Foreign Hackers “Cripple” US Newspapers, Cause Widespread Delivery Disruptions

Foreign hackers infiltrated computer systems shared by several major US newspapers, “crippling” newspaper production and delivery systems across the country on Saturday, according to the Los Angeles Times, citing a source with knowledge of the situation. 

LA Times Olympic printing plant (Photo: doobybrain.com)

The attacks, which began alte Thursday night, appear “to have originated from outside the United States,” according to the Times, and resulted in distribution delays in the Saturday edition of The Times, the San Diego Union-Tribune, the Chicago Tribune, Baltimore Sun and several other major newspapers which share the same production platform. 

West coast editions of the Wall Street Journal and New York Times were also affected, as they are all printed at the LA Times’ Olympic printing plant in downtown Los Angeles. 

The hackers were able to disable several crucial software systems which store news stories, photographs and administrative information – which complicated efforts to make the physical plates used to print the papers at The Times’ downtown plant. 

“We believe the intention of the attack was to disable infrastructure, more specifically servers, as opposed to looking to steal information,” according to the source who wishes to remain anonymous. 

All papers within The Times’ former parent company, Tribune Publishing, experienced glitches with the production of papers. Tribune Publishing sold The Times and the San Diego Union-Tribune to Los Angeles businessman Dr. Patrick Soon-Shiong in June, but the companies continue to share various systems, including software.

Every market across the company was impacted,” said Marisa Kollias, spokeswoman for Tribune Publishing. She declined to provide specifics on the disruptions, but the company properties include the Chicago Tribune, Baltimore Sun, Annapolis Capital-Gazette, Hartford Courant, New York Daily News, Orlando Sentinel and Fort Lauderdale Sun-Sentinel.

Tribune Publishing said in a statement Saturday that “the personal data of our subscribers, online users, and advertising clients has not been compromised. We apologize for any inconvenience and thank our readers and advertising partners for their patience as we investigate the situation. News and all of our regular features are available online.” –LA Times

“We are trying to do work-arounds so we can get pages out. It’s all in production. We need the plates to start the presses. That’s the bottleneck,” said Director of Distribution, Joe Robidoux. 

The problem was first detected Friday, however technology teams were unable to completely fix all systems before press time. It is unknown whether the company has contacted law enforcement regarding the incident.

South Florida readers of the Sun-Sentinel were told that it had been “crippled this weekend by a computer virus that shut down production and hampered phone lines,” according to its website. The New York Times and Palm Beach Post readers in South Florida also failed to receive their Saturday papers since they use the Sun-Sentinel’s printing facility. 

“Usually when someone tries to disrupt a significant digital resource like a newspaper, you’re looking at an experienced and sophisticated hacker,” said Pam Dixon, executive director of nonprofit public interest research group the World Privacy Forum. 

Dixon added that malware has become more sophisticated and coordinated over time, involving more planning by hacking networks who work together to infiltrate a system over time. 

“Modern malware is all about the long game,” she said. “It’s serious attacks, not small stuff anymore. When people think of malware, the impression may be, ‘It’s a little program that runs on my computer,’” added Dixon. 

With modern hacking, “malware can root into the deepest systems and disrupt very significant aspects of those systems.” 

Animation: 200 Years Of U.S. Immigration

Submitted by The Visual Capitalist

If you walk down the streets in the United States, the odds are that one in every four people you’ll see is an immigrant, or was born to immigrant parents.

While those odds might seem high, the truth is nearly everyone in the U.S. hails from someplace else if you look far back enough.

Visualizing US Immigration

Today’s intriguing visualization was created by professors Pedro M. Cruz and John Wihbey from Northeastern University, and it depicts U.S. immigration from 1830 until 2015, as rings in a growing tree trunk.

The researchers turned registered U.S. Census data into an estimate for the total number of immigrants arriving each decade, and then the yearly figures in the visualization. One caveat is that it does not account for the populations of slaves, or indigenous communities.

From The Old To The New World

The pattern of U.S. immigration can be explained in four major waves overall:

The origins of U.S. immigrant populations transform from era to era. Which events influenced each wave?

FRONTIER EXPANSION: 1830-1880

  • Cheap farmland and the promise of economic growth in the first Industrial Revolution spurred large-scale immigration from Britain, Germany, and other parts of Central Europe.
  • The Irish Potato Famine from 1845 to 1849 drove many immigrants from Ireland over to the U.S.
  • The 1848 Treaty of Guadalupe ended the Mexican-American war, and extended U.S. citizenship to over 70,000 Mexican residents.

INDUSTRIALIZATION: 1880-1915

  • Immigrant mobility increased with the introduction of large steam-powered ships. The expansion of railroads in Europe also made it easier for people to reach oceanic ports.
  • On the other hand, the Chinese Exclusion act in 1882 prohibited Chinese laborers from entry.
  • In 1892, the famous Ellis Island opened; the first federal immigration station provided a gateway for over 12 million people.

THE GREAT PAUSE: 1915-1965

  • The Immigration Act of 1924 enacted quotas on immigrant numbers, restricting groups from countries in Southern and Eastern Europe, and virtually all immigrants of Asian origin.
  • The Great Depression, and subsequent World Wars also complicated immigration matters as many came to seek refuge in the United States.

POST-1965 IMMIGRATION: 1965-Present

  • The Hart-Cellber (Immigration and Naturalization Act) of 1965 overturned all previous quotas based on national origin. Family unification and an increase in skilled labor were two major aims of this act.
  • This decision significantly impacted the U.S. demographic makeup in the following decades, as more immigrants of Latin, Asian, and African descent entered the country.

While others have mapped two centuries of immigration before, few have captured its sheer scale and impact quite as strikingly. The researchers explain their reasoning behind this metaphor of tree rings:

This idea lends itself to the representation of history itself, as it shows a sequence of events that have left a mark and shaped the present. If cells leave a mark in the tree, so can incoming immigrants be seen as natural contributors to the growth of a trunk that is the United States.

Why Pimco Is Long The Bond Paying The World’s Highest Interest

Even after an expedited IMF bailout finally helped stabilize the Argentinian peso after a historic plunge, Argentina’s bonds have continued to languish as investors continue to brace for an inflationary tidal wave, while political instability has remained a factor as embattled former socialist leader Cristina Fernández de Kirchner (i.e. CFK) could return to power after next year’s election, dealing a major blow to international investors who predicated their bullish case on the business-friendly rule of President Mauricio Macri.

Argentina

Mauricio Macri

But all of this instability hasn’t stopped some of the world’s largest bond funds from hanging on to the country’s debt, which is paying the highest interest in the world (assuming the buyer hedged out that currency risk).

Case in point, Bloomberg reports that PIMCO and its parent company, Allianz, are holding an Argentinian note that pays a floating coupon equal to the country’s benchmark interest rate, which remains just below 60% after briefly climbing above 70% during the turmoil seen in Q3 and Q4.

ARS

While that payout is huge, in nominal terms, after shedding some 50% of its value earlier this year (it has since rebounded 7%), and adjusting for inflation, the peso’s decline would have eroded most of the return. Furthermore, consumer prices are on track to climb 50% in 2018, more than triple the Argentine Central Bank’s forecast for a 15% rise. The future remains just as bleak, with Argentina’s economy, which entered a recession this year, likely won’t pull out of it until the second half of 2019 according to analysts.

Fortunately for PIMCO, it’s EM desk had the good sense to hedge out at least some of that currency exposure.

Pimco hedged some of its currency exposure to the Argentine notes, according to a person with direct knowledge of the matter, who asked not to be identified because the information is private.

Because of this volatility, betting on Argentina takes “discipline”, and that buying these bonds should be a “long term play,” said PIMCO’s head of EM, which of course is what any PM says who is currently underwater on their investment.

“Emerging markets remain subject to both internal and external sources of volatility,” Mike Gomez, Pimco’s head of emerging market portfolio management, said in an email. “A disciplined and highly differentiating approach to the asset class provides opportunities for patient investors to benefit from dislocations that create compelling value.”

PIMCO owns roughly half of the notes in circulation. But it’s not the only major US-based investor with a significant stake. AllianceBernstein is the second-largest holder of the bonds, with 6.5% outstanding, and Goldman Sachs is No. 3 with 4.4%.

Slightly lower on the list is Franklin Templeton, with a 2.1% stake. Michael Hasenstab, who has been repeatedly bailed out by central banks on his hail mary bond investments in Europe during the financial crisis, and  whose $35 billion Templeton Global Bond Fund eked out a market-beating 2.1% gain this year, said he’s bullish on Argentina. “The peso already had its big selloff in late summer and early fall,” he said.

“We increased our exposure to capture the depreciated currency and significant increase in interest rates. The necessary adjustment measures were underway to stabilize the economy. The worst is behind us.”

Whether these bets pan out over the next year will ultimately depend – as all global markets do – on what happens in the US. If stocks continue to sell off and Treasury yields continue their move off the highs from October, the world could see the “carry is king” theme  reemerge.

If that happens, lagging Argentine bonds could finally get their moment in the sun, and PIMCO may be looking at the world’s highest (inflation-adjusted) return too.

Overflowing With Excess Inventory, US Companies Turn To Truck Trailers

While on the surface the latest Q3 GDP print of 3.4% was impressive, one quick look at its components revealed that the bulk of GDP growth came from inventories, which at 2.33% of the total number – the highest since Q4 2011, accounted for 69% of the annualized growth rate; in fact, stripping away the inventory contribution resulted in a concerningly low 1.1% GDP print, the lowest since Q4 2016.

As a result of this unprecedented buildup, the WSJ reports that U.S. companies are so flooded with excess inventory that some are renting truck trailers to use for storage space, parking them on warehouse lots or behind storefronts to hold goods until a surge in imports is cleared from crowded distribution hubs.

And in order to accommodate more customers seeking trailers to hold goods, many of them pulled in from China during 2018 to get ahead of impending tariffs, transportation equipment lessor Milestone Equipment Holdings has launched a “mobile warehousing and storage” business year, with companies such as Home Depot and several other major retailers and manufacturers reportedly using the service.

“It’s like a warehouse on wheels,” said Sarah Johnson, who heads the new mobile storage business at Milestone. “We now think about our trailers as more of a real-estate alternative than just a trailer.”

While the inventory surge in the last few months of the year is nothing new, as that’s when warehouse space is often eaten up as retailers stock up for the holiday season, the strains emerged this year as many companies boosted their reserves of imports to get ahead of a rise in tariffs, originally expected on Jan. 1 but later postponed to April.

Meanwhile, as virtually every US retailer is scrambling to compete with Amazon on delivery, warehouses have become a hot commodity, and across the U.S., warehouse vacancy currently stands at 4.3%, the lowest rate that real-estate firm CBRE has recorded since it started tracking the figure in 1980.

“Warehouses are running as full as they ever have,” said David Egan, head of industrial and logistics research for CBRE. Many companies build in flex space to their operations, in order to have room to expand during busier months, Mr. Egan said. “Now you’re seeing that excess space—and then some—is all being used,” he said.

Meanwhile, as noted above, while inventory accumulation was the biggest contributor to GDP growth in Q3, so far in the fourth quarter, intermodal rail-truck cargo has remained strong, with volumes surpassing 2017 levels, indicating a similar frenzied pace of inventory build-up. A large share of intermodal business is shipping containers moving inland from ports, and the continued strong growth in that business through the days before Christmas suggests companies were still clearing backlogs at seaports late in the year.

The warehousing shortage is so acute that a handful of Airbnb-like companies have sprung up to help major retailers get through busy periods. One of them, Flexe, offers warehouse tenants and owners the ability to sublease empty portions of their facilities to short-term tenants, which have included Walmart, Ace Hardware and others.

Truck trailers parked at the Port of Long Beach, California

Meanwhile, another problem was cropped up this year, making the shortage even worse as the onslaught of returned items, which started well before Christmas this year, had added to the challenge. In a recent study, CBRE found the supply chain for reverse logistics can require as much as 20% more space than what is required for outbound shipments.

According to the WSJ, Milestone said one national retailer has used as many as 1,000 of the company’s trailers to store returned goods. It’s a less expensive way to deal with what’s usually a temporary, postholiday challenge, rather than building a new warehouse or signing a longer-term lease for more space, Milestone’s Ms. Johnson said (although it begs the question if this year’s surge in returned goods is an indication of a bigger and more troubling theme, one where Americans purchase goods, hold on to them briefly, and then return them as they are unable to pay).

In any case, as the WSJ concludes, saving on storage costs will be critical in the coming months as U.S. businesses work through the stockpiled goods. And if economic headwinds accelerate and if the scramble to frontrun Chinese tariffs fades sharply as most retailers have already planned for a Jan 1 tariff hike which won’t take place until March 1 at the earlier, Q1 earnings for retailers could take a hit if companies discount prices to draw down inventory, and additional storage costs will only hammer margins further.

Iraq Is Next: Here’s Why All US Troops Could Be Out By End Of Trump’s 1st Term

Authored by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

The US presidential plane landed in the darkness of the Iraqi military base of Ayn al-Assad in west Anbar with Donald Trump onboard. But by the time his plane took off three hours later, Trump left behind a protocol-political-parliamentary storm in Mesopotamia as Iraqi members of parliament requested the departure of the 5200 US forces from the country.

None of the three Iraqi leaders (Prime Minister Adel Abdel Mahdi, Speaker Mohammad al-Halbusi, President Barham Salih) came to receive Trump as all three rejected US conditions for such a meeting. Trump seems determined to leave Syria without interfering with who will control the territory behind him: on Friday morning the Syrian Army entered the outskirt of the city of Manbij following a deal between Kurdish leaders and the government of Damascus. Will he also end up leaving Iraq before the end of his term in January 2021?

President Trump, accompanied by National Security Adviser John Bolton, first lady Melania Trump, US Ambassador to Iraq Doug Silliman, and senior military leadership, speaks to members of the media at Al Asad Air Base, Iraq. via the AP

In preparation for Trump’s visit, Iraqi prime minister Adel Abdel Mahdi was asked to meet the US president. He agreed to meet Trump either in Baghdad, on Iraqi soil, or at the Ayn al-Assad military base, on the Iraqi side of the base; Iraqi national security forces and army units are present at the same base where US forces are deployed, in a separate part of the base. To have met on the US-controlled part of the Iraqi-US base would have made Abdel Mahdi appear as an invited guest in his own country. 

A few hours before Trump’s arrival, US Ambassador Douglas Silliman told Abdel Mahdi that Trump would receive him in the US part of the base. Trump refused to visit Baghdad for a quick reception; neither would he even cross over to the Iraqi side of Ayn al-Assad, for security reasons. Abdel Mahdi refused the US invitation, as did the Iraqi president and speaker. All three politicians have risen in public esteem for having refused the US invitation. 

Trump’s disregard for protocol when landing in a sovereign foreign country has infuriated local politicians, heads of organizations and members of parliament. They felt insulted and have called for the withdrawal of US forces from the country. Others threatened to force US troops out of the country.

Qais al-Khaz’ali, the head of a parliamentary coalition and leader of “Asaeb Ahl al-haq” (responsible for killing US soldiers during their occupation of Iraq between 2003 and 2011), said “Iraq will respond (to the Trump insult) through a parliamentary demand that you pull out your troops and if you don’t leave, we have the (military) experience to force you out”.

Tension was increased by Trump’s announcement that he plans to keep his forces in Iraq and may return troops from Syria to the Iraqi base. “Hezbollah Iraq” responded immediately by pledging to “cut the hand that will hit Syria from Iraqi bases”.

The US president seems prepared to keep his promise to withdraw from Syria, at least in the case of Manbij. The US announced an “organized exit”, meaning withdrawal in coordination with Turkey so that Ankara’s forces could replace withdrawing US troops. Turkey has been preparing to enter Manbij and Tal Abiad by gathering thousands of forces and proxies standing at the borders of the Syrian province. Nevertheless, the deal reached on Thursday night between the Syrian government and the YPG Kurds gave the green light to the 1stand 5thdivisions of the Syrian army to take back Manbij, and raise Russian and Syrian flags over the city. This development is blocking the road for Turkey and its proxies to move into the province. The decision was communicated to Turkey via Russia.

Moscow is standing in the way of any change of power on the ground, refusing Turkey control of more Syrian territory not already included in the “Astana deal”, which conceded Turkey’s temporary jurisdiction in the region of Idlib. Russia believes there should be a natural handover of the Kurdish-controlled areas to the Syrian Army following US withdrawal. Damascus and Tehran are adamant in this case: only Syrian forces should replace US troops in al-Hasaka province.

Moreover, Damascus forces are still based in Qamishli and can easily take over control of all positions when the US withdraw its occupation forces from northeastern Syria. Already there are observation points (villages) under the control of the Syrian Army, some with Russian observers, in different villages around Manbij. These represent a clear message to Ankara that no troops can cross without Russian agreement, otherwise they will be bombed and attacked. The control of Manbij is a game changer and a clear indication that the government of Damascus will take control of al-Hasaka province to concentrate later on Idlib, after the US withdrawal, with the help of Moscow.

Russia called for an important meeting between presidential envoys, Foreign and Defense ministers and heads of intelligence services of both Russia and Turkey on Saturday in Moscow to talk about the US withdrawal and the role of each side. Another meeting (not yet final) is scheduled between Turkey, Russia and Iran in Moscow in a few weeks. The aim is to prevent any split between these leaders that could be triggered by the US withdrawal from occupied Syria. Damascus rejected the presence of the local Kurdish administration on its side and agreed to disarm the Kurds, a Turkish and Syrian request, after defeating ISIS. Indeed, the Kurds will help the Syrian army fight ISIS along the Euphrates river where a battle is expected to begin soon to end ISIS control of the area. As ISIS no longer enjoys US protection, the end of its occupation of a part of Syrian territory is near.

During negotiations with Russia, Turkey argued that the US might not allow the Syrian forces to move in. Turkey claimed that any changes to the deal established between Trump and Erdogan might alter the US decision to withdraw. Damascus and Tehran are indeed eager to see US troops gone from Syria, but not to deliver the area to Turkey. Russia supported Damascus on this position.

Ankara was indeed afraid that its unilateral decision to move into the Kurdish controlled area might trigger Russian intervention against its proxies (Euphrates Sheild, Jaish al-Islam, al-Hamza brigade, Ahrar al-Sharqiya and others), and might also lead Iranians to arm the Kurds and the Arab tribes in the province to prevent any further annexation of Syrian territory. The Turkish forces and their proxies currently occupying Jarablus, al-Bab, Afrin and Idlib, are unwilling to engage in a doomed war against the Syrian army, supported by Russia and Iran.

Turkey seems willing to accommodate Russia and Iran – the Turkish army and its Syrian proxies will never be able to cross the 500 kilometers from Manbij to Deir-ezzour where the richest area of oil and gas is. This area is only tens of kilometers distant from the closest Syrian Army position on the other side of the Euphrates river.

Russia asked Damascus and Tehran to lay down a strategy and coordinate with the Russian military to put forward a plan of action and a road map after US withdrawal, with the first priority of eliminating ISIS and avoiding any clash with Turkey if possible. The situation was very sensitive and complicated between these allies. With the return of Manbij, the situation seems to favor Syrian unity, marking the end of its partition or of any possible buffer zone.

Tehran believes the US won’t permanently leave the Levant and Mesopotamia without leaving unrest behind. This gives its officials an additional motivation to lobby the Iraqi parliament for a US withdrawal from Iraq.

There is no doubt that Iraq is a close ally of Iran and not a fanatic supporter of the US. The Iraqi parliament can exert pressure over the government of Prime Minister Adel Abdel Mahdi to ask President Trump to pull out US troops before the end of his mandate in 2020.

The US establishment and the “Axis of the Resistance” can both connive and plan, but the last word will belong to the people of Iraq and to those who reject US hegemony in the Middle East, those who can accept losses and nurse their wounds in hopes of a better future. 

Chinese Scientist Who Genetically Modified Babies Is Under House Arrest

The Chinese scientist who shocked the world by announcing he created the first genetically-edited babies, He Jiankui, and who had been missing since his accomplishment spawned widespread outrage around the globe, has been “kept” in a small university guest house, apparently under lock and key while guarded by “a dozen unidentified men”, according to the New York Times.

He was spotted for the last time in public in late November at a conference in Hong Kong, where he defended his actions. Over the past couple of weeks, rumors and speculation spread whether or not he was under house arrest. There has been no word from the Chinese government or his university, which placed him under investigation, about his whereabouts (or future).

For now, he appears to live in a fourth floor apartment in a university guesthouse on the campus of the Southern University of Science and Technology.

He achieved instant global fame (and notoriety) in November, when he claimed that he used genetically edited embryos implanted in a woman who gave birth to twin girls. At the conference, he presented data backing up his claims. However, his work was quickly denounced – not only in China, but also across the world – as a step too far. Chinese scientists said that the project focused too much on scientific achievement and not enough on ethical standards.

This past Wednesday, the doctor was seen on the balcony of his guest house, pacing back-and-forth. He could also be seen at one point talking to a woman who appeared to be his wife. It was observed that balconies attached to his apartment were fenced off by metal wiring. That same evening, four plainclothes guards stood outside of his apartment and when prompted, one said “How did you know that Professor He is here?”

It wasn’t clear whether the guards were from the University, the government, the police or some type of other organization. Police in Shenzhen did not respond to the New York Times’ request for comment.

A colleague who helped co-found He’s gene-testing company, Liu Chaoyu, confirmed his identity after seeing him on video.  According to another co-founder, Chen Peng, Dr. He is allowed to make phone calls and send emails. Chen stated: “He is safe. But I don’t know his exact whereabouts or what state he is in.”

Earlier, a local newspaper reported that He had been placed under house arrest, which prompted much of the speculation as to his whereabouts. However, the University has claimed that this was not the case, stating: “Right now nobody’s information is accurate, only the official channels are.”

The media in China has been surprisingly quiet about Dr. He’s situation after he published his findings a months ago, suggesting a censorship order had come from the very top. He was spotted watching television on Thursday and guards were observed on the floor of his apartment on Friday. There were also guards placed in the hallway leading to his former offices at the school’s biology department. In late December, the University issued a notice to his staff telling employees they were prohibited from taking interviews about anything regarding the genetically edited babies.

The notice, dated November 29, stated: “Do not discuss the contents or progress of the investigation, do not comment on the matter.” 

Dr. He’s colleagues didn’t seem to know that he was working on genetically edited babies. Dr. He was reported to have said “There will be big news,” while smiling, leading up to the conference where he made his announcement. His business partners have had to deal with the aftershock of his decisions.

Co-founder Liu stated: “He was extremely irresponsible to the employees, partners and investors. He did not discuss anything with us before he made his announcement and we had to deal with all of it unexpectedly.”