Street Journal, Google has explained exactly how it fulfills government data requests (all of which require court orders and attorney approval):

1. Google sends the government an electronic file via secure File Transfer Protocol (a standard way of sending stuff over the Internet.)

2. Google prints the data out on paper and sends it to the government in boxes.

Neither of those methods involve the government having "direct access" to Google's servers.

The government has apparently asked Google whether it can install data-receiving equipment on Google's premises (another claim made by the National Security Agency document that was the source of the "direct access" claim) or install government software on Google's computers.

Google has said "no."

Yes, it is still conceivable that the government has illegally hacked into Google's systems and is stealing user data.

But that's not what the National Security Agency presentation that was the source for the "direct access" report claimed. The NSA presentation strongly implied that companies like Google were participating in the PRISM program voluntarily.

This new information should finally end the contention that the government has "direct access" to Google's servers or is "directly tapping into" Google's servers.

Facebook, Yahoo, and other companies named in the original spying report have also flatly denied giving the government access to their servers.

So unless you believe that all of these companies are still flat-out lying and/or that the government is illegally breaking into their systems, we can finally put this "direct access" claim to bed.

(Whether the government is "intercepting" communications sent over Google, Facebook, and other systems by tapping into Internet gateways is another question. Based on some other reports and leaked data, it seems that the government might well be doing this. But to be fair to the big companies that were just implicated in the initial spying reports, this "interception" does not appear to be happening in their servers.)

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FORMER GOVERNMENT AGENT: Edward Snowden Is 'A Self-Indulgent Douche'

Henry Blodget — Tue, 11 Jun 2013 16:48:00 GMT

Earlier, we invited folks at the National Security Agency and other government agencies to share their side of the spying story.

Are they all power-hungry megalomaniacs who use their "panopticon" spying machine to destroy privacy and trample all over the Constitution, as 29-year-old leaker Edward Snowden suggests?

Or, like most professionals, do most of them try hard, respect other people, and do the best job they can?

We've already gotten some interesting responses, and we look forward to getting more in the coming days.

For now, here's the perspective of a reader who says he is a former Secret Service agent. He's not privvy to the goings-on inside today's turbocharged National Security Agency, but he has an interesting view of the general situation:

I am a former US Secret Service agent and was previously exposed to many capabilities of our government. While I absolutely believe all communication is accessible, I also know that 99.9% of intel and law enforcement personnel are for Americans not against Americans.

Privacy and our "special" rights as Americans are very well understood, and there is an intense underpinning to protecting those rights across the board.

Now, did I see instances of abuse of power by certain individuals? I would say yes. However, America first is how I like to think about it, and that's how I think 99.9% of government intel types think about it.

As far as this Booz Allen contractor is concerned, I think he's a self-indulgent douche. I don't think, based on what I know, he is for America, and he is certainly not a "hero". I would put him in the traitor category.

Also, I can paint you a profile of what is going on here if it helps.

US intel agency contracts with what may as well be a private sector intel agency. They pluck some kid in his 20s off a farm (or some variation like that) and expose him to the fact that our government engages in well, spying. What a shock!!! The same confused lost soul "looks into it more" and is further shocked that our government is spying - ALL THE TIME - and uses technology to do so. Another big shock!!! Same kid lost in his 20s is "compelled to tell everyone" how bad everything is then flees like a coward to [Hong Kong]. That is what is going on here. To extend this conversation to "the US gov" is spying on all Americans is a grotesque mischaracterization, if not total sensationalized version, of what actually happens.

Do you work for the NSA or another "secret" government agency? Please let us know your thoughts on this. (hblodget@businessinsider.com). We'll keep everything anonymous!

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DEAR RESPONSIBLE NSA PROFESSIONALS: We've Heard From A Disgruntled Idealist — Now Let's Hear From You!

Henry Blodget — Tue, 11 Jun 2013 14:46:00 GMT

Opinions vary about the 29-year-old government contractor who leaked national security secrets and accused the government of building a Big Brother "surveillance state" that records nearly all human communications and tramples all over basic privacy rights.

Some people think this contractor, Edward Snowden, is a hero.

Other people think he's a traitor.

Other people, including me, have yet to make up their minds.

But Edward Snowden, wherever he is, has had his say.

So now it's time to hear from some of the professionals who work for the organization that Snowden violated his professional duty, broke the law, and, in the eyes of many, betrayed his country to rat on.

Is the National Security Agency really a horrible Big Brother "panopticon" organization that has become obsessed only with increasing its own power?

Have all the people who work at the National Security Agency sold their souls to the devil and gotten drunk on the dream of electronic omnipotence?

Do you folks regularly trample all over the Constitution?

Or is Edward Snowden basically a "grandiose narcissist," as the legal writer Jeff Toobin called him yesterday -- a naive young man who unfairly smeared hundreds of thousands of good people who are devoting their professional lives to protecting America?

Feel free to send me your side of the story any time at hblodget@businessinsider.com.

Or, if you're scared to use the electronic communications that you all are supposedly recording all of, just drop a big fat package of documents in the mail to 257 Park Avenue South, NY NY 10010.

America looks forward to hearing your side of this!

______

ADDENDUM:

While we're having this conversation, there are a few questions I would specifically love to hear your answers to:

Can a 29 year-old contractor really "wiretap anyone" from his desk--from my accountant, to a Federal judge, to the President--as Snowden said?
Do you really record "the vast majority of human communications"? (If so, how do you use these recordings?)
Is the FISA court that approves your activities just a toothless rubber-stamp organization, or do they help keep you honest?
Would your friends be appalled if they knew what you do and what you know about them?
Occasionally, late at night, when you're alone, do you have misgivings about what you do? Or do you really believe you're helping the country and keeping people safe?

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Just Curious ... Why Is Everyone Totally Okay With The Government Spying On 'Foreigners?'

Henry Blodget — Tue, 11 Jun 2013 13:38:00 GMT

One bizarre aspect of this new debate about the National Security Agency's surveillance programs is that everyone only seems to be concerned about secret spying on Americans.

When the first allegations about NSA privacy abuses came out, the NSA and White House rushed to reassure everyone:

Yes, the surveillance program exists, but it only spies on foreigners.

And for a day or two, that actually appeared to satisfy everyone. Oh, we're only recording, tracking, and analyzing the communications of foreigners? Well, okay then. We just wanted be sure that the privacy abuses and Big Brother stuff wasn't being used on Americans.

Then, of course, someone revealed that the NSA programs also gather data on Americans and everyone went insane about privacy violations again.

In other words, Americans seem to be fine about any kind of U.S. government spying as long as it's focused on "foreigners." They just go crazy when the same tactics are used on Americans.

That's odd. And a bit disturbing.

Because most people in the world happen to "foreigners." And most of these foreigners are as non-violent, law-abiding, and deserving of basic privacy rights and due process as most Americans.

Some of these "foreigners," in fact, are friends, family, colleagues, and customers of Americans. And most of the billions of users of Facebook, Google, Yahoo, and other major communications service providers whose communications the NSA is "intercepting" are foreigners.

There about ~7 billion "foreigners" in the world, in fact, and the U.S.'s Foreign Intelligence Surveillance Act apparently gives the U.S. government complete freedom to spy on all them.

If all ~7 billion "foreigners" in the world were likely to be potential terrorists, and the 300 million Americans were not potential terrorists, this logic might make sense.

But as recent events in Boston have shown, Americans can also be potential terrorists.

These "foreigners," moreover, also constitute the vast majority of the users and customers of Google, Facebook, Yahoo, and other American tech companies.

So the idea that these companies would voluntarily and happily allow the U.S. government to spy willy nilly on these "foreigners" is both outrageous and offensive.

What this renewed focus on U.S. government intelligence programs has revealed, in other words, is not just the concern that these surveillance programs may now be going too far. It is that some Americans still don't appear to appreciate that we now live in a highly globalized world.

In this globalized world, the rules and laws of one country increasingly need to be considered in a broader context. And assurances that massive American spying programs are only focused on "foreigners" won't come as much comfort to U.S. allies around the world, not to mention the billions of customers who have helped make some of our companies the most powerful and richest on the planet.

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POLL: Which Apple iOS Design Do You Like Better — The Old One Or The New One?

Henry Blodget — Mon, 10 Jun 2013 19:22:00 GMT

Apple has redesigned the look and feel of its mobile operating system for iPhones and iPads, iOS.

The new version uses a simpler "flat" design, without the fancy three-dimensionality of the old one. And as Apple had a lot of fun pointing out in its conference presentation, some of the old skeumorphic (physical-world-like) icon designs have been replaced by modern digital ones.

So, which design do you like better?

Here are some of the old icons:

Here are some of the new ones:

VOTE:

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Apple's Huge Developer Conference Explained In One Photo

Henry Blodget — Mon, 10 Jun 2013 17:34:00 GMT

Dan Ackerman just tweeted the following photo from Apple's big developer conference, along with the following caption:

WWDC explained in one photo.

Hunter Walk from Google quickly jumped in and said that the photo explains all of tech.

Either way, a welcome reversal for women who have had to suffer through longer restroom lines since the dawn of public bathrooms...

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Hey, Obama, Are You Going To Respond To This Claim That You're Recording 'Nearly All Human Communications'?

Henry Blodget — Mon, 10 Jun 2013 16:03:00 GMT

NSA leaker Edward Snowden, who just checked out of his hotel in Hong Kong and left for parts unknown, made a number of startling claims over the weekend.

Chief among these was the claim that "the vast majority of human communications are automatically ingested [by the National Security Agency]."

We're going to assume that what Snowden means by "ingested" is "copied" or otherwise logged and recorded.

So the vast majority of human communications are automatically recorded by the U.S. government?

That's a pretty startling claim.

It has been nearly 24 hours since Snowden made that claim.

So is the President of the United States, or at least the White House or the NSA, going to respond to that claim?

If so, when?

Are all our communications being recorded? If so, by whom? How? Is this recording legal under current laws? Where are the recordings stored? How long are they kept? Who has access to them? How can they be used?

Inquiring minds want to know...

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'The Woz' Arrives At Apple's Huge Developer Conference -- On A Segway [PICTURE]

Henry Blodget — Mon, 10 Jun 2013 14:56:00 GMT

The crowds are arriving at Apple's Worldwide Developers Conference. The fun starts at 1PM Eastern time. We'll be covering it live here.

In the meantime, Bloomberg's Jon Erlichman (follow here) tweeted this amusing picture of Apple co-founder Steve Wozniak rolling up to the conference on his Segway.

The Woz is long gone from Apple. But he's still the company's biggest fan.

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Edward Snowden Is A Media Genius — And He Just Made A Brilliant PR Move

Henry Blodget — Mon, 10 Jun 2013 14:41:00 GMT

Whatever else you think about NSA-leaker Edward Snowden, you have to admit this:

The man is a public relations genius.

When he decided to leak top-secret National Security Agency documents to the media, Snowden knew he was taking a big risk of spending a good chunk of time in prison — especially in an era in which an Administration is aggressively prosecuting leakers.

But Snowden felt passionately enough about his cause that he was willing to risk this.

And Snowden also appears to have been smart enough to realize that a leak of this magnitude would likely lead to his being "outed" at some point, regardless of how careful he was.

And he was also presumably smart enough to realize that if his identity was ever discovered, the process of being introduced to the public as a "traitor" and "felon" (presumably in cuffs, during a perp walk) would likely color how the public perceived him and his actions. Snowden would likely have been forced to make any public statements from a jail cell, in a jumpsuit, with nervous attorneys sweating every word, so he would not likely have been able to say much if anything to turn this public perception around. And he certainly would not have been able to make an extensive, careful case for why he did why he did, and what the government is doing, with so much time and control.

In other words, Snowden appears to have been smart enough to realize that, if he waited around to be found out, he would be treated like Bradley Manning — the Army private who was hustled out of public view and thrown in solitary confinement for months after being charged with leaking documents to Wikileaks.

So instead of living in fear and awaiting that fate, Snowden took matters into his own hands.

He went public on his own terms.

He presented himself to the world as a courageous, well-intentioned, brave, and principled young man.

He placed an image in everyone's mind of Edward Snowden as well-dressed, articulate, and free, a man in full control, a David standing up to Goliath, a man ready to accept the consequences of his actions. And he got a chance to make his full case against the government before the government got to dictate the terms of the engagement or say anything in response.

And, at least so far, this decision worked!

Snowden is already being hailed as a "national hero" in many quarters.

A petition to "pardon" Snowden before he has even been apprehended and charged with anything has already received nearly 10,000 signatures. In a poll we have conducted this morning, fully two-thirds of Business Insider readers view Snowden as a "hero." Only 15%, meanwhile, view him as a traitor. (~20% haven't made up their minds.)

That's not bad for a 29 year-old contractor who easily could be painted as a selfish traitor and appears to be responsible for one of the biggest U.S. intelligence breaches in history.

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Tech Industry Sources Dispute Accuracy Of Spying Reports

Henry Blodget — Mon, 10 Jun 2013 13:29:00 GMT

News organizations and, possibly, the National Security Agency leaker Edward Snowden himself, are misinterpreting a key concept in a leaked NSA presentation, senior tech industry sources say.

One of these sources argues that this misunderstanding calls into question whether Snowden really understands some of the other assertions he is making about U.S. intelligence activities.

Late last week, two major newspapers reported that the National Security Agency has "direct access" to the central servers of the world's biggest Internet companies, including Google and Facebook.

With this access, the papers implied, the U.S. government can snoop in real-time on the digital communications of hundreds of millions of people worldwide.

After these reports appeared, the companies named in the reports issued vehement, explicit denials about the "direct access" assertion. And when skeptics suggested that the companies were just parsing their words carefully, the companies issued even more explicit and strenuous denials.

Google, for example, said the government has no access to its servers, no "back door" into the systems, and no API (application programming interface) through which the government could spy on its users.

Facebook said basically the same thing, adding that the government had also not requested vast amounts of "bulk data" like the startling request that was made of Verizon.

All the companies confirmed that they do provide data to the government in response to specific court orders — once the requests have been reviewed by the companies' lawyers. And after a batch of data is delivered to the government (often, presumably, electronically), the government can obviously query the data however the government likes.

But senior tech industry sources say that the assertion that the government has "direct access" to these companies' servers — and, with it, unlimited real-time snooping capabilities — is flat-out wrong.

So it's worth reviewing where this claim of "direct access" to the companies' servers came from. And it's worth asking how much, if at all, this apparent misunderstanding calls into question some of the other claims made by the 29 year-old NSA leaker, Edward Snowden.

The assertion by The Guardian and The Washington Post that the NSA and FBI had "direct access" to the servers of Google, Facebook, and other companies came from the following slide (published here by The Guardian), which is from a National Security Agency presentation obtained by the papers. The presentation, the papers have now revealed, was provided by Snowden, who is now holed up in a hotel in Hong Kong.

As you can see, this slide suggests that the government is collecting data in two ways: first, from the "fiber cables" that the data flows through as it travels from the sender to the recipient (a.k.a., the Internet); second, in the "PRISM" program, from the companies themselves.

Specifically, the green area in the bottom of the slide states that the PRISM collection comes "directly from the servers of [nine] U.S. Service Providers."

According to many of the technology companies named in that sentence, however, as well as the senior tech industry sources that we have spoken to, the "directly from the servers" wording is either being misinterpreted or is just plain wrong.

It is true that any data provided by Google, Facebook, et al, to government investigators does come originally from some "servers" of these companies — because that's where the data is sent, received, and/or stored.

Importantly, however, the government does not have access to these servers.

The government gets the data only after the companies' lawyers approve the government's request for the data and the companies then either send the data to the government or put the data somewhere the government can access it (by storing it on another server, for example, to which the government is granted access. This is a common method of sharing data these days, although according to a New York Times report, the companies are not using a server on their premises to share data with the government).

If the government were making massive data requests of these companies — for example, if the government were demanding to see "all data generated by all Facebook users in the years 2012 and 2013" — then this might be a distinction without a difference. But according to the companies and our sources, the requests are far narrower than that.

(One source estimated that the number of actual people covered by data requests at one big technology company over the past few years was in the "thousands," not the millions, much less the hundreds of millions. The source did not have exact numbers, however.)

The bottom line is that news organizations and, possibly, NSA leaker Edward Snowden, appear to fundamentally misunderstand the nature of how the big tech companies provide data to the government.

And given that misunderstanding, it's worth asking what else Snowden might not understand.

In his interview with The Guardian, Snowden made two claims that were particularly startling:

First, that he, Snowden, a 29 year-old contractor, could easily "wiretap" anyone in the United States including "you or your accountant, to a federal judge, to even the President."
Second, that the U.S. government is secretly recording nearly all human communications (not just American communications — human communications).

Snowden did not elaborate on exactly what he meant by these claims. (Would this "wiretapping" be legal? Could Snowden actually initiate the wiretap or did he just have the authority to order it? Is the government recording the contents of communications or just records of communications? Etc.) But at first glance, the claims seem far-fetched.

And given that Snowden appears to misunderstand how the government gathers data from big technology companies — or is passing on a presentation that misrepresents this — it seems possible that he might be misunderstanding these broader assertions, too.

In any event, the first order of business for those who are interested in what Snowden has to say (e.g., pretty much everyone) is to get more detail on what, exactly, he is claiming the government can and can't do and is and isn't doing. And then the second step will be to corroborate his assertions with other intelligence sources.

Snowden's leak appears to be one of the most significant intelligence leaks in history. If nothing else, it has triggered a public debate about how much information the government is and should be collecting and how it is using that information. Although public awareness of U.S. data gathering might make the program less effective as a national security tool, it appears to be high time that the public understands what the government is and isn't doing.

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National Security Leaker Edward Snowden Is Running Out Of Money To Pay His Hotel Bill

Henry Blodget — Mon, 10 Jun 2013 09:48:00 GMT

The man responsible for one of the biggest U.S. intelligence leaks in history, 29-year old Edward Snowden, has been staying in a room in a Hong Kong hotel for the past three weeks.

And now, says CNN, he is running out of money.

One of the two Guardian reporters who broke the story with Snowden, Ewen MacAskill, says the cost of the hotel is beginning to max out Snowden's credit card.

The Guardian reporters, Glenn Greenwald and MacAskill, who are also in Hong Kong, declined to reveal what hotel Snowden is staying in.

If the U.S. intelligence apparatus is anything like as powerful as what Snowden describes, however, it probably won't be long until he is located. And at that point, a hotel bill will probably be the least of Snowden's concerns.

(And perhaps the Guardian will pick up the tab!)

The results of an early Business Insider reader poll suggest that Snowden has won the hearts and minds of people worldwide. Two-thirds of those who responded to the poll think Snowden is a "hero." Only one third think he is a "traitor" or "haven't made up their minds."

Vote in the poll here >

(via Bill Bishop)

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What Do You Think Of National Security Leaker Edward Snowden? [POLL]

Henry Blodget — Mon, 10 Jun 2013 09:14:00 GMT

Early opinions vary on Edward Snowden, the former spy who leaked confidential national security documents and accused the U.S. of building an intelligence machine that records nearly all human communications.

Some people think Snowden is a traitor.

Some people think he's a hero.

Some people are reserving judgment until they learn more.

What do you think?

Vote below...

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Petition To Pardon Edward Snowden As A 'National Hero' Nears 10,000 Signatures

Henry Blodget — Mon, 10 Jun 2013 08:58:00 GMT

Early opinions vary on Edward Snowden, the former spy who just leaked confidential national security documents and accused the U.S. of building an intelligence machine that records nearly all human communications.

Some people think Snowden is a traitor.

Some people think he's a hero.

Some people are reserving judgment until they learn more.

Those who think Snowden is a traitor and criminal are gearing up to arrest him.

And those who think he's a hero are petitioning the White House to pardon him.

As of this morning, a petition to "Pardon Edward Snowden" has received nearly 8,000 signatures.

To put that in context, it's about 0.0004% of Americans over the age of 18.

Click through for the actual petition >

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It Seems A Bit Early To Call Edward Snowden A 'Hero'

Henry Blodget — Sun, 09 Jun 2013 23:50:00 GMT

The fact that former National Security Agency employee Edward Snowden decided to go public with his grievances against the U.S. government is certainly brave and bold.

People can and will accuse Snowden of many things. But no one will ever accuse him of not having the guts to stand up for what he believes.

Whether or not Snowden should be regarded as a "hero" for exposing what he believes is horrible intelligence gathering abuse by the U.S. government, however--as some are already suggesting he should be--remains to be seen.

Snowden has certainly made some startling claims about the scope of the U.S. intelligence and surveillance programs.

Most notably, Snowden claims that, as a 29 year-old security contractor, he had both the legal authority and the technological ability to "wiretap anyone — from you or your accountant, to a federal judge, to even the President."

If that's true, that is indeed very startling.

Snowden also claims that the National Security Agency now intercepts and records almost all global communications, and that these recorded communications can be easily accessed:

"...the vast majority of human communications are automatically ingested [by the NSA] without targeting. If I wanted to see your emails or your wife's phone, all I have to do is use intercepts. I can get your emails, passwords, phone records, credit cards."

Now, the NSA--or FBI, DOJ, or even your local police department--have always been able to get access to all of this information for U.S. citizens, provided they have a warrant from a judge allowing them to do so and provided you or your service providers have retained these records. But what seems new, based on Snowden's description, is that the government is now maintaining its own records of all this information and, if I understand Snowden correctly, can now access and use any of it without a warrant.

If that's true, it's certainly worth asking whether we really want the government to be able to do that. It's also worth asking whether the the government really does have the legal authority to do that--or whether it has gone way beyond what the lawmakers intended.

But, I, for one, would like some confirmation that what Snowden is saying is true before I denounce the government.

And some of the other things that Snowden has said have certainly made me wonder whether he isn't just viewing all this from a philosophical perspective that mainstream Americans might consider, well, extreme.

Asked why he decided to leak classified information to the media, for example, Snowden said the following:

"I don't want to live in a society that does these sort of things … I do not want to live in a world where everything I do and say is recorded. That is not something I am willing to support or live under."

Asked whether surveillance might help deter or prevent terrorism, Snowden appeared to suggest that we shouldn't pay so much attention to terrorism:

"We have to decide why terrorism is a new threat. There has always been terrorism. Boston was a criminal act. It was not about surveillance but good, old-fashioned police work. The police are very good at what they do."

Asked whether he sees himself as "another Bradley Manning," the U.S. Army private who sent a boatload of classified U.S. documents to Wikileaks, Snowden expressed nothing but admiration for Manning:

"Manning was a classic whistleblower. He was inspired by the public good."

To address these statements in reverse order...

Bradley Manning may have been "inspired by" his own personal view of the "public good." But, personally, I'm not convinced that what Bradley Manning did was actually good for the public. I don't think it was terrible for the public. And it was certainly interesting to read some of those diplomatic communications. But I didn't see anything in them that made me think they were so important that they were worth Manning violating his professional duty, breaking the law, and risking a lifetime in jail to make them public.

(And, for what it's worth, I do think that some things should be classified.)

I agree that we worry a lot about terrorism relative to many other dangers, but I am also happy that there has not been another 9/11 since 9/11, and I wish the FBI had stopped the deranged Tsarnaev brothers before they allegedly killed four innocent people in Boston and maimed a few dozen others. I understand that the authorities will never be able to eliminate terrorism entirely, but I am glad that they've limited it as much as they have.

And, lastly, although I don't relish the thought of having the government intercept and record all of my communications, I want to find out whether it's actually true that the government is doing this before I freak out about it. Also, because I am not a terrorist, because this country has a well-developed legal system, and because I do not instinctively regard all government employees as evil power-hungry scumbags, I would also like to believe that, even if the government is recording all of my communications, this won't necessarily wreck my life.

All of which is to say...

I'm not yet ready to pronounce Edward Snowden a "hero."

I understand that he means well.

And I understand that he may think he's a hero.

But he hasn't persuaded me of that yet.

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Now That The Truth About Government Internet Spying Is Coming Out, The Hysteria About Tech Cos' Role Should Die Down

Henry Blodget — Sun, 09 Jun 2013 18:17:00 GMT

As the actual details of the government's data collection under its "PRISM" intelligence program are emerging, the hysteria that followed the initial reports is, justifiably, dying down.

Thanks to vehement, explicit denials by America's big technology companies, it is becoming clearer that the government does not, as the initial reports stated, have "direct access" to the central servers of Google, Facebook, Yahoo, et al — access with which the FBI and National Security Agency can spy on any of hundreds of millions of global users any time they feel like it.

Instead, it seems clear that, as in ordinary legal processes, the government frequently requests specific user data from these companies, and, after a legal review, if the companies deem the requests to be lawful, the companies are making the data available to the government.

Based on the companies' statements, as well as many follow-on news reports and our conversations with technology industry sources, the hullabaloo about "direct access" appears to stem from a misunderstanding about what "direct access" actually means. What the companies appear to be doing is delivering electronic data that the government has requested — after the companies review the request to make sure the request is legal. Once the companies have delivered the data, the government can access the data on a server, and query it however the government wants. But this does not mean the government has unfettered "direct access" to the companies' central servers and billions of users, as the initial PRISM reports implied.

Given the volume of the information that the government is collecting, it's certainly reasonable to consider whether American laws are appropriate and whether the necessary checks and balances in place — or whether we are focusing too much on "security" and not enough on "privacy." And, as ever, it's also worth making sure that the government is following the laws.

Importantly, however, these questions have nothing to do with the technology companies. Even the Washington Post has revised its story about government spying and no longer claims that the FBI and NSA are "directly tapping into the central servers" of the big tech companies.* So, as the reality of the process by which the tech companies make legally requested information available to the government becomes clear, the debate should shift to the laws and government behavior.

Is the secret FISA court that approves specific information requests under the Foreign Intelligence Surveillance Act being too permissive in its approvals? Is the government following the law? Should the FISA oversight or laws be changed?

Those questions are worth asking.

But it seems highly misleading to continue to suggest that America's biggest technology companies are secretly in cahoots with government spies, are providing direct access to central servers, and are selling out billions of users worldwide.

* The Post's original story stated as an unqualified fact that Google, Facebook, et al, were allowing the government to "tap directly into the[ir] central servers" to spy on their users. After the story was published and the companies issued immediate and categorical denials, the Post revised its story significantly. Now the "direct access" claim is tied to a government document that some people say is being misinterpreted. And even the Post has now explained that the government is merely receiving electronic deliveries of requested data that the government can then query and analyze (just as the government does in any investigation):

According to a more precise description contained in a classified NSA inspector general’s report, also obtained by The Post, PRISM allows “collection managers [to send] content tasking instructions directly to equipment installed at company-controlled locations,” rather than directly to company servers. The companies cannot see the queries that are sent from the NSA to the systems installed on their premises, according to sources familiar with the PRISM process.

Crucial aspects about the mechanisms of data transfer remain publicly unknown. Several industry officials told The Post that the system pushes requested data from company servers to classified computers at FBI facilities at Quantico. The information is then shared with the NSA or other authorized intelligence agencies.

[Our guess is the Post will soon be further revising that last sentence to clarify that it is not "the system" that pushes the requested data to the FBI servers, but the companies. And that would mirror how any company provides requested data to the government — by sending it to them or putting it on a server where the government can get it.]

According to other reports, such as the one The New York Times filed yesterday, the companies haven't even given the government access to shared delivery servers on their premises.

So, the more details that come out, the more it sounds as though the tech companies are just providing the government with standard electronic delivery of requested data.

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