Chancellor of the Exchequer Philip Hammond has released the budget. If you or I balanced our books as badly as he does, we’d be in deep trouble. But governments make the rules. And everybody just focuses on whether things are getting marginally worse or marginally better.
The verdict is marginally better this year. Borrowing won’t go quite as high as expected thanks to tax increases and an economy that’s doing better than forecast. After a bumper 2017, GDP and borrowing will return to predicted levels.
It’s odd how budgets used to be about the year they’re in. These days they’re all about projections. Politicians don’t have to be responsible this year. They have to show they’re on track to be responsible at some point in the future.
This sounds like some sort of toddler or teenager parenting style to me
The most notable thing about the budget is the lack of notable things about the budget. There’s only one major talking point which everyone seized on. Everyone except opposition leader Jeremy Corbyn, who failed to mention it in his response.
The Chancellor has increased national insurance contributions for the self-employed by 1%, going against a Conservative Party manifesto promise. A budget which only breaks one promise is probably some sort of political record.
For investors, there’s one big change. The tax free dividend allowance will fall from five to two thousand pounds, reversing the Tories’ own 2016 policy. That’s an average loss of 320 pounds for 2.2 million people. It’s a pain in the neck for dividend investors.
The worst news is an increase in beer taxes. And if you smoke, a minimum duty of £5.37 per 20 pack.
All in all it’s a fairly boring budget. But that’s because the big news is elsewhere – Brexit. Hammond didn’t even mention the B word in his speech. But you’ve heard all about it here in Capital & Conflict this week. So we’re moving onto WikiLeaks and the CIA scandal today.
The CIA knows everything
WikiLeaks is back in action again. It’s dumped a remarkable 8,761 document leak from inside the CIA. The leak is known as Vault 7. WikiLeaks’ Julian Assange claims it reveals “the entire hacking capacity of the CIA”.
The leaks are about the UMDRAGE group, which infects electronic devices with hidden software that allows government agencies to spy on us.
What does this mean in practical terms? The CIA could be watching you, right now. Three times over, in fact. Through your TV, phone and laptop. And monitoring your internet usage over your router. All with software secretly installed in the electronic devices you bought. Apps previously thought safe, like WhatsApp, are breached too.
Sound absurd? Take the “Weeping Angel” program as an example. It allows the CIA to listen through Samsung smart TVs. Through a “false off” mode, eavesdroppers are even able to make the TV look like it’s off when it isn’t. One Twitter user cleverly compared Samsung’s privacy policy to an excerpt from the Orwell book “1984”. The TVs are remarkably similar.
The CIA has pointed out it can’t actually use its tools on Americans without the usual judicial procedures being passed first. This is a red herring. It ignores that international spy agencies cooperate with each other to avoid each other’s judicial requirements.
Covering mistakes up
It ignores the fact that the CIA has ignored judicial requirements in the past. It tried to cover up torture in its own documents by hacking American congressmen, for example. And it’s just this sort of hacking that’s dangerous – attempts by the CIA to cover up their own mistakes. They’d do that regardless of any judicial requirements because a cover up is about breaches in the first place.
The CIA’s safeguards also don’t protect foreigners. As you’ll see in a moment, the Germans are up in arms aleardy.
On an even more suspicious note, if the CIA can hack your electronic devices, and control them, where does that leave driverless cars? WikiLeaks says the CIA has been working on hacking and controlling them since 2014: “The purpose of such control is not specified, but it would permit the CIA to engage in nearly undetectable assassinations.”
In 2013 a war correspondent journalist drove into a palm tree after criticising Obama’s surveillance of Americans in an article. Intelligence officials had been interviewing his friends and he claimed to be onto a big story shortly before killing himself…
Framing the Russians from Germany
There’s another important revelation in the leaks. It’s crucially important to how you see the world. And whether you believe the media.
The CIA can make their spying attempts look like they’re coming from other countries. By leaving electronic fingerprints agents can ensure anyone tracing the hacks will think they came from somewhere like Russia.
This is probably quite a simple thing to do. And it seems a painfully obvious way of doing things. But it turns the spy game into an interesting political football. For example, an investigation might conclude it has evidence that a hacking attack came from Russia. Cue an international diplomatic scandal.
The American Democrat party has recently accused Russia of hacking its servers during the election. Given Trump’s close ties to Russians, the conclusion is obvious. But such accusations are now meaningless because we know the CIA can circumvent our ability to track where hacks come from.
Follow the electronic fingerprint trail beyond Russia, if you can, and you might get to Frankfurt, Germany. That’s where the CIA bases a lot of its hackers.
And that’s where the funny side to this story comes in. Some of the leaked CIA documents are hilarious. They tell hackers exactly what to do upon arrival in Frankfurt, my former home. Reading about the CIA’s advice for Germany is priceless.
Imagine yourself as a secret agent, reading your mission brief. It tells you to take a shower when you arrive in your hotel. And that petrol stations “are not recommended for fine dining”.
Don’t they know that hackers never shower?
An early invitation
Nick O’Connor has asked me to let you know about an upcoming project at Southbank Investment Research. Next week Eoin Treacy will host an online tutorial explaining the philosophy behind his publication The Trigger Point Trader.
The 4-day tutorial aims to teach you exactly how to spot big moves in the stock market before they happen. There are several clues and cues you need to know. Then you’ll be able to predict and position yourself to make money.
If you’re interested and would like to know more about just what’s involved, just click here.
Until next time,
Nickolai Hubble
Editor, Capital & Conflict
Category: Geopolitics