Why The NSA Must Be Reined In -- For Democracy's Sake

In the wake of the continuing leaks about the NSA's activities, most commentators are understandably still trying to get to grips with the enormity of what has been happening. But John Naughton, professor of the public understanding of technology at the UK's Open University, tackles a very different question on his blog: what is likely to happen in the future, if things carry on as they are?  

On Techdirt.

"I've Never Voted Tory in My Life..."

....but next time I will if this proposal isn’t dropped.

Isn't it interesting how often we're hearing that refrain about ID cards....?

Hypocrisy, Thy Name is Gambling

John Naughton points us to a nicely-written piece by John Lanchester about the way the City - and its global mates - work using derivatives to the tune of $85,000,000,000,000 (sorry, no mistake in that number of zeroes.)

It's a long piece because it's describing something that's complicated - sometimes made intentionally more complicated by the banking industry for the purposes of obfuscation - but at its heart it amounts to a very simple thing: gambling. As Lanchester writes:

The list of individual traders who have lost more than a billion dollars at a time betting on derivatives is not short: Robert Citron of Orange County, Toshihide Iguchi at Daiwa, Yasuo Hamanaka at Sumitomo and Nick Leeson at Barings, just to take examples from the early 1990s. In Leeson’s case in 1995, it was a huge unauthorised position in futures on the Nikkei 225, the main Japanese stock exchange. Leeson had been doubling and redoubling his bets in the belief/hope that the index would rise, and hiding the resulting open position – a gigantic open-ended bet – in a secret account. (Incidentally, Leeson’s big bet was on the Nikkei holding its level above 18,000. At the time of writing, 121/2 years later, the index sits at 15,454 – proof, if it were needed, that when prices go down they can stay that way for a long time.) The loss eventually amounted to £827 million, and destroyed Barings, Britain’s oldest merchant bank.

Got that? These are bets, pure and simple, on the way that things will work out. You can dress them up as you will, you can complexify them as you will, but at bottom they are simply gambles.

Now, add that fact to the distasteful sight of the US - a country that probably uses derivatives more than any other, and also probably makes more money from derivatives than any other, trying to stop online gambling with non-US companies - for example by buying off pathetically greedy entities like the EU:

The United States has reached a deal with the European Union, Japan and Canada to keep its Internet gambling market closed to foreign companies, but is continuing talks with India, Antigua and Barbuda, Macau and Costa Rica, U.S. trade officials said on Monday.

Since I'm no expert on derivatives, I don't know the extent to which you can buy them online from anyone anywhere, but I would be utterly astonished if you couldn't (and this suggests you can.) So you have a fundamental cognitive dissonance between the extraordinary use of derivatives worldwide, and the US attempt to ban online gambling though non-US companies.

Maybe the idea is that only the ultra-rich should be allowed to gamble wherever they want.