Monday, September 5, 2011

How the CIA Became 'One Hell of a Killing Machine'


On April 14, 2004, CIA Director George Tenet looked so impotent he might have starred in a Viagra commercial. Tenet had come before the 9/11 Commission for what was sure to be a public flogging. In response, he alternately apologized for the agency’s failure to stop 9/11 and explained it away. Finally, the exhausted panelists posed him a bottom-line question: how long would it take Tenet to get the CIA in a position to counterattack al-Qaida?

“It’s going to take another five years,” Tenet confessed, ”to build the clandestine service the way the human intelligence capability of this country needs to be run.”

Seven years later, no one views the CIA as anything resembling impotent. The drone strikes it operates are the most important counterterrorism tool the Obama administration uses, battering a relatively small section of Pakistan so intensely that in 2010 they struck an average of once every three days. Osama bin Laden is dead as the result of a military operation the CIA commanded, highlighting the unprecedented coordination between CIA and the Joint Special Operations Command (JSOC). In the words of the head of CIA’s Counterterrorism Center, its central nervous system for counterterrorism: “We are killing these sons of bitches faster than they can grow them now.”

9/11 Commission Chairman Thomas Kean judged Tenet’s admission “one of the most appalling comments we heard.” But as it turned out, Tenet’s timetable was prescient. A remarkable Washington Post story explores the rejuvenated CIA, which one veteran calls “one hell of a killing machine.”

CIA’s fleet of 30 Predators and Reapers — the Post gives the total — get the most attention, and understandably so. But it’s easy to forget that the drones are a lagging indicator. Every intelligence operation, even the ones that go wrong and kill civilians, is the result of the CIA’s cultivation of a network of spies it didn’t possess back during Tenet’s testimony. Drone strikes need spotters; the CIA has them in a group of Pashtun informants who cross the Afghanistan-Pakistan border with news of militant activity.

It’s never been publicly acknowledged. But without that network, it’s impossible to understand the massive and sustained rise in drone strikes. The Post reports that the program “has killed more than 2,000 militants and civilians since 2001.” That’s not really the whole story. The vast majority of those kills have come since 2008, according to data collected by the New America Foundation, with only 112 estimated deaths maximum occurring between 2004 and 2007. Last year, the drones killed as many as 993 people; the body count is as high as 453 so far in 2011.

Why? Two reasons. First, President George W. Bush relaxed secret restrictions on special operations and intelligence activities in Pakistan. And second, the spy network that Tenet didn’t have came to fruition. Waziristan tribesmen described getting money to plant homing beacons for drones in the houses of targeted militants. al-Qaida and Pakistani Taliban mouthpieces started sounding paranoid about infrared devices powered by 9-volt batteries and tattletale chips planted in SIM cards. Unlike earlier in the decade, the CIA had data about where the terrorists were and their “patterns of life” — or, at least, data about people it thought were terrorists.


Touring the Counterterrorism Center’s Pakistan-Afghanistan Department — note the listed order of those countries — the Post observes, “Every paid informant is given a unique crypt’ that starts with a two-letter digraph designating spies who are paid sources of the CTC.” It’s replicating that bureau’s work with an “equivalent department for Yemen and Somalia,” the major centers of the U.S.’ expanding shadow wars — which have already featured drone strikes.

Then comes the tight collaboration with JSOC. So-called “Omega” or “Cross Matrix” teams comprised of CIA and JSOC operators travel Afghanistan and Iraq in civilian clothes and cars. Mostly they meet with their local sources of information. But on “at least five occasions,” the Post reports, they’ve tested their ability to sneak into Pakistan undetected to execute raids — “early rehearsals” of the bin Laden hit.

They’re also not so into apprehending terrorists. While the CIA still maintains secret prisons like the one Danger Room pal Jeremy Scahill exposed in Somalia, President Obama ordered most of the “black sites” closed in 2009. As former JSOC commander William McRaven recently testified, there aren’t any long-term detention facilities for terrorists anymore, leading to improvised solutions like the brigs of U.S. warships. When the CIA’s Pashtun snitches get used for attacking terrorists, they’re “‘more kill-capture’ than capture-kill,” the Post reports.

That raises the biggest question of all surrounding the new post-9/11 CIA. If it’s acting like a military organization, shouldn’t it have the (relative) transparency and accountability of a military organization? Most members of Congress don’t have the security clearances necessary to know anything at all about CIA operations, preempting effective oversight. Congress is basically reliant on the CIA to check its own work, content to believe the CIA director when he says that the drones kill terrorists, not innocent people. Meanwhile, the Post reports that CIA proxies have “used more indiscriminate means, including land mines, to disrupt insurgent networks.”

Two analysts who’ve closely studied the drone program, Peter Bergen and Katherine Tiedemann, recently argued in Foreign Affairs that the military should take over the drones in order to introduce accountability into their operations. It wouldn’t impact the drone operations at all: Air Force pilots fly them for the CIA, the Post confirms. But it would bring the shadow wars at least marginally out of the shadows.

At the same time, the 2011-era CIA is the direct descendent of the CIA that existed on April 14, 2004. It was a moment of abject humiliation for the agency, called to account for 9/11 even after warning the Bush White House in the spring and summer of 2001 that it was perceiving an imminent, unspecified terrorist attack. The 9/11 Commission accurately channeled a sense of outrage around the country over the fact that the CIA lacked — to strip it of euphemism — a killing machine. Now the agency has built one. Will new director David Petraeus be willing to give it up?

Photos: Noah Shachtman, CIA

Spencer Ackerman is Danger Room's senior reporter, based out of Washington, D.C., covering weapons of doom and the strategies they're used to implement.
Follow @attackerman and @dangerroom on Twitter.

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Dr. Sudoku Prescribes: Only Five Calcudoku

Thomas Snyder (aka Dr. Sudoku) is a two-time World Sudoku Champion and five-time US Puzzle Champion, as well as the author of several books of puzzles. His puzzles are hand-crafted, with artistic themes, serving as a kind of “cure for the common sudoku.” Each week he posts a new puzzle on his blog, The Art of Puzzles. This week’s prescription is a calcudoku variation where there’s something missing in each row and column.

While this week’s puzzle may look normal from the outside, there’s something missing on the inside. Where you might expect to see six numbers, you will only need to fill in five, leaving one spot in each row and column blank. A blank cell will have no effect on the indicated operation and can be treated like the identity element (0 for addition, 1 for multiplication). The rules are otherwise unchanged.

Example (with 1-3):

Puzzle:

Rules: Place a digit from 1 to 5 (or no digit at all) into each cell so that each digit appears exactly once in each row and column. The values in the upper-left of the bold cages indicate the value of an operation applied to all the digits entered into that cage. Numbers can repeat within a cage. Blank cells do not influence the values of the operations.

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Georgian Army Rented for Russia-Hating War Flick

The August 2008 war between Georgia and Russia was fought at sea, in the air, on land … and in the press, as both sides tried to spin events in their favor. The shooting has ended. The propaganda war continues.

On Aug. 19, Georgia fired potentially its most powerful information broadside: the U.S. debut of Five Days of War. Directed by Renny Harlin of Die Hard 2 fame, it’s an action film dramatizing the conflict in a manner decidedly sympathetic to the Georgians. Hardly surprising, as Five Days of War was financed in part by Tbilisi.

To make the $12-million flick — “an intriguing sampling of nationalist cinema,” according to one review — Harlin drew on a Georgian government fund and an eager U.S.-trained Georgian army. “We were able to make a very good financial deal with them where we could rent this equipment,” Harlin told movie gossip site Aintitcoolnews. “In our biggest scene we had 80 tanks, we had six fighter jets, we had eight helicopters, we had 2,500 troops.”

“It was surreal to be standing on a hill with the head of the air force and land force and somebody else next to me with like three walkie-talkies and an army of translators,” Harlin added, “and me trying to figure out like, ‘Okay, in this scene how long does it take for the tanks to come over the hill? When do I start the troops? When do I cue the actors? When do I roll the cameras? When do I call for the helicopters?’”

Georgian president Mikheil Saakashvili invited Harlin to shoot in his office. Saakashvili even did a little casting. “We asked him, ‘Who do you think should play you in the movie?’” Harlin recalled. “[Saakashvili] said, ‘Well my favorite actor is Andy Garcia.’” Sure enough, the Cuban-American Garcia got the role.

Spoiler alert: Harlin’s take on the war reflects the Georgian point of view. “They were doing, economically, great,” Harlin said of the Georgians. “America built an oil pipeline across the country, and everything was really hunky-dory. Then [Russian president Vladimir] Putin just had enough of this and decided to stop it from happening and started destabilizing the country.”

Film critic Roger Ebert was unimpressed. “Here you will hear a great deal about the war, but learn not so very much, and all of that from the Georgian point of view,” Ebert wrote. “Mind you, I’m not saying its POV is wrong, only that a cheesy war thriller financed with Georgian funds seems an odd way to publicize it.”

Aintitcoolnews was less circumspect. “It’s great that you made a film again in the current day where we are allowed to hate Russians, like we used to in the ’80s,” the interviewer told Harlin.

See Also:

David Axe reports from war zones, shoots television and writes comic books.
Follow @daxe and @warisboring on Twitter.

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Saturday links: primal brains

The weekend is a great time to catch up on some of the reading you skipped during the week.  We hope you enjoy this set of long-form links.

Investing

TR, “To invest on the basis that something is always about to go wrong is the sign of an intelligent investor.”  (The Psy-Fi Blog)

What do you really want to get out of the markets?  (Kirk Report)

James Montier’s suggested investment reading list.  (Big Picture)

A look at J. J. Butler’s Successful Stock Speculation.  (Finance Trends Matter)

Companies

Why McDonald’s ($MCD) wins in every economic environment.  (Fortune via The Browser)

A look at the “dollar store economy.”  (NYTimes)

Banks are still poised to wreck the global economy.  (Spiegel Online via naked capitalism)

The future of business is sharing, not selling.  (The Atlantic)

Economics

John Kay, “Economists – in government agencies as well as universities – were obsessively playing Grand Theft Auto while the world around them was falling apart.” (FT)

The Industrial Revolution was largely an energy revolution.  (voxEU)

What exactly are “Chinese banks“?  (naked capitalism)

What France needs to do to save itself.  (Business Insider)

Peter Thiel has his sights set higher than Silicon Valley.  (Details via @longreads)

Health

How increasing longevity is going to change everything in our society.  (WSJ)

On the benefits of stress management.  (Scientific American)

Education

Why our “primal brain” can struggle in the classroom.  (Scientific American)

Why are Finland’s schools successful?  (Smithsonian)

Sports

Why rich guys like own NBA teams.  (Grantland)

On the “fierce intimacy” of tennis rivalries.  (NYTimes)

Mixed media

On the coming “bifurcation in digital content.”  (TechCrunch)

How hard is it to get a cartoon into the New Yorker?  (Slate)

Thanks for checking in with Abnormal Returns. You can follow us on StockTwits and Twitter.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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Sunday, September 4, 2011

Six Thrilling New Theme-Park Rides for 2012

Even though there are still technically a few weeks left in summer, Labor Day marks its unofficial end as the last few states send their children back to school. It’s never too early to start looking forward to next summer, though, and Six Flags is providing theme park fans with news that will get them through the year.

The theme park giant has revealed major new attractions coming to seven of their parks, so whether you’re on the East Coast, West Coast or somewhere in-between, there will be at least one new featured ride waiting for you when the parks open next year.

Goliath - (Six Flags New England – Springfield, MA)
This is a coaster truly deserving of its name, as it will be a giant new addition to Six Flags New England. A suspended-seat coaster, Goliath begins with an 18-story climb after which is releases riders into an unconventionally full vertical, face-down 65 mph drop. The coaster then rockets through a 102-foot-tall vertical loop followed by an enormous 110-foot-tall butterfly turn before rising up a second 19-story tower, after which riders will go through the entire trip again in reverse.

Goliath, a giant among coasters


X-Flight - (Six Flags Great America – Chicago, IL)

What looks to be the most innovative of all the attractions in the new Six Flags lineup, X-Flight is a wing coaster that has riders performing flight maneuvers such as barrel rolls and zero-g rolls. The coaster begins with a 12-story, 55mph drop and ends with a handlebar-clutching finish as a vertical flip leads through a keyhole cut-out. In order to sustain a feeling of flight through all of these twists and turns, X-Flight uses a floating seat system pictured below:

X-Flight's keyhole cutout finale

The full track layout for X-Flight

Superman: Ultimate Flight - (Six Flags Discovery Kingdom – San Francisco, CA)
While Six Flags Over Georgia and Six Flags Great Adventure got flying Superman coasters in 2002 and 2003 respectively, this new version of Ultimate Flight use a unique track layout rather than rotating cars to reproduce the sensation of flight. Billed as the tallest inversion west of the Mississippi, the new Ultimate Flight sports  a height of 150, speeds of 62 miles per hour, two upside-down twists and two vertical rolls over a track length of 863 feet.

Superman: Ultimate Flight

SkyScreamer – (Six Flags Over Texas – San Antonio, TX and Six Flags Great Adventure – Jackson, NJ)

A new thrill ride, rather than a roller coaster, is coming to both of these parks in Spring 2012 with SkyScreamer, a new adrenaline-pumping take on the classic swings family ride. In this version, riders will be swung in a 98-foot circle at 40 mph. The thrill comes once the entire ride crawls up a 200 foot tower, giving riders an incredible park-wide panoramic views.

SkyScreamer thrill ride

Another new thrill ride addition to the Six Flags Great Adventure complex will come to it’s sister property, the Hurricane Harbor water park. “The Falls” is a new slide tower where guests will climb into a clear, fully-enclosed “drop box” where the floor will release, sending riders straight down into a 32 mph water slide. Park president John Fitzgerald promises that “Drop boxes are an innovative, exciting addition to our already thrilling speed slides. They are not for the faint of heart.  The sheer anticipation of waiting for the floor to drop will have our guests’ adrenaline pumping.”

Apocalypse: The Last Stand – (Six Flags America – Baltimore/Washington, D.C.)

The world isn’t predicted to end until December 21st, 2012, so Six Flags America is aiming to give you a small preview. I don’t think the Mayans had anything quite this fun in mind, though. Apocalypse: The Last Stand is a stand-up steel roller coaster sporting a 100 foot ascent and 55 mph speeds. While neither of those stats are going to blow away die-hard coaster fanatics, a full two-minute ride time means that Apocalypse will be worth the wait in line for park-goers. The new attraction is set to debut on Friday, May 25, 2012 with a grand-opening celebration followed by a “fire in the sky” show later that evening.

Apocalypse: The Last Stand Apocalypse: The Last Stand

Lex Luthor Drop of Doom – (Six Flags Magic Mountain – Los Angeles, CA)

Another DC-universe themed ride, Lex Luthor Drop of Doom is a new take on free falls. The drop here is from 400 feet, which will send riders on an 85mph, 5 second plummet, after which a new magnetic braking system will bring the ride to a sudden stop just a few feet from the ground.

Lex Luthor Drop of Doom

All images courtesy of Six Flags Entertainment Corp.

Matt, an engineer, blogger, and father of one, has been a geek of all trades for twenty six years and counting. His wife maintains a list of his second-place accomplishments in life.
Follow @MattMorganMDP on Twitter.

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Magnolia Roadster's Vintage Styling Goes Green

Solutions to modern problems sometimes can be found in a distinctly classical place. The Magnolia Special was built to recapture the grace and romance of 1930s European roadsters — internal combustion and all — yet it emits 40 percent less CO2 than an equally powerful gas-burning automobile. And it does this using technology as old as internal combustion itself.

The Magnolia Special is the first bespoke, hand-built car built specifically to run on compressed natural gas. If nothing else, it proves eco-friendly need not mean boring.

“I really don’t think that environmentalists are worth a damn as car designers,” says J.T. Nesbitt, who designed and built the Magnolia Special. “They just lack passion. If the problem of global warming is left only to them, our cars are really going to suck.”

Nesbitt is a talented and passionate motorcycle designer strongly influenced by his adopted home of New Orleans. You may have seen his work ridden by Ewan McGregor in The Island. His representation of the arc of a whip, realized in a carbon fiber frame and fuel tank, created a motorcycle that perfectly fit into a high-tech future despite its old-school aesthetic.

Nesbitt is doing so again, this time for real, by capturing the beauty of the past in a vehicle relevant to the future.

Nesbitt started sketching the car in 2008. It’s his first take on an art-deco roadster theme. Think vintage Alfa Romeo or Jaguar and you won’t be far off. In fact, the car uses an engine based on Jaguar’s fabled 4.2-liter inline-six, the same one that powered the original E-Type. Nesbitt chose the engine because its torquey nature and strong internals work well with CNG. It also helps that the long, narrow engine looks great beneath the car’s louvered aluminum hood. It’s only making 200 horsepower, but with 300 pound-feet of torque, the performance won’t disappoint, particularly in a car that weighs just 2,700 pounds. That torque-to-weight ratio beats the Porsche 911.

“The Jaguar six only won Le Mans like what, five times?” Nesbitt says of the engine. “The 4.2 is such a great torque motor and CNG is really a torque fuel, so it’s a great pairing.”

Nesbitt says the octane rating equivalent for natural gas is 130, so the engine required specially forged high-compression 12.5:1 pistons and high-lift, short-duration camshafts.

“That setup allows the highly stable fuel to achieve complete combustion,” he says.

CNG is a popular conversion for fleet vehicles. But the gaseous fuel requires bulkier tanks than those designed for liquids. This presents a problem for automobiles, because the tank typically eats up a lot of space. By incorporating those tanks into Magnolia’s fundamental structure, Nesbitt made that drawback into an advantage: The tanks add torsional strength to the thin aluminum body. That’s a first in automobile design and construction, and a big part of what makes this vehicle so unique.

“The CNG storage tanks are really the only piece of high tech on this car,” Nesbitt says. “Everything else could have been made 100 years ago. They’re made from a carbon composite wrapped around an extruded aluminum core. The burst pressure is 4,800 PSI, but they’ll normally be filled to 3,600 PSI. They’re incredibly strong, yet very lightweight. I can actually pick one up and walk around the shop with it. That’s amazing.”

If CNG is cleaner than gasoline — the natural gas-burning Honda Civic GX is consistently ranked the greenest internal combustion car on the market — why isn’t CNG a more popular vehicle fuel? Nesbitt has a theory.

“In 1903, H. Nelson Jackson drove from coast to coast, cementing gasoline as the fuel that would power the automobile for the next century. You have to understand that back then there were gasoline cars, steam cars and electric cars, and no one was sure which would prove to be the standard. Jackson proved the viability of gasoline with his record-setting trek, and the rest is history.”

“I think that a true test of an alternative fuel now, just as then, must be endurance,” he adds.

With that in mind, Nesbitt and his friend Max Materne, who helped with the electrical engineering of the car, plan to drive the Magnolia Special from New Orleans to New York to Los Angeles this fall. He plans to prove the fuel’s viability and raise awareness of CNG along the way.

Magnolia’s 700-mile range — the equivalent of 30 gasoline gallons — will help, but finding CNG isn’t that hard. There are CNG filling stations coast-to-coast, and the average cost is 85 cents a gallon. If you have a natural-gas line at home, such as for your stove, you can even buy a converter to make your own CNG.

“Kinda cool to have your vehicle’s fuel bill show up every month on your utilities bill,” says Nesbitt, who fills up the car in his French Quarter studio.

So what’s a motorcycle designer, land-speed record racer and gasoline-fueled hedonist doing worrying about the environment? Hurricane Katrina awakened him to the need to address the causes of global warming.

“Magnolia stems from that concern, but satisfies my passion for real cars, too,” he says.

And make no mistake, this is a real car. Nesbitt built the boxed steel chassis himself. Then he called in Tim George, a renowned Porsche race engine builder, scooter racer and furniture builder from Denver, to help hand-form the aluminum body.

Despite the classic design, Magnolia benefits from thoroughly modern suspension. Up front you’ll find pushrod-actuated inboard coil-over shocks and rack-and-pinion steering. At the rear is a four-link suspension with adjustable shocks. Disc brakes are used on all four wheels.

A steel cage encases the passenger compartment for safety and the underside is sheathed in aluminum to increase aerodynamic efficiency. All the bodywork is easily removed via brass fasteners, making repairs a snap.

No detail has been left untouched. Just look at the steering wheel, sheathed in hand-tooled leather, and the gorgeous hand-turned aluminum dashboard. Another feature you don’t typically find in environmentally friendly cars: a five-speed transmission and posi-traction rear differential.

“Just think about how many custom cars get built in this country every year,” Nesbitt says. “All of that talent, effort and money. What if some of that were harnessed to solve greater problems? It seems like the guys who build cars are inherent problem-solvers and a truly underutilized resource in this country. Simply put, no one’s ever asked them to sit down and work on something like this.”

“We’ve all been sold this idea that to be green we have to be high-tech,” he adds. “I reject that notion. Now, I am not a technophobe, but you’ve got to concede that the future is not going to be a videogame. Things will still be mechanical, people will still work with their hands. There will always be room for craftsmen. I know that a digital wristwatch keeps better time than a wind-up equivalent, but there’s very little romantic connection to them. Electric cars may represent a piece of the environmental puzzle, but I have a hard time getting excited about electrons flowing through circuit boards. I like camshafts and pistons and valves. I like things that make a wonderful noise. CNG satisfies my love for that animation without the guilt of damaging the environment to such a significant degree.”

Nesbitt isn’t driven by profit, but passion. He has no plans to commercialize Magnolia.

“For now, the object is to have fun,” he explains. “I just want to be a part of the solution and make beautiful things in the process.”

Photos: Amy Jett Photography, New Orleans

The CNG tanks provide additional rigidity to the hand-formed aluminum body.

The Magnolia Special is replete with gorgeous details.


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The other shoe drops

The other shoe has dropped at Blackrock ($BLK).  Last week the company announced it was getting into the index business.  This week they filed with the SEC to launch non-transparent, actively managed ETFs.  With these two filings Blackrock is clearly trying to carve out an even bigger footprint in the ETF industry.

Olivier Ludwig at IndexUniverse has all the details on the filing.  The big surprise is not that Blackrock is interested in actively managed ETFs, but they are going to push forward using a non-transparent structure.  Ludwig writes:

BlackRock’s concept goes to the heart of an ongoing pursuit in the money management industry to provide strategies that aim to beat market benchmarks. A big part of that pursuit is a belief among managers that keeping portfolios secret gives them an edge over others in the market. Without that, they say, anybody can quickly steal their “secret sauce” and undermine their edge.

The question potential investors in these funds need to ask themselves is whether there is any “secret sauce” worth stealing at Blackrock or at the slew of other money management firms looking to get into the actively managed ETF space.  From a fund sponsor perspective it is clear why they are interested in actively managed, non-transparent ETFs.  Investors on the other hand should remain skeptical.  It is not altogether clear that putting existing active strategies into an ETF form is going to markedly improve their performance.

Prior posts on the topic of actively managed ETFs:

Teaching an old dog new tricks.  (Abnormal Returns)

Buy vs. build:  the ETF decision.  (Abnormal Returns)

ARTV on actively managed ETFs.  (Abnormal Returns)

Luck, persistence and fund performance.  (Abnormal Returns)

What ETFs are in your toolbox?  (Abnormal Returns)

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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