Report: Surveillance programs may cost US tech over $35 billion and its competitive edge

In the wake of Snowden's surveillance revelations, the US government has to balance security interests with risks to damaging US tech leadership worldwide, concludes the authors of an ITIF report. 

What long-term effect will the revelations about US mass surveillance disclosed by Edward Snowden two years ago have on the US tech sector?

Through inaction, the US government risks sacrificing the "robust competitiveness of the U.S. tech sector for vague and unconvincing promises of improved national security," argues the Information Technology & Innovation Foundation (ITIF) in a June 2015 report entitled "Beyond the USA Freedom Act: How U.S. Surveillance Still Subverts U.S. Competitiveness."

The report's authors, Daniel Castro and Alan McQuinn, raise an issue that ought to make US policymakers and US leaders stop and think:

"When historians write about this period in U.S. history it could very well be that one of the themes will be how the United States lost its global technology leadership to other nations. And clearly one of the factors they would point to is the long-standing privileging of U.S. national security interests over U.S. industrial and commercial interests when it comes to U.S. foreign policy."

Inaction on reforming mass surveillance and promoting transparency and data security worldwide puts US trade and its technology businesses at risk. In its report, ITIF describes the effect on US companies and the rise of protectionism resulting from the covert mass surveillance scandal.

The fallout for US companies

 In August 2013, just as the ink was drying from the press covering the initial Snowden revelations, ITIF estimated that the economic fallout for US cloud computing providers could run from $22 to $35 billion. In the two years since, ITIF noted that US technology continues to underperform due to mistrust of US government surveillance. They concluded that the long-term repercussions "will likely far exceed" the $35 billion figure from 2013.

The increasing lack of trust has even affected trade with closely aligned nations including the UK and Canada. A January 2014 survey showed that 25% of respondents in those two nations intended to pull their organizational data out of the US as a result of the National Security Agency (NSA) surveillance controversy.

Further repercussions affecting major US companies include the following.

Salesforce saw a leading German insurance firm cancel an agreement to manage a consumer database. In the fiscal quarter after the Snowden revelations, Salesforce saw short-term sales losses and a deficit of $124 million.

Cisco suffered sales losses in China, Brazil, and Russia due to a report that the NSA covertly placed surveillance tools into its hardware. In a quarterly earnings call, CEO John Chambers stated that the NSA was a factor in revenue declines in China.

Qualcomm has admitted that, despite growth projections in China, NSA revelations are hurting its business there.

Also in China, Apple, Cisco, Citrix Systems, and McAfee (Intel) were dropped from the approved purchase list for state enterprises; this was part of the wave of foreign protectionism ITIF cited that results from the NSA surveillance uproar.

Boeing in Brazil and Verizon Wireless in Germany were dropped from government contracts because of spying concerns.

Protectionism by foreign governments

In its report, ITIF described how in 2012 a Rackspace competitor in Australia, after Rackspace had built data centers there, argued that the US would use the Patriot Act as a way to track Australian citizens. That same Australian company also lobbied lawmakers, using a report it had funded, to convince them to place limits on foreign cloud providers. After the US spying revelations in 2013, protectionist efforts stemming from surveillance concerns have grown larger in Australia.

In Europe, the NSA backlash has led to calls for data localization laws, and procurement regulations that support European providers. Germany and France have started to build their own national networks: Schlandnet and Sovereign Cloud, respectively. In addition, France has invested $200 million in two startups to create an independent, domestic infrastructure.

Australia, China, India, and Russia have passed laws requiring that their citizens' personal information does not leave their borders, effectively mandating that international cloud providers build data centers in those countries. Apple and Salesforce have already done so to support their worldwide business and to respond to critics.

Due to the scale of its economy, and its own aspirations to be a global technology leader, the effects of protectionism in China could have the greatest impact on the US tech sector. In January 2015, the Chinese government adopted harsh new measures, compelling companies that sold to Chinese banks to submit their source code, agree to aggressive audits, and provide encryption keys in their products. Western companies saw these steps as a way to force them out of the Chinese market. Before that, China had already pushed for banks to stop buying from American firms IBM, EMC, and Oracle, a policy that the government pulled back from under US pressure.

Despite the inherent conflicts between an established superpower and a growing superpower, both the US and China have much to gain from increasing trade and stronger government relations. The trust needed to achieve and sustain that level of political and economic cooperation will not exist if the US government does not come clean on its surveillance practices and firmly close this murky, distasteful chapter in its history. Nor can the US argue in trade negotiations that others should "play by the rules" if the specter of mass surveillance casts a shadow over its global standing.

ITIF recommendations for US policy

To reverse the growing backlash against NSA surveillance and the fallout to the US tech sector, ITIF argues that US policymakers should:

Enhance transparency about domestic and international US surveillance.

Oppose efforts to place covert backdoors in software and weaken encryption.

Create mutual legal assistance treaties (MLATs) with other governments, which would permit law enforcement agencies to collaborate across borders. ITIF argues that if the US bypasses MLAT efforts and seeks to gain data on its own, the reaction will hurt US business.

Help to create an international legal standard on government access to data, what has been termed a "Geneva Convention on the Status of Data."

Pursue trade agreements like the Trans-Pacific Partnership, which was just passed by the US Senate, that ban IT protectionism.

Exceptional? Maybe. Invincible? No.

As naïve as those reforms might sound in the current political environment, it is wholly unrealistic to believe that the US government can continue its program of mass surveillance and not adversely affect the international reputation of US tech companies.

We can debate what US exceptionalism really means, but when it comes to economic matters and international business, the US is not invincible and never has been.

The US government can and does throw its weight around in political and military affairs, but trade and economics don't work that way. The US has to be fully aware of what adverse global public opinion can do to its tech sector, which predictably does not care for the hubris of the NSA's digital mass surveillance.

Nor can the US blithely assume that its technology leadership is safe and sound. The US has a growing challenge on the other side of the Pacific — China, a nation with a long, proud history that has the capacity, and the burning desire, to become not only the world's major economy but the next global tech leader.

Our trading partners and their consumers will not have much patience for the US government intransigence on reforming surveillance practices. The clock is ticking.

Download the full ITIF report "Beyond the USA Freedom Act: How U.S. Surveillance Still Subverts U.S. Competitiveness."

EN MI OPINION: Claro es claro y lo demás es…

Por: Ricardo Tribín Acosta

 

“Allá arriba en aquel alto hay un pozo de agua…clara”. Así decía mi padre cuando saludaba a su sobrina de igual nombre, utilizando su jovial “calambour” bogotano plagado de excelente humor, con una chispa agradable con la que adornaba su magnífico manejo del español.

 

Basados en el nombre de mi prima Clara, me sumo a la importancia de vivir en la luz puesto que, habiendo estado en ella gozando de los parabienes de tan grato estado, el retroceder hacia la oscuridad se siente incómodo y genera en un alto número de ocurrencias, situaciones que nada bueno nos conllevan.

 

Por ello es preciso evitar todos aquellos movimientos que nos conduzcan de la paz al conflicto; del amor al resentimiento; y de la tranquilidad a la lujuria, ya que la ocurrencia de hábitos y acciones negativas solo traen malestar e incomodidad, lo cual implica la necesidad de vivir centrados en lo bueno en cuanto nos sea posible.

http://ricardotribin.blogspot.com

Miami, Junio 24 de 2015

Greek debt talks appear to stumble

A hoped-for debt deal for Greece appeared to stumble Wednesday as Greek Prime Minister Alexis Tsipras suggested that international creditors did not accept the latest round of reform proposals from Athens.

Global markets, which have been gaining all week on expectations that a last-minute deal is likely, fell on the news.

In two posts on Twitter on Wednesday, Tsipras wrote: "The repeated rejection of equivalent measures by certain institutions never occurred before-neither in Ireland nor Portugal.

"This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed."

It was not immediately clear what caused the fallout after it earlier emerged that Greece and its international creditors have just a few remaining items to agree on before a deal can be done to break months of deadlocked debt-crisis negotiations, according to the nation's economy minister.

"There are two or three very specific issues, and as you appreciate it's the last part, three out of the fifty measures that have been agreed," George Stathakis told Greece's Mega TV.

He did not elaborate on what those issues were, but they are thought to involve changes to Greece's tax system and pension reform.

Stathakis expressed confidence, according to Reuters reporters who watched the broadcast, that an agreement on the latest proposals from Athens would be accepted — before a June 30 deadline — by Greece's governing leftist Syriza party as well as the nation's creditors: the International Monetary Fund, European Central Bank and European Commission.

"I think this balanced deal is defensible to Syriza, and in Greek society too," Stathakis said.

As Greece has attempted to restructure its economy to meet the demands of its creditors following the 2008 financial crisis, its GDP has shrunk 25% compared to pre-crisis levels and unemployment has fallen by a similar amount.

Greek Prime Minister Alexis Tspiras is in Brussels on Wednesday to meet with eurozone finance ministers to try to resolve any lingering differences ahead of a summit of European leaders there on Thursday, when a deal could be formally approved.

Without a deal, there are fears the southern European country could default on $1.8 billion loan repayment to the IMF that is due at the end of the month as part of a $270 billion financial assistance package Greece received during the financial crisis.

In order to stave off bankruptcy, Athens needs to ink a deal with its creditors so that it can secure the remaining $8 billion, frozen since February, that it is due in aid.

Analysts says Greece's membership of the 19-nation euro-currency bloc is at stake.

CEO says Pope’s Climate Views Will ‘Condemn People to Poverty’

Pope Francis is calling for action on climate change, claiming it is leading to human poverty -- but Murray Energy CEO Robert Murray told FOX Business Network’s Neil Cavuto the Pope’s views are “totally misguided.”

“There are 7 billion people on this planet, one half of them live in energy poverty. That means they don’t have the electricity. In India for instance, they don’t have the electricity for one light bulb in ... half of the homes. This Pope, to go out on a speculative subject such as global warming, he is condemning many more of these billions of people to energy poverty … He is misguided,” Murray said.

According to Murray, the EPA’s coal agenda has already caused the company to layoff almost 3,000 workers – or one-third of the workforce.

“I laid off people because the regulations are already in effect … [The layoffs were] based on the fact that the regulations from the Obama Administration, the U.S. EPA and the increased use of natural gas have eliminated our markets. If you don’t have a market you can’t mine the coal, you can’t sell it. This is heart-rendering to me,” he said.

Murray argues that the Pope’s agenda on climate change could lead to energy scarcity.

“We are seeing low cost electricity destroyed here. Now the Pope has decided to join this president and others and he is totally misguided here in condemning billions of people in this world to abject poverty,” he said.

Goldman to Summer Interns: Leave the Office by Midnight (BusinessWeek)

Goldman Sachs Group Inc. is telling its summer interns to take the night off.

Banking interns were instructed to leave the office by midnight and not return before 7 a.m., while also taking Saturdays off, Michael DuVally, a spokesman for the New York-based bank, said Wednesday.

Wall Street firms are attempting to reduce stress and improve conditions for their youngest workers. Goldman Sachs has increased salaries for junior employees and discouraged entry-level analysts from working weekends as many of the brightest college students seek careers in private equity or technology rather than investment banking.

Goldman Sachs hired just 3 percent of more than 267,000 job applicants last year, Chief Executive Officer Lloyd C. Blankfein said in February. Almost 90 percent of those offered a position chose to join, he said.

The new policy was reported earlier Wednesday by Reuters, which said Goldman Sachs has more than 2,900 summer interns this year.

EN MI OPINION: Ricardo Tribín Acosta

Tres Mensajes inspiracionales de Ricardo Tribin:

Un mensaje en el contestador automático

Alguien, quien anda en procura de cambios positivos en su vida, colocó el siguiente mensaje de voz para que lo escucharan aquellos que llamaban y no lo encontraran disponible en su teléfono “Hola, soy fulano, y en el momento no puedo contestar su llamada pues me encuentro ocupado en procura de hacer algunos cambios en mi vida que necesito para vivir mejor. Por favor deje un mensaje que, si no le respondo su llamada, es porque Ud. es uno de esos cambios”.

 

Amanecer y sentirse suave, relajado, no tiene valor determinable por monto alguno, ya que ello genera la calma que se necesita para emprender con paso firme un buen día. De ahí que el tesoro de la estabilidad emocional no tenga precio material alguno, aunque si mucha recompensa espiritual.

 

Sacudirnos de todo aquello que nos haga daño, llámense hábitos, maneras de pensar, trabajos, personas, vínculos , asociaciones, y así hasta el infinito, nos ayudará a sentar las bases de ese anhelado proceso de cambio que nos conduzca a pensar y a decidir descartar todo aquello que nos haga daño, incluyendo todo lo que nos contagie de negatividad.

http://ricardotribin.blogspot.com

 

Miami, Junio 17 de 2015

Uy que miedo…

El miedo es quizás una de las sensaciones más desagradables de experimentar ya que con el parece que las mentes y los cuerpos se paralizarán en ciertos casos y que las nubes en el horizonte se vieran bien negras.

 

Lo simpático, pero a la vez complicado, es que en un buen número de ocurrencias el miedo es generado por la propia mente nuestra siendo la inacción y el pesimismo claros componentes que resultan de tal estado.

 

Lo alentador, como una clara esperanza, es que el miedo confrontado con el cambio mental y la acción se puede vencer ya que, cuando hacemos algo por nosotros, y por superar lo que nos atemoriza, esto se constituye en el paso inicial para salir adelante y por ende hacía pensar en soluciones que nos sacarán de las colinas inciertas del temor.

 

Miami, Junio 11 de 2015

 

http://ricardotribin.blogspot.com

El inventario de uno mismo

En un libro maravillosamente escrito por Bill Wilson por allá en los años treinta y cuarenta, se hacen algunas preguntas dirigidas hacia aquellos quienes quieren y tienen la perentoria necesidad de cambiar para superar problemáticas que de otra forma seria casi que imposible lograrlo. Entre estas tenemos las siguientes: “Quién quiere ser rigurosamente honrado y tolerante? ¿Quién quiere confesar sus faltas a otra persona y reparar los daños causados? ¿A quién le interesa saber de un Poder Superior, y aún menos pensar en la meditación y la oración? ¿Quién quiere sacrificar tiempo y energía intentando llevar el mensaje de recuperación al que todavía sufre? No, al personaje típico común, extremadamente egocéntrico, no le interesa esta perspectiva—a menos que tenga que hacer estas cosas para superar su problemática y cambiar su propia vida.

 

Lo anterior enmarca perfectamente en un predicamento que afirma que " La vida no examinada, no merece ser vivida". De ahí que el inventario diario de lo bueno o malo que nos acontece es una magnifica herramienta de autoevaluación que nos ayudara a encontrar el camino hacia la mejoría y cancelación de diversos defectos de carácter.

 

 

A quién le gusta admitir la derrota total frente a una situación que le agobia y que no puede superar? A casi nadie, por supuesto, ya que a veces nos es difícil entregar los problemas a nuestro Poder Superior y dejarlos ir. Lo anterior no implica abandono ni pereza sino sencillamente que, cuando no podemos más nos rindamos ante el hecho y con una sincera oración ante nuestro Creador le pedimos con humildad y fe que nos ayude a superar aquello que tanto nos agobia. Es este es pues el comienzo del primer paso para salir adelante frente a diferente clase de dificultades que se nos presenten.

http://ricardotribin.blogspot.com
Miami, Junio 4 de 2015

Why America's $2.9 Trillion Medical Industry Still Runs on Paper Payments

Dealing with medical bills, like waiting for the cable guy or buying a used car, has become a cliché of consumer exasperation. Everything from electricity and phone bills to tax returns and parking tickets migrated to electronic payments years ago, but America's $2.9 trillion health-care economy remains stubbornly stuck in the 1990s. The number of medical bills paid by paper check through the U.S. mail has even increased while payments for all other services have decreased dramatically. Medical payments are the only category to register an increase in paperwork since the start of the 21st century: 

It’s not just consumers who are paying by mail. Just 15 percent of commercial insurers make payments to medical providers electronically, according to a report last month from PricewaterhouseCoopers Health Research Institute. The largest insurers are usually the best at going digital, but Cigna, with 14.5 million customers, sends only 39 percent of payments electronically. That's because many doctors aren't signed up to receive electronic transfers, according to spokesman Joe Mondy. Aetna and UnitedHealth Group, in contrast, both say around 80 percent of payments are paperless.

Hospitals, medical offices, and insurance companies need an army of workers to push all that paper1, which is also frequently shuffled through middlemen like billing agencies2 and clearinghouses3. One claims clearinghouse, Emdeon, which handles paper billing for many of its health plan clients, spent $87 million4 on postage alone in the first three months of 2015—nearly a quarter of its total revenue—according to financial filings. All this bureaucracy pushed the cost of administering private insurance to $173 billion5 in 2013, according to federal data.

But there’s also the human cost of sending people piles of indecipherable paperwork as they’re recovering from an illness or operation. “You pull your hair and you get frustrated. You don’t understand why it’s all paper and it’s all phone calls and you waste time and you get confused, and it’s all so broken,” says Tomer Shoval, chief executive and co-founder of Simplee, one of several companies trying to streamline medical billing. 

So what's taken so long for health-care payments to go digital? Inertia explains a lot of the delay. Doctors and health plans have to invest in technology to allow electronic payments, and smaller concerns—the solo practitioner or local health plan—may not think it's worth it. Many physicians have only recently switched to digital health records. And unlike other industries such as banking and telecom, where companies compete for customers on price, medical providers and health plans have long been able to pass the costs of their inefficiency onto customers with little consequence.

Then there’s the fragmentation of the health system. Thousands of hospitals, physician offices, health plans, and other parties act independently and don’t have incentives to coordinate. Athenahealth, which provides health records software to 62,000 physicians, developed a system to submit claims to insurers digitally before patients leave the office, so doctors could determine how much patients will owe and collect it on the spot. But only a tiny fraction of doctors use the system, says Athenahealth Chief Medical Officer Todd Rothenhaus, partly because only a handful of insurers participate.

Some say insurers benefit from the complexity: The harder it is to collect on a claim, the more likely doctors will stop chasing payment. “Arcane rules create a situation where doctors decide it’s not worth their time to collect the money,” Rothenhaus says.

There are some attempts to haltingly move the whole system to be more efficient. The Affordable Care Act limits how much insurance companies can spend on everything other than medical costs. If they spend too much premium money on administrative costs, they have to send rebates back to consumers. The law required health plans to be able to pay doctors with electronic transfers by January 20146.

The government also requires doctors who treat Medicare patients to accept electronic payments, and three-quarters of Medicare’s claims are paid electronically. As health plans with high deductibles become more common, patients are increasingly responsible for a larger portion of their bills. The easier those bills are to pay, the less bad debt doctors write off.

Startups are also trying to be part of the solution. Simplee works with more than 250 medical providers to make bills more understandable and easier to pay, while InstaMed is intended to connect providers, patients, and health plans on a secure network that can be used to settle payments electronically. Health plans pay a fee for the service, but co-founder Chris Seib says they make it up in savings on printing and mailing. "There’s just a straight business case to knock out paper, which there almost always is,” Seib says.

Many hospitals have already learned this. UMass Memorial Health Care, with four hospitals and 1,700 doctors in Massachusetts, has moved most of its payments from insurers online in the last 10 years. It's recently set up ways for patients to pay online too, and is experimenting with discounts for those who settle their bills quickly. John Salzberg, the hospital's vice president for revenue cycle, calls it a win-win. "Anything that we can do to help make the process of understanding and paying their bills easier for our patients is good for them and good for us also," he says. Only the post office loses.

FBI Public Service Announcement, June 11, 2015

June 11, 2015

Alert Number

I-061115-PSA    

 GIFT CARD SCAMS

While it is very popular to purchase, spend, and give others gift cards, the FBI would like to warn consumers of the potential for fraud. The online presence of the Secondary Gift Card Market has grown significantly in recent years. The Secondary Gift Card Market provides a venue for consumers to resell unwanted gift cards. However, criminal activity has been identified through sites facilitating such exchanges.

There are both online and in-store venues for reselling gift cards. Kiosks and pawn shops are an option for consumers who prefer to handle a transaction in person. Secondary Gift Card Market websites exist to exclusively buy and sell gift cards.

Some of the various types of gift card scams reported to the IC3 are as follows:

• Victim sells a gift card on an auction site, receives payment for the sale, and sends the PIN associated with the gift card to the buyer, who disputes the charge after using the gift card.
• Victim purchases an item on an auction site and is advised by the seller to purchase gift cards to pay for the transaction. After purchasing thousands of dollars in gift cards, the victim finds out the auction transaction is a scam.
• A Secondary Gift Card Market site agrees to pay a victim for a discounted merchant gift card. The victim sends the code on the gift card, and the payment for the transaction was reversed. Thus, the buyer uses the gift card code to purchase an item and stops payment to the seller.

Consumers should beware of social media postings that appear to offer vouchers or gift cards, especially sites offering deals too good to be true, such as a free $500 gift card. Some fraudulent offers may pose as Holiday promotions or contests. The fraudulent postings often look as if a friend shared the link. Oftentimes, these scams lead to online surveys designed to steal personal information. Never provide your personal information to an unknown party or untrustworthy website.

Tips to Prevent Gift Card Fraud:

Consumers can take several steps to protect themselves when buying and selling gift cards in the Secondary Gift Card Market, as listed below:

• Check Secondary Gift Card Market website reviews and only buy from or sell to reputable dealers.
• Check the gift card balance before and after purchasing the card to verify the correct balance on the card.
• The re-seller of a gift card is responsible for ensuring the correct balance is on the gift card, not the merchant whose name is on the gift card.
• When selling a gift card through an online marketplace, do not provide the buyer with the card’s PIN until the transaction is complete. Online purchases can be made using the PIN without having the physical card.
• When purchasing gift cards online, be leery of auction sites selling gift cards at a discount or in bulk.
• When purchasing gift cards in a store, examine the protective scratch-off area on the back of the card for any evidence of tampering.

If you believe you have been a victim of a gift card scam, you may file a complaint, providing all relevant information, with the IC3 at www.IC3.gov.

Salvation to Catastrophe: What Might Happen to Greece

The Greek saga has haunted policy makers for more than five years. Now talks are deadlocked, banks are on life support and time is running out.

With financial doomsday drawing ever closer in Athens, everyone from creditors and investors to depositors is increasingly focusing on what's next.

Some things are clear:

• Greece owes the International Monetary Fund about $1.7 billion this month.
• In July and August, the European Central Bank is due almost 6.8 billion euros ($7.6 billion).
• The euro-area backed bailout program expires on June 30, with creditors refusing to release up to 7.2 billion euros in remaining funds before Athens complies with belt-tightening conditions.

With time running out to close a deal, the German government has begun planning for a Greek default, according to Bild newspaper.

If you're waiting for a clear resolution to the country's status in the 19-nation monetary union, you may wait a long time. Adopting the euro was always supposed to be a one-way ticket, so there is no legal precedent or political roadmap for an exit.

Next steps for Greece range from retaining the euro to catastrophic divorce. Half-measures are also on the cards, such as having multiple currencies circulate, with aid recycled to repay foreign-currency debts.

Equally unclear is who would tell the world - and how - that Greece has entered an economic afterlife. Possible messengers include Greek Prime Minister Alexis Tsipras, European Central Bank President Mario Draghi, European Union President Donald Tusk and European Commission President Jean-Claude Juncker. There could be others.

We asked economists, investors and former policy makers what could happen next – and how it might unfold. 

Scenario A – Grexit Avoided

Tsipras, whose Syriza party won January elections promising to undo the tough terms of the bailout loans, capitulates to creditor demands.

Faced with a choice between effective expulsion from the euro area or implementing austerity in exchange for loans, Tsipras takes the cash. The ECB maintains its support of the financial system.

Scenario A – Grexit avoided: Euro membership is secured as new loans are used to repay the ECB and the IMF and coffers are replenished

 

Photographer: Louisa Gouliamaki/AFP via Getty Images

While aid flows, the government's days are numbered as its most hardline supporters mutiny. A new coalition is formed with backing from the pro-European opposition and Syriza's moderate flank – or elections are called.

Greece's continued euro membership is ultimately secured as new loans are used to repay the ECB and the IMF and the country's coffers are replenished. Greece gets easier repayment terms on bailout loans. This helps tame the popular backlash against the new wave of fiscal measures. However, the cuts attached to the agreement suppress economic output, delaying Greece's recovery from the longest recession on record.

Scenario B – Hotel California

Greek Finance Minister Yanis Varoufakis has described euro membership by using a lyric from the famous 1976 Eagles song: “You can check out any time you like, but you can never leave.”

Tsipras might fail to strike a compromise acceptable to the German government, Communist factions of his Syriza party, and stakeholders in between. Somehow, though, he manages to keep Greece officially in the euro.

Bailout loans – Greece's only source of funding – remain stalled. With Europe's political leaders unwilling to proceed, the ECB rations Emergency Liquidity Assistance, the lifeline keeping Greek banks afloat.

That requires the imposition of capital controls – as there isn't enough cash to meet demand – following a bank holiday.

We're calling the two possible outcomes from here “somersault” and “check out.”

Scenario B1 – Somersault

Greece's Cash Crisis: Are Capital Controls on the Way?

Capital controls mean that limits are placed on withdrawals and transfers. The dramatic consequences force Tsipras to compromise. Opinion polls show that most Greeks – between two-thirds and three-quarters of the population – want to stay in the euro area “at any cost”.

“You can check out any time you like, but you can never leave”

Tsipras forges a new coalition with opposition lawmakers of pro-European parties. A referendum, carried out amid capital controls and with banks shut, gives him a mandate to reverse course. A unity government is formed and Greece remains in the euro, but not before the disruption triggers a new recession.

Scenario B2 – Checking Out

With banks shut, the political situation deteriorates and a popular uprising intensifies, with Germany targeted as the country's main antagonist. Polls show a swing in favor of breaking from the euro area.

Capital controls give the government the space and time to print either a new currency or IOUs for domestic payments. The new scrip quickly plunges, reflecting the weak fundamentals of an economy that has shrunk by about a quarter since 2008.

Euro-area governments give Greece a “sweetener,” a parting-loan in hard currency. The rationale is to avert total economic collapse, which would create a failed state in a strategically critical region.

Scenario B2. With banks shut, the political situation deteriorates and a popular uprising intensifies

 

Photographer: Kostas Tsironis/Bloomberg

Greece’s debt to public entities is restructured, providing for the repayment of loans to the IMF, either through the euro area’s crisis fund or from the departure credit. Greece remains shut out of debt markets.

Most Greek companies and banks default. Some bank deposits are seized to recapitalize a shattered financial system, or redenominated to the new legal tender equivalent. The sovereign debt restructuring of 2012 has already ensured that the state won’t have to pay principal on most of its existing loans to private investors and the euro area for the next few years and until the economy stabilizes.

Both the new paper and euros circulate. Greece may not officially leave the euro zone – the door is open to a return in good standing – though the country sputters in a financial purgatory.

Scenario C – ‘C’ for Catastrophe 

Greece separates from the euro area in a messy default, amid demonstrations and deepening misery for most, with the government blaming everything on the Germans.

No help is provided to support a new currency and to keep servicing bonds and IMF debt. That triggers cross-default clauses to all creditors. The government and banks collapse, meaning that years will be needed before a new structure emerges.

Greece's economy plunges into a second depression. The blow from the biggest default in the history of capitalism drives Europe back into a recession and heaps pressure on vulnerable euro countries such as Italy.

Scenario C, Catastrophe. The tumult casts doubt on Greek membership in NATO. A new -- and unstable -- government turns to Russia for support

 

Photographer: Sasha Mordovets/Getty Images

Bad blood leads to Greece’s departure from the European Union. The idea that the euro is irreversible is thrown into question, rattling global markets.

The economic implosion paves the way for extremists, from either the left or the far right, to take power. Those who can, flee the country.

The tumult casts doubt on Greek membership in NATO. A new – and unstable – government turns to Russia for support, providing a Mediterranean outpost for Vladimir Putin.

FCC to Allow Cable Companies to Raise Rates Without Local Approval

FCC Chairman Tom Wheeler.

Cable providers including Comcast Corp. can raise customer rates without approval from local governments under a change adopted by the U.S. Federal Communications Commission over opposition from broadcasters.

States, cities and other localities lost oversight of basic programming packages on a 5-0 vote by the FCC led by Democratic Chairman Tom Wheeler said an agency official briefed on the matter who requested anonymity because the result hasn’t been made public.

Currently, cable companies seek FCC approval to escape local rate-setting. Requests are almost always granted: the agency says it approved all but four of 224 since 2013.

With the change, the FCC will assume cable companies deserve to escape local rate regulation. It falls to jurisdictions to ask for permission to retain that power.

The FCC said it was changing its 22-year-old rule because the market has changed, with nationwide competition from satellite television. Neil Grace, an agency spokesman, in an e-mail called the proposal “a common-sense update for today’s video marketplace to reduce regulatory burdens on all cable operators -- large and small.”

Grace declined to comment on the vote because the result hasn’t been announced.

Comcast, the nation’s biggest cable provider, said only about 17 percent of its subscriber base was subject to rate regulation by local government.

Programming Packages

Most U.S. jurisdictions today have power to regulate rates for basic programming packages, according to policy groups including Common Cause and Free Press. Consumers Union told the FCC that “there is little evidence to suggest that today’s cable marketplace is a competitive one” given subscription rates rising faster than inflation.

Cable companies backed the move, saying it eliminates needless red tape.

Broadcasters fear cable companies can now assign TV-station signals to pricier tiers, cutting the audience for local programming, said Dennis Wharton, spokesman for the National Association of Broadcasters trade group.

The change cuts requirements for uniform rates across a locality, and lets cable companies offer any number of programming tiers before customers can order premium and pay-per-view offerings, said an FCC advisory panel.

Congress asked the FCC to simplify procedures for small cable companies, and Wheeler’s change provides “unnecessary regulatory benefits to large cable companies,” 13 U.S. senators, all Democrats along with one independent, said in a May 12 letter to Wheeler.

Consumers may see higher rates and fewer channels in the lowest-cost program packages, said the senators including Al Franken, of Minnesota.

There is competition in “virtually every community,” the National Cable & Telecommunications Association said in filings. Comcast is a member of the trade group.

Blatter’s Departure Signals Sweeping Overhaul of Global Soccer

Sepp Blatter’s sudden resignation threw wide open the future of world soccer.

Even as the drumbeat for Blatter to step aside intensified, he dug in his heels after winning a fifth term as FIFA president last week. Then, just four days later, the embattled 79-year-old hastily scheduled a news conference on Tuesday afternoon in Zurich to say he had had enough.

His departure creates both an unexpected opportunity and deep uncertainty at FIFA, an organization battered by decades of scandal. U.S. prosecutors are looking into Blatter as part of their sweeping corruption probe that resulted last week in a 47-count indictment against FIFA executives and other soccer figures, people familiar with the investigation say.

 

“It’s been going on for so long,” said Jon Doviken, a former deputy secretary general of FIFA who was ousted after being part of a group that tried unsuccessfully to unseat Blatter in 2002. “I had predicted that people would have to carry him from that office. He is in love with FIFA.”

In remarks that followed Blatter’s blockbuster announcement, Domenico Scala, the independent chairman of FIFA’s audit and compliance committee, vowed major reforms to the soccer organization. Scala also said FIFA will disclose the president’s salary, a closely held secret under Blatter.

“Nothing will be off the table, including the structure and composition of the executive committee and the way in which members of the executive committee are elected,” he said. Currently, the executive committee consists of the FIFA president, eight vice presidents and 15 members, appointed by the six regional confederations and 209 member associations.

Empire Crumbles

Blatter’s $1-billion-a-year empire started crumbling as soon as Swiss police acting on U.S. extradition requests roused senior officials from their beds in a luxury hotel last week.

“Although the members of FIFA have given me a new mandate and re-elected me president, this mandate doesn’t seem to be supported by everybody in the world of football,” Blatter said Tuesday in Zurich.

Michel Platini, a former Blatter lieutenant turned critic, is the man considered most likely to lead soccer's governing body into a new era, with U.K.-based William Hill making him favorite at odds of 6-5 to be the next FIFA boss. The former French national team player and coach, who heads European soccer governing body UEFA and called on Blatter to quit last week, said in a statement Tuesday that the president's announcement was ``a brave decision and the right decision.''

‘Positive Change’

Blatter’s announcement represented an “exceptional and immediate opportunity for positive change,” U.S. Soccer President Sunil Gulati said in a statement. “I commend him for making a decision that puts FIFA and the sport we love above all other interests.”

Blatter’s decision could jeopardize Qatar’s plan to host the 2022 World Cup, which has been sharply criticized because of the Middle Eastern country’s scorching heat, human rights abuses and lack of soccer tradition. The odds of Qatar, a country about the size of Connecticut, losing rights to the world’s most watched sporting event were slashed to 5-4 from 5-1 on Tuesday by U.K. bookmaker William Hill.

Qatar is spending about $200 billion on infrastructure for the event. A Twitter statement on behalf of Sheikh Hamad Bin Khalifa Bin Ahmed Al-Thani, president of the Qatar Football Association, said “we welcome the office of the Swiss attorney general conducting its own work into the bidding process” for the 2022 World Cup.

Controversial Tenure

Responding to Blatter’s resignation announcement, Prince Ali bin al-Hussein of Jordan, who was Blatter’s only challenger in last week’s presidential election, told CNN that he was “at the disposal of all the national associations that want change, including many who were afraid to do so before this day.”

It emerged Tuesday that FIFA’s No. 2 official under Blatter authorized a $10 million payment that a prosecutor characterized as a bribe. U.S. prosecutors say that person was Jerome Valcke, a person familiar with the matter said.

Reaction to Blatter’s resignation from around the soccer world came swiftly, from Russian disappointment to elation among other European countries.

“His resignation came as a surprise to me,” Russia’s Sport Minister Vitaliy Mutko said, according to the state-run Tass news service. “From Blatter’s statement it is clear that he wants to save FIFA, awaiting further reforms.”

Russian President Vladimir Putin, an outspoken supporter of Blatter, has criticized the American criminal investigation as an attempt to oust Blatter and undo Russia’s selection as host of the 2018 World Cup.

Many nations were less forgiving.

New Era

“We have all the time stated that FIFA needs a new leadership -- that it is time for Blatter to step down,” Karl-Erik Nilsson, chairman of the Swedish Football Association, said in a statement on its website. “He’s now doing that, and we think that’s good.”

Anxious Sponsors

Blatter’s announcement could mollify anxious sponsors, several of whom expressed concern over the recent round of indictments and vowed to reassess their relationship with FIFA.

The Coca-Cola Company, a major FIFA sponsor, said Tuesday in a statement that Blatter’s decision was “a positive step for the good of sport, football and its fans.”

Visa, also a major FIFA sponsor and one that was harshly critical after last week’s indictments, said in a statement posted on Twitter that it was “encouraged by the recognition by FIFA that extensive and fundamental reform is needed as reflected by the announcement that President Blatter is resigning.” And the Adidas Group said in a statement: “Today’s news marks a step in the right direction on FIFA’s path to establish and follow transparent compliance standards in everything they do.”

Technical Officer

Blatter joined FIFA as a technical officer in 1975 and was first elected to succeed Joao Havelange as president in 1998. During that time, Blatter witnessed 10 World Cups on five continents over four decades at FIFA.

As president, FIFA’s income ballooned -- the latest World Cup tournament generated almost $5 billion in revenue -- and more than $1 billion of that was shared with member nations via so-called “solidarity” programs.

A trip to Ethiopia in 1976 ultimately led to his biggest achievement, taking the World Cup to South Africa in 2010.

“This World Cup for him, it’s like a mother with a baby,” Walter Gagg, a FIFA aide and a friend for four decades, said in a 2010 interview. “For him, this will be his legacy.”

At the same time, FIFA’s reputation was battered by successive crises as Blatter suppressed criticism of the organization. In 2004, he said public interest in women’s soccer would grow if players wore “tighter shorts” and later compared player trading to “modern slavery.”

His handling of the 2001 collapse of the organization’s marketing partner ISL was called “clumsy” in a report by FIFA’s ethics head that Blatter eventually cleared for publication in 2013. It said Blatter’s predecessor and mentor, Havelange, received bribes from the defunct marketing company. Other senior FIFA board members were also named.

FIFA’s reputation sunk even lower after the 2010 vote for Qatar and Russia, and Blatter’s successful presidential campaign a year later. After his only opponent, Qatari Mohamed Bin Hammam, withdrew following accusations of trying to bribe voters, Blatter secured the post for a fourth time.

He said the term would be his last and he would rebuild FIFA. With FIFA still mired in crisis, Blatter backtracked, saying he would go on. He tried.

(Earlier versions of this story corrected the amount Qatar is spending and the size of the nation’s GDP.)