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Capital One’s breach was inevitable, because we did nothing after Equifax

July 30, 2019 |

Another day, another massive data breach.

This time it’s the financial giant and credit card issuer Capital One, which revealed on Monday a credit file breach affecting 100 million Americans and 6 million Canadians. Consumers and small businesses affected are those who obtained one of the company’s credit cards dating back to 2005.

That includes names, addresses, phone numbers, dates of birth, self-reported income and more credit card application data — including over 140,000 Social Security numbers in the U.S., and more than a million in Canada.

The FBI already has a suspect in custody. Seattle resident and software developer Paige A. Thompson, 33, was arrested and detained pending trial. She’s been accused of stealing data by breaching a web application firewall, which was supposed to protect it.

Sound familiar? It should. Just last week, credit rating giant Equifax settled for more than $ 575 million over a date breach it had — and hid from the public for several months — two years prior.

Why should we be surprised? Equifax faced zero fallout until its eventual fine. All talk, much bluster, but otherwise little action.

Equifax’s chief executive Richard Smith “retired” before he was fired, allowing him to keep his substantial pension packet. Lawmakers grilled the company but nothing happened. An investigation launched by the former head of the Consumer Financial Protection Bureau, the governmental body responsible for protecting consumers from fraud, declined to pursue the company. The FTC took its sweet time to issue its fine — which amounted to about 20% of the company’s annual revenue for 2018. For one of the most damaging breaches to the U.S. population since the breach of classified vetting files at the Office of Personnel Management in 2015, Equifax got off lightly.

Legislatively, nothing has changed. Equifax remains as much of a “victim” in the eyes of the law as it was before — technically, but much to the ire of the millions affected who were forced to freeze their credit as a result.

Mark Warner, a Democratic senator serving Virginia, along with his colleague since turned presidential candidate Elizabeth Warren, was tough on the company, calling for it to do more to protect consumer data. With his colleagues, he called on the credit agencies to face penalties to the top brass and extortionate fines to hold the companies accountable — and to send a message to others that they can’t play fast and loose with our data again.

But Congress didn’t bite. Warner told TechCrunch at the time that there was “a failure of the company, but also of lawmakers” for not taking action.

Lo and behold, it happened again. Without a congressional intervention, Capital One is likely to face largely the same rigmarole as Equifax did.

Blame the lawmakers all you want. They had their part to play in this. But fool us twice, shame on the credit companies for not properly taking action in the first place.

The Equifax incident should have sparked a fire under the credit giants. The breach was the canary in the coal mine. We watched and waited to see what would happen as the canary’s lifeless body emerged — but, much to the American public’s chagrin, no action came of it. The companies continued on with the mentality that “it could happen to us, but probably won’t.” It was always going to happen again unless there was something to force the companies to act.

Companies continue to vacuum up our data — knowingly and otherwise — and don’t do enough to protect it. As much as we can have laws to protect consumers from this happening again, these breaches will continue so long as the companies continue to collect our data and not take their data security responsibilities seriously.

We had an opportunity to stop these kinds of breaches from happening again, yet in the two years passed we’ve barely grappled with the basic concepts of internet security. All we have to show for it is a meager fine.

Thompson faces five years in prison and a fine of up to $ 250,000.

Everyone else faces just another major intrusion into their personal lives. Not at the hands of the hacker per se, but the companies that collect our data — with our consent and often without — and take far too many liberties with it.


Diamonds and the Treasury Debt Ceiling: Why Nothing Has ‘Intrinsic Value’ in Economics

July 15, 2019 |

Diamonds and the Debt Ceiling: Why Nothing Has 'Intrinsic Value' in Economics

The U.S. Treasury Department has just issued an urgent letter requesting a lift on the debt ceiling, warning Congress of imminent financial collision in September as federal cash is running out. Though this scenario has played out many times before, it takes on special significance now in light of president Trump’s recent comments about bitcoin, saying it was created from “thin air,” and a congressional warning to Facebook regarding their Libra project. After all, to raise the debt ceiling and keep paying bills with borrowed USD is creating value out of thin air as well. Intrinsic value is nowhere to be found here. Not surprising when it comes to fiat perhaps, but diamonds and gold don’t make the cut, either.

Diamonds and the Treasury Debt Ceiling: Why Nothing Has 'Intrinsic Value' in Economics

Fiat: The Biggest Ponzi Scheme There Is

In Treasury Secretary Steven Mnuchin’s July 12 letter to House Speaker Nancy Pelosi, he states:

“Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes”

Speaking of cash, contrary to popular belief, the Federal Reserve doesn’t actually print any paper money. That’s what the treasury does, and this practice isn’t all that remarkable anymore, comparatively speaking. As it stands today, only about 11% of the money supply in the U.S. exists as physical money. Though estimates on exact amounts vary, the vast majority is created digitally, and debited or credited to banks via Fed implemented policy.

What this means is that the current system is literally one of centrally controlled digital assets. The whole thing is really a debt spiral of sorts, where the creator of the credit and debt (the U.S. government) essentially borrows from itself while the budget and national debt continue to increase for taxpayers. A raised debt ceiling only exacerbates the situation, long term. Clearly, there is no plan to ever pay off these debts, or become solvent. That’s where you, your children, and your children’s children—and on and on—come in.

Diamonds and the Treasury Debt Ceiling: Why Nothing Has 'Intrinsic Value' in Economics

Where Does Value Come From?

If money can be created out of “thin air” as such, how can it have any real value? Some claim that cash should be backed by gold, and this is solid reasoning. Gold here on planet earth is a limited commodity, so the precious metal can’t be “printed” ad infinitum. As such it’s a safeguard against inflation. A much more sensible approach than simply firing up the old fiat printing presses and burning down the town, devaluing the dollar even more. But even gold is plagued by this singularly troubling, controversial question: what gives it value?

Diamonds and the Treasury Debt Ceiling: Why Nothing Has 'Intrinsic Value' in Economics

Gold’s ‘Intrinsic’ Value and the Diamond-Water Paradox

The “Diamond-Water Paradox” is a compelling thought experiment challenging popular economic misconceptions. Many have viewed—and continue to view—money through Keynesian or even (outside economic circles) Labor Theory-colored lenses. To the Keynesian and “Modern Monetary” mind, debt itself is a go-to tool in times of debt crisis, as evidenced now by the pleas to raise the ceiling in Washington. To the labor theory view (“I spent five hours on that paper, I should have gotten an A!”) time and effort equate to objective value.

To get to the paradox: Economically speaking, nothing has intrinsic value. How much value does a pile of diamonds have to someone stranded in the desert, about to die of thirst? Imagine a table there in the merciless, dry scorching heat, where you can either choose diamonds (and certain death), or a life-giving drink of cool, clear water.

Diamonds and the Treasury Debt Ceiling: Why Nothing Has 'Intrinsic Value' in Economics

Almost everyone (with a will to live) will choose water for a simple reason: value is not intrinsic. It is created from the market atmosphere of a given situation at a given time, as observed by a given market actor (in this case, the person dying of thirst). Get this individual back to civilization, where there is plenty of water, and they will most likely choose the diamonds.

Further, if there were multiple tables of water and diamonds in the desert (remember only one can be chosen), the market actor will consume the water first and begin to stockpile it, until its marginal utility has been exhausted. Diminishing returns (a heavy backpack and no more thirst) mean that soon the diamonds will be the best choice now that survival is likely, and their exchange value back in civilization is high.

Diamonds and the Treasury Debt Ceiling: Why Nothing Has 'Intrinsic Value' in Economics

Beethoven and Bitcoin: Unquantifiably Priceless

Gold and other resources do meet the criteria for being sound money, but they are all worthless without a market to value them. If suddenly nobody had any interest in gold, its value would plummet to zero, and even the number “zero” itself would become meaningless. This notwithstanding many individuals, even in official government positions, continue to argue that some things like gold or the USD have a kind of inherent value, where others don’t.

Though quality is often recognized in a sense that seems universal (very few people will, for example, say that Beethoven’s symphonies are garbage and of low quality or value) in economics, one is forced to recognize this critical limitation. So while gold might be argued by some to have some kind of mystical “intrinsic value,” or Beethoven’s music might be said to be quantifiably “better,” it’s a moot point, ultimately. It all depends on the market actor and context.

Diamonds and the Treasury Debt Ceiling: Why Nothing Has ‘Intrinsic Value’ in Economics

Crypto: Full of ‘Thin Air,’ But Not Lacking Value

Governments fail miserably in attempting to “force-fit” rigid economic templates like raising the “debt ceiling” or setting arbitrary interest rates. They engage in synthetic interference regardless of individuals and their market action, when ultimately it is these market actors creating the actual value and price signals for the economy in the first place.

Whomever Satoshi Nakamoto may be, he or she was fed up with this fiscal lunacy, and pitched a new idea to the world. The new idea gained currency (quite literally). As people began to value it in concert, a market was created. What Mnuchin and his friends at the treasury should really be worried about is the faulty, destined-to-fail monetary system they’re riding on, and not so much debt ceilings, or any other such meaningless policy in the context of pyramid-scheme fiat.


Diamonds and the Treasury Debt Ceiling: Why Nothing Has 'Intrinsic Value' in Economics

The Situation Truly Is Urgent, But Not Because of a Debt Ceiling

As it stands, the Treasury Department is sending urgent letters to Congress. The House of Representatives is sending urgent letters to Facebook. And Fed Chairman Jerome Powell says that Libra needs to be approved by regulatory bodies before moving forward any further. Because, of course, it’s urgently important. All in the name of not letting a voluntary monetary system overtake a violent one.

If one were visiting this planet as an alien, it might seem as if humans were being ruled by the violently, economically inept. Debt ceiling adjustment squabbles would look like the least of the world’s problems, or at least to be expected, when the name of the game in the first place is to create credit out of thin air, and saddle it to the backs of the debt-serfs when it implodes.

What do you think about Mnuchin’s letter to Congress? Let us know in the comments section below.

OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

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Kendrick Norton On Losing Arm In Crash, ‘If Nothing Else I’m Alive’

July 12, 2019 |

Miami Dolphins defensive lineman Kendrick Norton is speaking out from his hospital bed — saying even though he lost his arm in a July 4 car crash, he feels grateful to be alive.  “I’m alive,” Norton told CBS4’s Peter D’Oench … “If…

Bill Clinton: I Knew Nothing of Epstein’s ‘Terrible Crimes’

July 9, 2019 |

Bill Clinton—one of numerous powerful people with links to Jeffrey Epstein—says he flew on the financier’s plane, but knew nothing about his “terrible crimes.” In a statement, the former president said that when he flew on Epstein’s plane, he was unaware of the crimes Epstein ” pleaded guilty to…

‘Nothing But Zeroes’ Produces a Record Lottery Payout

June 23, 2019 |

Turns out that zero can be a lucky number. North Carolina’s state lottery Saturday said it set a record payout after the winning numbers in a Pick 4 game came back “0-0-0-0.” The lottery said about 1,000 tickets at $ 1 were sold and will pay out at $ 5,000,…

Couple Wins Shopping Spree, Comes Home With Nothing

June 22, 2019 |

“I immediately envisioned grabbing all sorts of things for my own cupboard,” Chantal Leroux tells CBC News of the moment she learned she’d won a US $ 375 shopping spree at an Alberta grocery store. “A couple seconds later, I thought what a great opportunity to be able to give back….

Trump: ‘I had nothing to do with Russia helping me to get elected’

June 1, 2019 |

Trump: ‘I had nothing to do with Russia helping me to get elected’The president has long downplayed Russian interference in the 2016 election. But for the first time Thursday, Trump briefly admitted Moscow’s involvement aided in his victory.

Yahoo News – Latest News & Headlines


Dennis Rodman Denies Slapping Man, Says ‘Nothing Happened’

May 25, 2019 |

Dennis Rodman says he doesn’t hit people — and never has in his life — so the latest claim that he randomly smacked a guy at a bar is total BS. TMZ Sports got Rodman in Orange County, CA Friday and asked about what allegedly went down last week…

Boeing said nothing about faulty 737 Max alert until after crash

May 6, 2019 |

Boeing Co. knew months before a deadly 737 Max crash that a cockpit alert wasn’t working the way the company had represented to buyers of the jetliner.

But the plane maker didn’t tell airlines or the Federal Aviation Administration of the problem with the warning light until after a Lion Air plane…

L.A. Times – Business

Trump lawyer Giuliani says 'there's nothing wrong with taking information from Russians'

April 23, 2019 |

Trump lawyer Giuliani says 'there's nothing wrong with taking information from Russians'Defending President Trump’s campaign for its willingness to accept help from Russia in the 2016 presidential election, Trump’s lawyer Rudy Giuliani said there was “nothing wrong” with a campaign taking information from foreign sources.

Yahoo News – Latest News & Headlines