JOB CREATION - The Reality of the Current Situation

20 Ordinary Americans Take About Their Economic Despair 09-24-13 Michael Snyder of The Economic Collapse blog via ZH

Yesterday we highlighted the plight of Tom Palome and his cohorts as they face a need to work well into once-thought-retirement age. However, there are hundreds of formerly prosperous communities all over America that are being steadily transformed into rotting, decaying hellholes. The good paying middle class jobs that once supported those communities are long gone, and they have been replaced with low paying service jobs if they have been replaced at all. When you visit those communities, it is almost as if all of the hope has been sucked right out of the air. The following are 20 quotes from ordinary Americans about the economic despair that is rapidly growing around them.

Via Michael Snyder of The Economic Collapse blog,

There are hundreds of formerly prosperous communities all over America that are being steadily transformed into rotting, decaying hellholes.  The good paying middle class jobs that once supported those communities are long gone, and they have been replaced with low paying service jobs if they have been replaced at all.  When you visit those communities, it is almost as if all of the hope has been sucked right out of the air.  It can be absolutely heartbreaking to look into the hollow eyes of someone that has totally given in to despair, but unfortunately the number of Americans that are giving up on the economy continues to grow. 

Today, the labor participation rate is the lowest that it has been in 35 years, and more than 100 million Americans are enrolled in at least one welfare program.  It is easy to say that they should just "get a job", but as I have written about repeatedly, our economy simply is not producing enough jobs for everyone anymore.  The percentage of working age Americans with a job has remained at the same level that it was at during the worst days of the last recession, and meanwhile the quality of our jobs has continued to steadily decline.  Median household income has fallen for five years in a row, but the cost of living continues to rise rapidly.  The middle class is being systematically shredded, and poverty is growing at an alarming rate.  The U.S. economy has been in decline for a long time, and the really bad news is that it appears that this decline is about to accelerate.

We are a nation that consumes far more wealth than we produce.  We are a nation that buys far more from the rest of the world than they buy from us.  We are a nation that has a "buy now, pay later" mentality.

As a nation, we have accumulated the largest mountain of debt in the history of the world.  40 years ago, the total amount of debt in our system (government, business and consumer) was about 2 trillion dollars.  Today, it is more than 56 trillion dollars.

The consequences of decades of incredibly foolish decisions are starting to catch up with us, and it is those at the bottom of the food chain that will suffer the most.

I could spend the rest of this article quoting 30 or 40 more statistics that show how bad things are, but today I wanted to do something different.  Today, I wanted to share some quotes from some of my readers about what they are seeing where they live.  The following are 20 quotes from ordinary Americans about the economic despair that is rapidly growing like a cancer all around us...

#1 David:

"Yes, the American economy is in the pits. I know five languages, have three degrees (including two graduate degrees), and have lived overseas for 16 years and I still can't find a job in the USA. Everything is broken in America. Maybe I should give up my American citizenship."

#2 Zach:

"I've been struggling since I finished college in the summer of 2010. My dream is to work in the courts, law enforcement but it's almost impossible to get a call back for an interview. I interviewed with Garland, Texas PD for a position in the city jail and I made the final 30 of 300 applicants that applied for the 3 positions."

#3 Akitawoman:

"I have two Master's degrees, am 61 years old and earning $10 per hour. What does that say about the current economy?"

#4 Cincinnati Dave:

"I work for one of the banks mentioned in your article. I was in mortgages. I saw all of this coming, so several months ago I asked to get into another area of the bank and fortunately, for me, they granted by request. A lot of people are losing their jobs and there is really no prospects out there for anything else whereby the same kind of money could be made. I will make nothing near what I had been earning but am at the least grateful to be employed. This is all so sad to watch happen."

#5 Iceman:

"I used to work for WF processing mortgages. The week that the rates went up, I was out of work, not one extra week of work."

#6 Tim:

"The U.S. economy is producing mostly part-time, low-wage jobs. These jobs barely pay enough to put food on the table."

#7 K:

"What I am aware of, is every person I know, who had to switch jobs in the last five years took a pay cut. The smallest cut among my friends was 10%, the average was closer to 18%. No we are heading down a bad road, and we are past the point of no return."

#8 Makati:

"After spending most of my life in the middle class, I now consider myself lower class due to age and income. Nothing wrong with that. I am still able to provide myself with what I need and some of my 'wants'. I am like most retirees today."

#9 Mondobeyondo:

"As many of you already know (but maybe some new members of this blog don't) - I live in Phoenix, Arizona. Where you live here, determines (to a great extent) your economic well being. Those in the "East Valley" - Chandler, Gilbert, Scottsdale, etc - have the jobs, the opportunities and the transportation. Those in the wealthier areas of the "West Valley" also have these benefits.

The remainder - those who live in the older west side of town, and the south side of town - are mainly forgotten and left to struggle. Many are hard working citizens who just want a chance. Unfortunately, chance costs money, in the view of many people, and as far as the municipal government is concerned, there's no money for us. It's cheaper to let them live in a tent in the park, where the cops at least have an excuse to evict them."

#10 2Gary2:

"We are no longer the land of opportunity where anyone can make it."

#11 GOM:

"There is no middle class here in the Florida Panhandle. Only folks who have money are the retired and they hate everyone. They own all the antique stores [big business] and most thriving businesses and restuarants. Military is big here, they spend every dime they have on stupid stuff and taxis. Tourist are way down since the spill. Now for the good news. A major food chain here is going out of business [Food World] Another is losing 20k a month to theft. Every other property it seems is up for sale. There are tons of empty real estate [store fronts] There are thrift stores opening everywhere. People are selling goods on the streets, only to be run off by the cops. Crime is getting out of hand. Most don't go out after dark. Police are beating up the homeless at the beaches. Panhandling now is mainly younger people. Where did all the older ones go?"

#12 Rodster:

"In my area which is SW Florida, it's been getting tighter for my customers so on a case by case basis I lower my price when they need auto repairs. I still find road signs advertising homes for sale (cash only). Many are advertised as foreclosed.

I've started seeing people living out of their cars. It's not a daily occurrence but I have been noticing it."

#13 Devery:

I have been looking after the homeless now for 4 years. Last winter I had an encounter where I was told that I could not hand out blankets and sleeping bags in the dead of winter and that I would be arrested for trespassing if "me and my friends" didn't move along.

So, I adopted the policy that I would pull up next to them, have them get in the car and we would go for a drive. I would find a place to pull over and give them what they needed then I would drop them off in a different place.

#14 Robert:

"Around where I live in the SE, things seem ok but I live in a university town. Go to some of the surrounding small towns and it is desolate. Car dealerships closed. Entire streets with abandoned stores. The only activity is a one clerk post office. I know people in our church who are a paycheck away from going over the edge or going over due to a spouse dying and losing one of their social security checks. I see grim. More homeless. A local church is feeding many more including some folks living out of their cars---lots of children. Mostly minimum wage jobs in the area. If it were not for the university and its 34,000 students, this place would look as bad as the smaller communities."

#15 TN Gal:

"Here in southeast TN we have jobs, mostly part-time or low wage. Our problem these days are so many people dependent on government programs no one wants to work. They do better on programs than working partying and paying for insurance. Housing still very depressed. Seeing more homeless around and local churches straining to provide food. Crime is up and drugs, which were down, are coming back with a vengeance. Middle class here are senior citizens on SS, younger retirees not the older ones. Older ones seem to be struggling. Sad."

#16 Deb:

Michael, I live in North Central Illinois. About 60 miles southeast of Chicago. The town we live in has about 8,000 in it. Very "middle class" farm community. Unemployment is high and so is underemployment. We know many people living off 2 part time jobs. That seems to be the norm around here. Or people taking jobs that they would never of considered in the past, just to get by. My son used to work for CAT in Aurora, but was "let go" in order to bring in new workers at a lower pay scale. It took him over a year(which really isn't bad) to find a part time job with 3M.

#17 Susan:

"Drive around Los Angeles at 3:00 AM any day and you will see the devastating and pervasive homelessness from 8 to 80 year olds.  And the massage parlors and hookers on the streets of used to be 'high-end' neighborhoods are exploding. No other way to make a living."

#18 XSANDIEGOCA:

"A couple of years ago it was reported 9K people a night slept in their cars here in San Diego County. Special car parks are set up in some church parking lots. The cops look the other way. Wonder what the figure is now?"

#19 Jimbo:

"My own viewpoint is that a collapse of the current economic system is inevitable and imminent."

#20 El Pollo de Oro:

"During a conversation on prepping, someone recently said to me, 'If things get half as bad as these preppers think they will, I don't want to be alive.' So, how bad will things will get? Real unemployment is already at Great Depression levels (John Williams' Shadow Statistics contradicts the BLS' bogus figures), but when this depression deepens, I think we'll be looking at 50% or 60% unemployment easily. Much worse than the 1930s. It will be absolute hell for millions of Americans, and when the money stops flowing down to the man on the street, the blood will flow in the streets (Gerald Celente). Lots of it."

CURRENCIES - Driver$ & Trigger$

US$, YEN & EURO CROSS: With Fed’s tapering of its QE programme postponed – now not likely until December in most analysts' view, the FX market has made a turn for a weaker USD. Expect a 6 - 12M USD uptrend. Indeed, we see the Fed surprise as mainly bringing out a level shift in USD crosses, merely postponing an eventual USD uptrend a few months but not reducing its pace materially. Near term USD risks are tilted to the downside.

KEY RISKS: Resulting in more EUR/USD upside:

• US data start to weaken > Fed delays tapering beyond December and/or makes the tapering pace even more gradual
• Eurozone excess liquidity continues to drop at the currently rapid pace > ECB fails to react with a new LTRO > Rate rises
• Eurozone peripheral spreads tighten more than currently projected as the search for yield is reignited > Capital to eurozone

EMERGING MARKETS: In an environment that has seen the emerging - markets (EM) sell - off calm down and which is now set to get another boost from Fed expanding its balance - sheet at a record pace still, carry currencies could receive a temporary boost. We stress, however, that longer - term challenges for EM and commodity currencies remain in place. The Scandies are similarly expected to benefit from improved risk sentiment in the near term)

EXPECTATIONS: On a 1 - 3M horizon the delayed tapering provides a rather favourable backdrop for risk assets. With most markets having positioned for September tapering in recent months there is likely still room for some USD longs to be wiped out, this coupled with the fact that any geopolitical support to USD has waned,=.

In 3M we will be just beyond the December FOMC meeting means a Fed has laid out tapering plan should induce a shift back in focus to the fact that the Fed will still be a first - mover on reining in easing among major central banks as US outperformance is set become a focal point. Furthermore, this should pave the way for a move in relative rates weighing on EUR.

CURRENCY PROJECTIONS

Across QE sensitive assets, it seems clear which is losing faith in the Fed's ability (or perhaps the reality of lower growth is repricing equities even as Taper remains off the table).

Note the correlation against the US$ since the FOMC Announcement.

• Bittersweet victory Merkel’s real difficulties start now FT 09-23-13
• Merkel begins hunt for coalition partners FT
• Merkel’s almost total political triumph FT
• Election Triumph:Merkel Victorious But Faces Tough Talks Spiegel
• Merkel Wins Big in German Election WSJ Angela Merkel's conservatives won a resounding victory in Germany's elections, despite a surge by an anti-euro party that helped push her junior coalition partner out of parliament.

Merkel Wins Federal Election But Coalition Partner Below Bundestag Threshold: Final Outcome Too Close To Call 09-22-13 Zero Hedge

While the outcome of the election from the perspective of "the grand coalition" is still too close to call, Exit polls make it clear that Merkels CDU/CSU party has won the election with 42.5% of the vote. However, there are some very interesting results that could be a problem for Europe's 'program-based' nations:

• GERMAN AFD TAKES 4.8% IN FEDERAL ELECTION, ZDF EXIT POLL SHOWS
• GERMAN FDP TAKES 4.5% IN FEDERAL ELECTION, ZDF EXIT POLL SHOWS

So the anti-Euro party has more votes (nearly the 5% required to enter the Bundestag) than Merkel's current coalition partner FDP party which creates major uncertainty over the forming of a coalition (which took 3 weeks in 2005) - which as we noted seemed to priced into Greek stocks on Friday. The pirate party is projected to have 2.5% of the vote. If the anti-Euro AfD enters the parliaments, a "Grand Coalition" appears inevitable. However, if it does not cross the 5% threshold, Merkel may end up with an absolute majority in the Bundestag and will not nead a coalition partner.

The results so far at 1810 German time...

MONETARY EXPANSION - Extremely Difficult to Stop Once Started

Gold And Monetary Inflation Prospects 09-22-13 Alasdair Macleod via GoldMoney.com

VENEZUELA - Shortages & Hyperinflation

Venezuela Seizes Toilet Paper Factory Amid Fears Of US Sabotage 09-22-13 Zero Hedge

The Venezuelan government is in a bind. They realize that 'the people' will stand-by idly as the nation's currency is devalued, as inflation soars, and blackouts continue as food shortages grow...(and the stock market soars) but take away a critical personal care item and the riots will begin. As Yahoo Maktoob reports, Venezuela's leftist government said Saturday it temporarily seized a major toilet paper factory hoping that it can end troublesome shortages of the staple personal care item. "The temporary occupation of [the toilet-paper manufacturing plant] is aimed at verifying that toilet paper industry production, marketing and distribution" are all in line with state policies, Vice President Jorge Arreaza said on Twitter, without indicating how long the takeover would last. This action follows 'nationalization' of large farms amid President Maduro's claims that the White House is plotting the "collapse" of his government next month by sabotaging food, electricity and fuel supplies.

But, of course as we noted previously, none of that matters - as the Venezuelan stock market is surging (which, if American talking heads are to be believed judging from thei reaction to US equity markets) must mean the country is doing great... The Caracas Stock Index is +270% YTD...

Via Yahoo Maktoob,

Venezuela's leftist government said Saturday it temporarily seized a major toilet paper factory hoping that it can end troublesome shortages of the staple personal care item.

"The temporary occupation of Manpa (Manufactora de Papel) is aimed at verifying that toilet paper industry production, marketing and distribution" are all in line with state policies, Vice President Jorge Arreaza said on Twitter, without indicating how long the takeover would last.

He said the decision had been taken by an economic panel sworn in last week by President Nicolas Maduro, a close ally of Communist-ruled Cuba.

OPEC member Venezuela has vast crude oil resources, sitting atop the world's largest proven reserves.

But efforts to centralize its economy like Havana have seen the country reach an inflation rate of 32.9 percent, and a toilet paper shortage rate of 20 percent, according to government data.

Even hospitals have reported food shortages, while citizens routinely deal with shortages of coffee, flour, sugar or personal care basics like toilet paper.

Venezuela imports half the food it consumes, and the government also has been taking over large farms hoping it can boost domestic production and supply.

Maduro last week claimed the White House is plotting the "collapse" of his government next month by sabotaging food, electricity and fuel supplies.

MONETARY POLICY - Below the Event Horizon

The Fed's "Renormalization" Shock (All 600 bps Of It) 09-21-13 Barclays via ZH

Bernanke's actions this week make it very clear that between "financial conditions" and the fragility of growth, the US is incapable of surviving without ZIRP and QE (for now). As Barclays notes, ultimately, normalisation should proceed according to a timeline that does not threaten recovery, yet will result in a neutral monetary policy by the time the economy reaches full capacity and the desired inflation rate. However, there are many uncertainties along this path.

Chairman Bernanke has said it might take "two or three years after 2016" to reach a 4% fed funds rate (the FOMC’s ‘longer-run’ expectation), but, as the disturbing chart below highlights, even an adjustment to 2.0% (the median FOMC expectation for December 2016) entails formidable adjustment of monetary policy once allowance is made for the tapering of QE. Given we now know that 'tapering is tightening', the implicit rate hike from a reduction in QE will mean a 600bps tightening in financial conditions. Do you believe in miracles?

There is a wide variation of econometric estimates of the impact of LSAP, but one rule of thumb is that net purchases of $800bn have, very approximately, a similar impact on US GDP to a 100bp reduction in the fed funds rate.

This implies that the Fed’s cumulative LSAP (set to approach $3.0trn by Q1 2014) might be considered equivalent to lowering the fed funds target rate by 370bp. We have tried to represent this in terms of a negative equivalent fed funds rate in the chart above, which illustrates that a return to ‘normality’ in terms of the Fed’s balance sheet and reaching even a 2-2.5% fed funds rate would represent a formidable tightening of US monetary conditions.

Simply put - how do you think our easy-money, share-buying-back, leverage at all-time highs corporations will cope with a 600bps rise in the cost of capital over the next three years?

Source: Barclays

S&P - DRIVER$ & TRIGGER$

The S&P has given up all of the FOMC Announcment market "pop' of placing "TAPER" on hold. Additionally, the Sunday German election results are in with Merkel still in a position of maintaining her coalition government. The markets have digested these events and the 2nd largest equity inflows since the 2000 Bubble Popped in the week leading up to the FOMC Announcement. The markets are now quickly moving towards the concern of a potential government shutdown over the debt ceiling (see charts). The Q3 earnings results and forward guidance are also now also a concern.

As of Monday night (09-23-13) the S&P had its 3rd down day in a row for the first time in 5 weeks.

This dramatic move alligns with maximum reward in the expiration of quadruple witch. Quadruple witch is usually marked by a significant, abrupt market move. FOMC meetings are normally scheduled the Wednesday of FOMC week to get maximum market movement from the well scripted FOMC announcement.

We are now watching closely the October 8th Bradley Model turn date which also matches a Fibonacci Cluster

The markets were watching:

The markets are now watching:

Flows into equity funds surged this past week as investors digested news that Lawrence Summers had withdrawn his name from consideration as the potential new Chairman of the Federal Reserve. That coupled with a move that engendered near-universal surprise—the Fed’s decision to postpone any tapering of its bond-buying program caused equity markets to jump to new highs.

Exchange-traded fund (ETF) investors were the first to take advantage of the Fed’s continued stimulus by loading $15.5 billion net into their investments for the week ended September 18. Equity mutual fund investors weren’t shy either; they added $2.6 billion to their accounts.

YEAR’S LARGEST ONE-DAY RALLY FOR TREASURIES

By refusing to back away from its bond buying, the Fed helped put the bid back into the Treasury market, which saw yields on the ten-year note drop from 2.86% to 2.69%—for the largest one-day rally this year. Taxable bond fund investors added about $1.4 billion net to their accounts; about $200 million was pulled from bond ETFs and just under $1.6 billion was put to work in bond mutual funds. Top flows among bond mutual fund groups were for Loan Participation Funds, which took in $1.1 billion.

Municipal debt funds continued to bleed assets, despite the late Treasury rally: their net outflows reached $1.1 billion, with no tourniquet in sight to stop the outflows. Money market funds had small net outflows of just $230 million, mostly because of institutional buying of $3.2 billion.

For more information on this week’s fund flows data, please refer to Lipper’s U.S. Fund Flows website.

2nd Largest Equity Inflows Since 2000 Bubble Popped 09-20-13 BofAML via ZH

So much for the money-on-the-sideliness bullshit. Inflows into US equity funds rose to $23.1bn. This from an already strong $13.2bn inflow last week. As BofAML notes, this is the second largest weekly inflow since at least 2000 - which, coincidentally, was the last time a bubble of this magnitude (cough Fireeye IPO +100% on open today) occured (though don't tell Jim Bullard). As BofAML notes, "a rising market lifts all flows..." and global equity flows this week are the highest ever - yeah that always ends well.

In fact flows to all global equity funds have never been higher...

Chart: BofAML

The Government Is Spying On Us Through Our Computers, Phones, Cars, Buses, Streetlights, At Airports And On The Street, Via Mobile Scanners And Drones, Through Our Smart Meters, And In Many Other Ways

Take a Peek at How Widespread Spying Has Become Washingtonsblog 09-23-13

Even now – after all of the revelations by Edward Snowden and other whistleblowers – spying apologists say that the reports are “exaggerated” or “overblown”, and that the government only spies on potential bad guys.

In reality, the government is spying on everyone’s digital and old-fashioned communications.

For example, the government is photographing the outside information on every piece of snail mail.

The government is spying on you through your phone … and may even remotely turn on your camera and microphone when your phone is off.

As one example, the NSA has inserted its code into Android’s operating system … bugging three-quarters of the world’s smartphones. Google – or the NSA – can remotely turn on your phone’s camera and recorder at any time.

Moreover, Google knows just about every WiFi password in the world … and so the NSA does as well, since it spies so widely on Google.

But it’s not just the Android.  In reality, the NSA can spy on just about everyone’s smart phone.

Cell towers track where your phone is at any moment, and the major cell carriers, including Verizon and AT&T, responded to at least 1.3 million law enforcement requests for cell phone locations and other data in 2011. (And – given that your smartphone routinely sends your location information back to Apple or Google – it would be child’s play for the government to track your location that way.) Your iPhone, or other brand of smartphone is spying on virtually everything you do (ProPublica notes: “That’s No Phone. That’s My Tracker“). Remember, that might be happening even when your phone is turned off.

The government might be spying on you through your computer’s webcam or microphone. The government might also be spying on you through the “smart meter” on your own home.

NSA also sometimes uses “man-in-the-middle” tactics, to pretend that it is Google or other popular websites to grab your information.

The FBI wants a backdoor to all software. But leading European computer publication Heise said in 1999 that the NSA had already built a backdoor into all Windows software.

Microsoft has long worked hand-in-hand with the NSA and FBI so that encryption doesn’t block the government’s ability to spy on users of Skype, Outlook, Hotmail and other Microsoft services.

And Microsoft informs intelligence agencies of with information about bugs in its popular software before it publicly releases a fix, so that information can be used by the government to access computers. (Software vulnerabilities are also sold to the highest bidder.)

A top expert in the ‘microprocessors’ or ‘chips’ inside every computer – having helped start two semiconductor companies and a supercomputer firm – also says:

He would be “surprised” if the US National Security Agency was not embedding “back doors” inside chips produced by Intel and AMD, two of the world’s largest semiconductor firms, giving them the possibility to access and control machines.

***

[The expert] said when he learned the NSA had secured “pre-encryption stage” access to Microsoft’s email products via the PRISM leaks, he recognised that “pretty much all our computers have a way for the NSA to get inside their hardware” before a user can even think about applying encryption or other defensive measures.

Leading security experts say that the NSA might have put a backdoor in all encryption standards years ago. … meaning that the NSA could easily hack into all encrypted communications. And the NSA hacks into encrypted “VPN” connections.

It’s gotten so bad that some of the largest encryption companies are warning that their encryption tools are compromised.

“Black boxes” are currently installed in between 90% and 96% of all new cars. And starting in 2014, all new cars will include black boxes that can track your location.

License plate readers mounted on police cars allow police to gather millions of records on drivers … including photos of them in their cars.

If you have a microphone in your car, that might also open you up to snoopers. As CNET points out:

Surreptitious activation of built-in microphones by the FBI has been done before. A 2003 lawsuit revealed that the FBI was able to surreptitiously turn on the built-in microphones in automotive systems like General Motors’ OnStar to snoop on passengers’ conversations.

When FBI agents remotely activated the system and were listening in, passengers in the vehicle could not tell that their conversations were being monitored.

A security expert and former NSA software developer says that hackers can access private surveillance cameras. Given that the NSA apparently already monitors public cameras using facial recognition software (and see this), and that the FBI is building a system which will track “public and private surveillance cameras around the country”, we can assume that government agencies might already be hacking into private surveillance cameras.

The CIA wants to spy on you through your dishwasher and other “smart” appliances. As Slate notes:

Watch out: the CIA may soon be spying on you—through your beloved, intelligent household appliances, according to Wired.

In early March, at a meeting for the CIA’s venture capital firm In-Q-Tel, CIA Director David Petraeus reportedly noted that “smart appliances” connected to the Internet could someday be used by the CIA to track individuals. If your grocery-list-generating refrigerator knows when you’re home, the CIA could, too, by using geo-location data from your wired appliances, according to SmartPlanet.

“The current ‘Internet of PCs’ will move, of course, toward an ‘Internet of Things’—of devices of all types—50 to 100 billion of which will be connected to the Internet by 2020,” Petraeus said in his speech. He continued:

Items of interest will be located, identified, monitored, and remotely controlled through technologies such as radio-frequency identification, sensor networks, tiny embedded servers, and energy harvesters—all connected to the next-generation Internet using abundant, low cost, and high-power computing—the latter now going to cloud computing, in many areas greater and greater supercomputing, and, ultimately, heading to quantum computing.

***

ITworld’s Kevin Fogarty thinks that J. Edgar Hoover, were he still with us, would “die of jealousy” upon hearing about the tools soon to be at Petraeus’ disposal.

And they’re probably bluffing and exaggerating, but the Department of Homeland Security claims they will soon be able to know your adrenaline level, what you ate for breakfast and what you’re thinking … from 164 feet away. (In addition, people will probably soon be swallowing tracking devices for medical purposes)

The government is allegedly scanning prisoners’ brains without their consent at Guantanamo. In the near future, brain scanners may be able to literally read our thoughts (and see this).

The government is currently testing systems for use in public spaces which can screen for “pre-crime”. As Nature reports:

Like a lie detector, FAST measures a variety of physiological indicators, ranging from heart rate to the steadiness of a person’s gaze, to judge a subject’s state of mind. But there are major differences from the polygraph. FAST relies on non-contact sensors, so it can measure indicators as someone walks through a corridor at an airport, and it does not depend on active questioning of the subject.

CBS News points out:

FAST is designed to track and monitor, among other inputs, body movements, voice pitch changes, prosody changes (alterations in the rhythm and intonation of speech), eye movements, body heat changes, and breathing patterns. Occupation and age are also considered. A government source told CNET that blink rate and pupil variation are measured too.

A field test of FAST has been conducted in at least one undisclosed location in the northeast. “It is not an airport, but it is a large venue that is a suitable substitute for an operational setting,” DHS spokesman John Verrico told Nature.com in May.

Although DHS has publicly suggested that FAST could be used at airport checkpoints–the Transportation Security Administration is part of the department, after all–the government appears to have grander ambitions. One internal DHS document (PDF) also obtained by EPIC through the Freedom of Information Act says a mobile version of FAST “could be used at security checkpoints such as border crossings or at large public events such as sporting events or conventions.”

The risk of false positives is very real. As Computer World notes:

Tom Ormerod, a psychologist in the Investigative Expertise Unit at Lancaster University, UK, told Nature, “Even having an iris scan or fingerprint read at immigration is enough to raise the heart rate of most legitimate travelers.” Other critics have been concerned about “false positives.” For example, some travelers might have some of the physical responses that are supposedly signs of mal-intent if they were about to be groped by TSA agents in airport security.

Various “pre-crime” sensing devices have already been deployed in public spaces in the U.S.

The government has also worked on artificial intelligence for “pre-crime” detection on the Web. And given that programs which can figure out your emotions are being developed using your webcam, every change in facial expression could be tracked.

According to the NSA’s former director of global digital data – William Binney – the NSA’s new data storage center in Utah will have so much storage capacity that:

“They would have plenty of space … to store at least something on the order of 100 years worth of the worldwide communications, phones and emails and stuff like that,” Binney asserts, “and then have plenty of space left over to do any kind of parallel processing to try to break codes.”

***

[But the NSA isn't stopping there.] Despite its capacity, the Utah center does not satisfy NSA’s data demands. Last month, the agency broke ground on its next data farm at its headquarters at Ft. Meade, Md. But that facility will be only two-thirds the size of the mega-complex in Utah.

The NSA is building next-generation quantum computers to process all of the data.

NBC News reports:

NBC News has learned that under the post-9/11 Patriot Act, the government has been collecting records on every phone call made in the U.S.

This includes metadata … which can tell the government a lot about you. And it also includes content.

The documents leaked by Edward Snowden to Glenn Greenwald show:

But what we’re really talking about here is a localized system that prevents any form of electronic communication from taking place without its being stored and monitored by the National Security Agency.

It doesn’t mean that they’re listening to every call, it means they’re storing every call and have the capability to listen to them at any time, and it does mean that they’re collecting millions upon millions upon millions of our phone and email records.

In addition, a government expert told the Washington Post that the government “quite literally can watch your ideas form as you type.” (And see this.) A top NSA executive confirmed to Washington’s Blog that the NSA is intercepting and storing virtually all digital communications on the Internet.

McClatchy notes:

FBI Director Robert Mueller told a Senate committee on March 30, 2011, that “technological improvements” now enable the bureau “to pull together past emails and future ones as they come in so that it does not require an individualized search.”

The administration is building a facility in a valley south of Salt Lake City that will have the capacity to store massive amounts of records – a facility that former agency whistleblowers say has no logical purpose if it’s not going to be a vault holding years of phone and Internet data.

***

Thomas Drake, a former NSA senior executive who challenged the data collection for several years, said the agency’s intent seems obvious.

“One hundred million phone records?” he asked in an interview. “Why would they want that each and every day? Of course they’re storing it.”

***

Lending credence to his worries, The Guardian’s latest report quoted a document in which Alexander purportedly remarked during a 2008 visit to an NSA intercept station in Britain: “Why can’t we collect all the signals all the time?”

***

One former U.S. security consultant, who spoke on condition of anonymity to protect his connections to government agencies, told McClatchy he has seen agency-installed switches across the country that draw data from the cables.

“Do I know they copied it? Yes,” said the consultant. “Do I know if they kept it? No.”

NSA whistleblower Russel Tice – a key source in the 2005 New York Times report that blew the lid off the Bush administration’s use of warrantless wiretapping – says that the content and metadata of all digital communications are being tapped by the NSA.

The NSA not only accesses data directly from the largest internet companies, it also sucks up huge amounts of data straight from undersea cables providing telephone and Internet service to the United States.

After all, the government has secretly interpreted the Patriot Act so that “everything” is deemed relevant … so the government can spy on everyone.

The NSA isn’t the only agency which is conducting massive spying.

The Wall Street Journal notes:

The rules now allow the little-known National Counterterrorism Center to … copy entire government databases—flight records, casino-employee lists, the names of Americans hosting foreign-exchange students and many others. The agency has new authority to keep data about innocent U.S. citizens for up to five years, and to analyze it for suspicious patterns of behavior. Previously, both were prohibited. Data about Americans “reasonably believed to constitute terrorism information” may be permanently retained.

The changes also allow databases of U.S. civilian information to be given to foreign governments for analysis of their own. In effect, U.S. and foreign governments would be using the information to look for clues that people might commit future crimes.

“It’s breathtaking” in its scope, said a former senior administration official familiar with the White House debate.

Reason notes:

Gazillions. That’s the number of times the federal government has spied on Americans since 9/11 through the use of drones, legal search warrants, illegal search warrants, federal agent-written search warrants and just plain government spying. This is according to Sen. Rand Paul, R-Ky., who, when he asked the government to tell him what it was doing to violate our privacy, was given a classified briefing. The senator — one of just a few in the U.S. Senate who believes that the Constitution means what it says — was required by federal law to agree not to reveal what spies and bureaucrats told him during the briefing.

Even if the US government weren’t recording all of that data, England’s GCHQ spy agency is … and is sharing it with the NSA.

Germany, Australia, Canada and New Zealand are also recording and sharing massive amounts of information with the NSA.

Private contractors can also view all of your data … and the government isn’t keeping track of which contractors see your data and which don’t. And because background checks regarding some contractors are falsified, it is hard to know the types of people that might have your information.

And top NSA and FBI experts say that the government can retroactively search all of the collected information on someone since 9/11 if they suspect someone of wrongdoing … or want to frame him.

The American government is in fact collecting and storing virtually every phone call, purchases, email, text message, internet searches, social media communications, health information, employment history, travel and student records, and virtually all other information of every American.

The Wall Street Journal reported that the NSA spies on Americans’ credit card transactions. Senators Wyden and Udall – both on the Senate Intelligence Committee, with access to all of the top-secret information about the government’s spying programs – write:

Section 215 of the Patriot Act can be used to collect any type of records whatsoever … including information on credit card purchases, medical records, library records, firearm sales records, financial information and a range of other sensitive subjects.

Many other government agencies track your credit card purchases as well. In fact, all U.S. intelligence agencies – including the CIA and NSA – are going to spy on Americans’ finances.

The IRS will be spying on Americans’ shopping records, travel, social interactions, health records and files from other government investigators.

The Consumer Financial Protection Board will also spy on the finances of millions of Americans.

As Washington Monthly noted in 2004, Congress chopped off the head of the Total Information Awareness program … but the program returned as a many-headed hydra:

A program can survive even when the media, the public, and most of Congress wants it killed. It turns out that, while the language in the bill shutting down TIA was clear, a new line had been inserted during conference—no one knew by whom—allowing “certain processing, analysis, and collaboration tools” to continue.

….Thanks to the Central Intelligence Agency and the National Security Agency, which had lobbied for the provision, TIA didn’t die—it metastasized. As the AP reported in February [of 2004], the new language simply outsourced many TIA programs to other intelligence offices and buried them in the so-called “black budget.” What’s more, today, several agencies are pursuing data mining projects independent of TIA, including the Department of Homeland Security, the Justice Department, the CIA, the Transportation Security Administration, and NASA….Even with TIA ostensibly shut down, many of the private contractors who worked on the program can continue their research with few controls.

The government is flying drones over the American homeland to spy on us. Indeed, the head of the FBI told Congress that drones are used for domestic surveillance … and that there are no rules in place governing spying on Americans with drones.

Senator Rand Paul correctly notes:

The domestic use of drones to spy on Americans clearly violates the Fourth Amendment and limits our rights to personal privacy.

Emptywheel notes in a post entitled “The OTHER Assault on the Fourth Amendment in the NDAA? Drones at Your Airport?”:

***

As the map above makes clear–taken from this 2010 report–DOD [the Department of Defense] plans to have drones all over the country by 2015.

Many police departments are also using drones to spy on us. As the Hill reported:

At least 13 state and local police agencies around the country have used drones in the field or in training, according to the Association for Unmanned Vehicle Systems International, an industry trade group. The Federal Aviation Administration has predicted that by the end of the decade, 30,000 commercial and government drones could be flying over U.S. skies.

***

“Drones should only be used if subject to a powerful framework that regulates their use in order to avoid abuse and invasions of privacy,” Chris Calabrese, a legislative counsel for the American Civil Liberties Union, said during a congressional forum in Texas last month.

He argued police should only fly drones over private property if they have a warrant, information collected with drones should be promptly destroyed when it’s no longer needed and domestic drones should not carry any weapons.

He argued that drones pose a more serious threat to privacy than helicopters because they are cheaper to use and can hover in the sky for longer periods of time.

A congressional report earlier this year predicted that drones could soon be equipped with technologies to identify faces or track people based on their height, age, gender and skin color.

The military is paying for the development of drones with facial recognition software which “remember” people’s faces … and read “malintent”.

Moreover, Wired reports:

Transit authorities in cities across the country are quietly installing microphone-enabled surveillance systems on public buses that would give them the ability to record and store private conversations….

The systems are being installed in San Francisco, Baltimore, and other cities with funding from the Department of Homeland Security in some cases ….

The IP audio-video systems can be accessed remotely via a built-in web server (.pdf), and can be combined with GPS data to track the movement of buses and passengers throughout the city.

***

The systems use cables or WiFi to pair audio conversations with camera images in order to produce synchronous recordings. Audio and video can be monitored in real-time, but are also stored onboard in blackbox-like devices, generally for 30 days, for later retrieval. Four to six cameras with mics are generally installed throughout a bus, including one near the driver and one on the exterior of the bus.

***

Privacy and security expert Ashkan Soltani told the Daily that the audio could easily be coupled with facial recognition systems or audio recognition technology to identify passengers caught on the recordings.

RT notes:

Street lights that can spy installed in some American cities

America welcomes a new brand of smart street lightning systems: energy-efficient, long-lasting, complete with LED screens to show ads. They can also spy on citizens in a way George Orwell would not have imagined in his worst nightmare.

­With a price tag of $3,000+ apiece, according to an ABC report, the street lights are now being rolled out in Detroit, Chicago and Pittsburgh, and may soon mushroom all across the country.

Part of the Intellistreets systems made by the company Illuminating Concepts, they have a number of “homeland security applications” attached.

Each has a microprocessor “essentially similar to an iPhone,” capable of wireless communication. Each can capture images and count people for the police through a digital camera, record conversations of passers-by and even give voice commands thanks to a built-in speaker.

Ron Harwood, president and founder of Illuminating Concepts, says he eyed the creation of such a system after the 9/11 terrorist attacks and the Hurricane Katrina disaster. He is “working with Homeland Security” to deliver his dream of making people “more informed and safer.”

The TSA has moved way past airports, trains and sports stadiums, and is deploying mobile scanners to spy on people all over the place. This means that traveling within the United States is no longer a private affair.

You might also have seen the news this week that the Department of Homeland Security is going to continue to allow searches of laptops and phones based upon “hunches”.

What’s that about?

The ACLU published a map in 2006 showing that nearly two-thirds of the American public – 197.4 million people – live within a “constitution-free zone” within 100 miles of land and coastal borders:

The ACLU explained:

• Normally under the Fourth Amendment of the U.S. Constitution, the American people are not generally subject to random and arbitrary stops and searches.

• The border, however, has always been an exception. There, the longstanding view is that the normal rules do not apply. For example the authorities do not need a warrant or probable cause to conduct a “routine search.”

• But what is “the border”? According to the government, it is a 100-mile wide strip that wraps around the “external boundary” of the United States.

• As a result of this claimed authority, individuals who are far away from the border, American citizens traveling from one place in America to another, are being stopped and harassed in ways that our Constitution does not permit.

• Border Patrol has been setting up checkpoints inland — on highways in states such as California, Texas and Arizona, and at ferry terminals in Washington State. Typically, the agents ask drivers and passengers about their citizenship. Unfortunately, our courts so far have permitted these kinds of checkpoints – legally speaking, they are “administrative” stops that are permitted only for the specific purpose of protecting the nation’s borders. They cannot become general drug-search or other law enforcement efforts.

• However, these stops by Border Patrol agents are not remaining confined to that border security purpose. On the roads of California and elsewhere in the nation – places far removed from the actual border – agents are stopping, interrogating, and searching Americans on an everyday basis with absolutely no suspicion of wrongdoing.

• The bottom line is that the extraordinary authorities that the government possesses at the border are spilling into regular American streets.

Computer World reports:

Border agents don’t need probable cause and they don’t need a stinking warrant since they don’t need to prove any reasonable suspicion first. Nor, sadly, do two out of three people have First Amendment protection; it is as if DHS has voided those Constitutional amendments and protections they provide to nearly 200 million Americans.

***

Don’t be silly by thinking this means only if you are physically trying to cross the international border. As we saw when discussing the DEA using license plate readers and data-mining to track Americans movements, the U.S. “border” stretches out 100 miles beyond the true border. Godfather Politics added:

But wait, it gets even better! If you live anywhere in Connecticut, Delaware, Florida, Hawaii, Maine, Massachusetts, Michigan, New Hampshire, New Jersey or Rhode Island, DHS says the search zones encompass the entire state.

Immigrations and Customs Enforcement (ICE) and Customs and Border Protection (CBP) have a “longstanding constitutional and statutory authority permitting suspicionless and warrantless searches of merchandise at the border and its functional equivalent.” This applies to electronic devices, according to the recent CLCR “Border Searches of Electronic Devices” executive summary [PDF]:

Fourth Amendment

The overall authority to conduct border searches without suspicion or warrant is clear and longstanding, and courts have not treated searches of electronic devices any differently than searches of other objects. We conclude that CBP’s and ICE’s current border search policies comply with the Fourth Amendment. We also conclude that imposing a requirement that officers have reasonable suspicion in order to conduct a border search of an electronic device would be operationally harmful without concomitant civil rights/civil liberties benefits. However, we do think that recording more information about why searches are performed would help managers and leadership supervise the use of border search authority, and this is what we recommended; CBP has agreed and has implemented this change beginning in FY2012.***

The ACLU said, Wait one darn minute! Hello, what happened to the Constitution? Where is the rest of CLCR report on the “policy of combing through and sometimes confiscating travelers’ laptops, cell phones, and other electronic devices—even when there is no suspicion of wrongdoing?” DHS maintains it is not violating our constitutional rights, so the ACLU said:

If it’s true that our rights are safe and that DHS is doing all the things it needs to do to safeguard them, then why won’t it show us the results of its assessment? And why would it be legitimate to keep a report about the impact of a policy on the public’s rights hidden from the very public being affected?

***

As Christian Post wrote, “Your constitutional rights have been repealed in ten states. No, this isn’t a joke. It is not exaggeration or hyperbole. If you are in ten states in the United States, your some of your rights guaranteed by the Bill of Rights have been made null and void.”

The ACLU filed a Freedom of Information Act request for the entire DHS report about suspicionless and warrantless “border” searches of electronic devices. ACLU attorney Catherine Crump said “We hope to establish that the Department of Homeland Security can’t simply assert that its practices are legitimate without showing us the evidence, and to make it clear that the government’s own analyses of how our fundamental rights apply to new technologies should be openly accessible to the public for review and debate.”

Meanwhile, the EFF has tips to protect yourself and your devices against border searches. If you think you know all about it, then you might try testing your knowledge with a defending privacy at the U.S. border quiz.

Wired pointed out in 2008 that the courts have routinely upheld such constitution-free zones:

Federal agents at the border do not need any reason to search through travelers’ laptops, cell phones or digital cameras for evidence of crimes, a federal appeals court ruled Monday, extending the government’s power to look through belongings like suitcases at the border to electronics.

***

The 9th U.S. Circuit Court of Appeals sided with the government, finding that the so-called border exception to the Fourth Amendment’s prohibition on unreasonable searches applied not just to suitcases and papers, but also to electronics.

***

Travelers should be aware that anything on their mobile devices can be searched by government agents, who may also seize the devices and keep them for weeks or months. When in doubt, think about whether online storage or encryption might be tools you should use to prevent the feds from rummaging through your journal, your company’s confidential business plans or naked pictures of you and your-of-age partner in adult fun.

International airports are treated as “borders”, exempt for Fourth Amendment protections. As such, 145 airports should be added to the map above.

Do you still believe that the government is only spying on bad guys in “targeted” searches?