Archive for September, 2011

Z for Zambezi

September 24, 2011

When a political party chooses a boat for its emblem, Lunghu takes notice.  And when they win a presidential election by defeating their well-financed incumbent opponent, Lunghu’s gotta mention it.  So hats off to King Cobra and the Patriotic Front of Zambia!

Zambian President Rupiah Banda has conceded electoral defeat to opposition leader Michael Sata.  Mr Sata, who has run for the presidency four times, was declared the winner [Friday morning] after polling 43% of the vote.  
Known as “King Cobra” for his venomous tongue, [Sata] has frequently criticized foreign mining firms –often from China– about labor conditions.  While the party has disputed media reports that it is anti-Chinese, his election is likely to shake up the way contracts are awarded. … Mr. Sata has promised to re-introduce a windfall tax on mining profits and to promote policies that will bring greater benefit to poor people. 

Sata’s dislike of Chinese influence in Zamba doesn’t appear to be mere xenophobia or racism.  Instead, it’s more likely to be a combination of reflexive antipathy to neo-colonial exploitation of Zambia’s natural and human resources … and good, old-fashioned international power politics.  According to the BBC, in Zambia’s 2006 election “there were reports –denied by Mr. Sata– that Taiwanese businessmen backed him.”

President-elect Sata has several personal characteristics that make the Anglo-American investor class quite nervous.  The Zambian currency, the kwacha, dropped to a 12-month low against the US dollar following Mr. Sata’s victory.

  • He worked as a policeman, a railway worker and trade unionist before entering politics in 1963.
  • He is a devout Catholic married to a doctor.  [Can liberation theology and nationalized health care be very far away?]
  • In the past, he has praised Robert Mugabe’s policy of seizing white-owned farmland in Zimbabwe:  “Mugabe hasn’t done anything wrong. It is the imperialists, the capitalist-roaders who say he is a villain.”

This doesn’t exactly sound like a leading candidate for running-dog lackey of the imperialist bourgeoisie.  But look on the bright side:  if populist democracy and a peaceful electoral process are what it takes to loosen China’s grip on Zambian copper, does the London-New York axis of capital really have substantive grounds for complaint?  This is a terrific opportunity for the UK and USA to deploy soft power in the service of their respective nations’ interests.  How about pitching in on a slew of rural development projects close to King Cobra’s heart?  Goodwill ambassadors from the NBA and Premier League –associated with specific, tangible initiatives like paving roads, assisting agriculture, improving transport, or purifying water supplies– can generate headlines and make a favorable impression in the hearts and minds of Zambia’s youth.  Just a fleet of bicycles could be huge.  And it wouldn’t hurt to clean up your act in the mining industry, either.

There are times when only one cox’n is one too many:  you just gotta shut up and row the boat.

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Absent Friends

September 22, 2011

DSK wasn’t invited.

...wearing the lapel badges of their respective lodges.

Forget About Us/ Put the Blame on Me

September 20, 2011

Note to Rick Perry:

Lunghu doesn’t insist that Barack Obama throw Israel under the bus, but WakingtheDragon would definitely like to see Netanyahu and the rest of his criminal crew serve as wheel chocks while we back-and-fill out of the quagmire they’ve dragged us into.  That would be a good start toward getting Lunghu’s vote in 2012.

So, Mr. President  –be bold, show some leadership, learn from the example of Russia & China, and don’t veto that Security Council resolution when it comes up for a vote.  Otherwise, Team Obama will be seen to fold in the face of craven politicking by the GOP, blatant extortion by AIPAC, and duplicitous manipulation orchestrated by those puppeteers lodged in the shadows.

What’s the alternative?  Articulate the compelling vision of a new Middle East that includes a Palestinian state  –because there will be no peace wthout one.

Oh.  One more thing.  Is Lunghu the only guy around who finds it extremely coincidental that Turkey has been experiencing a series of terrorist bomb attacks shortly after it challenged Israel on the issue of aid convoys to Gaza?   Sure, you could always blame it on the usual suspects –the PKK– in light of Turkey’s recent heavy-handed incursions against Kurdish rebels based in Northern Iraq, but on the other hand maybe not …  Remember Iskenderun!

‘Bout Time

September 19, 2011

Summer vacations are over, the Labor Day holiday has come and is long gone, lumpen proletariat and kapitalists alike are back to their thankless toil, so the praetorian guard and awful machinery of justice must demonstrate its might.  What the hell is Lunghu talkin’ ’bout?  Viktor Bout, that’s what!

That’s right, the Merchant of Menace is back in the news.  Sort of.  After a motion hearing here and there, jury selection has begun in the terrorism conspiracy trial of Viktor Bout.  The trial itself won’t start until October 11th, so there’s plenty of time to review (scant) recent developments, speculate about the future, and generally refresh our collective recollection of the ongoing drama  … on several of its many levels.

  • In a mid-August ruling on the admissibility of evidence, Judge Shira Scheindlin warned “that she would not allow [prosecution] mention of countries like Libya, Liberia and Rwanda … because references to those nations could prejudice the jury.”  However, “certain witnesses would be allowed to testify that Mr. Bout directed pilots to deliver weapons and ammunition to Angola and the Congo in the 1990s.
  • During the same hearing, Judge Scheindlin ruled thatsome of the statements made by Bout during his arrest in the US-Thai sting operation had been coerced with threats and therefore could not be used in the trial.
  • Jury selection began after Labor Day (and is still under way).   Finding ‘impartial’ jurors untainted by media hyperbole may be difficult:   “This is an easy case to Google.  All you have to do is get the spelling right,” remarked Judge Scheindlin when reviewing motions by defense and prosecution about how jury selection should proceed.  [ Perhaps it’s not all that big a problem:  as many as one-third of Americans are believed to be functionally illiterate.  That spelling thing might just be an insurmountable obstacle.]
  • Ultimately, “Scheindlin ruled on the dozens of questions that will be [ asked of ] jurors in an attempt to weed out bias against [Bout].  Questions to the jury pool will include details on [ potential jurors’ ] ties to Russia and Colombia.
  • Scheindlin ruled against prosecutors who wanted to show the jury an Instant Messenger exchange in which Bout and an unidentified correspondent known only as ‘Think Big’ discussed anti-aircraft missiles.  “I have no idea who ‘Think Big’ is,” the judge said.  [ Really, Shira?  Lunghu has a pretty good idea who ‘Think Big’ might be.  Not so much an exact name as a general occupation, mind you, but still … ]

The biggest news about the Bout trial is that it’s not news:  there has been very little media coverage of these pre-trial judicial proceedings.  You can see for yourself by Googling the story, just as Judge Scheindlin suggests:  only RIA Novosti, Agence France Presse and the New York Times have had stories on the topic during the past two months.  In a way, that’s not surprising.  Preliminary motions aren’t exciting or sensational, so why bother?  And for all Lunghu knows, there’s also a gentlemen’s agreement among the New York press not to provide any grounds for future claims that prejudicial media coverage impaired the fairness and impartiality of jury deliberations.  Gotta make sure a conviction sticks if your reporters want to continue getting the inside scoop from the US Attorney’s Office SDNY.

In any case, the pace of this trial may not be entirely dictated by a moral imperative to exact swift justice for a grievous wrong.  Lunghu thinks there are grounds to consider the possibility that the Bout trial has been timed to affect (no, he didn’t use the term ‘destabilize’) the presidential election process in Russia.  If Viktor Bout has embarrassing (or incriminating) things to say about prominent members of Russia’s siloviki, the United Russia party (aka Vladimir Putin) has to be concerned about nominating candidates susceptible to American judicial blackmail or economic sanctions.  Whether you’re concerned about losing the ‘prestigious’ Confucius Prize to the Panchen Lama, or having your ill-gotten billions frozen in Swiss banks, it can’t be fun to wonder what Viktor Bout might be saying about you in New York.

Since Lunghu thinks Bout may have already said quite a bit, it is not entirely surprising that United Russia has not yet declared its choice of Presidential candidate.  Instead, Medvedev and Putin have spent the past several months dropping non-hints that provide no real indication of their actual intentions.  On the one hand, this gives the opposition (such as it is) nothing to run against except things-as-they-are, but on the other hand this persistent ambiguity and political uncertainty makes a lot of people nervous (even within United Russia).  Those Russians who believe that Dimi and Vladi are genuine rivals have to agonize over which side to choose (while being ready to jump to the other side of the fence at a moment’s notice).  Others, who see Medvedev and Putin as the true tandem they often claim to be, either wish them both gone (the opposition view), or hope they’ll rule Russia for another century (the siloviki).

Lately, even Putin has had to implicitly acknowledge that the ol’ one-two-rope-a-dope has become a bit threadbare.  Hence the most recent development in Russia’s ongoing election saga farce:  last week Finance Minister Alexei Kudrin (Vladi’s personal money-launderer?) told journalists that he’s ready (if asked) to serve as Prime Minister in the next administration.  Kudrin even donned the mantle of reformer (Russian-style) for the occasion:

“If reforms need to be carried out, I am ready to work with a government that is headed by a person who is ready to do that,” Kudrin told the Reuters Russia Investment Summit. “But I repeat, I will work [with the government] only if reforms are carried out.”

He said that it is necessary to seriously conduct reform of housing and public utilities, engage in the protection of property rights, [institute] more objective arbitration of disputes, reduce the state’s share in businesses, [carry out reductions in] public administration functions, and increase the authority and independence of [Russia’s] regions and municipalities. Reform must begin with strategic planning, which will assess the options: to raise taxes or cut spending.

Itar-Tass solemnly noted that United Russia’s deputies in the Duma “very much dislike Kudrin and have constantly criticized his actions (e.g., raising taxes and the retirement age).  [However,] if Putin becomes president and nominates Kudrin, United Russia will hardly reject him, a high-ranking government official said.”   [ Hint, hint. ]

Meet the new boss, same as the old boss.

Ahn to the Next

September 6, 2011

In Korea, there is such a thing as a free lunch.  Sort of.  For children. In school (where Korean children are often known to be found).  And that free lunch can determine the course of political careers in the nation’s capital:  last month the mayor of Seoul, Oh Se-hoon, resigned his officeafter failing to block an opposition-led free school lunch program in the city’s first-ever referendum.

Seoul will have an election on October 26 to choose a new mayor.  Mr. Oh had served 14 months of his second four-year term after winning re-election last year.

Mayor Oh was attempting to follow the Lee Myung-bak/GNP playbook for political success:  demonstrate your management and leadership skills as mayor of Seoul; build a financial base for future campaigns by sponsoring a huge public works program that will bind construction companies close to your bosom; prove your allegiance to the interests of Korea’s elite, and (with their support) succeed to the Presidency in a year’s time.  Didn’t quite work out as planned, because the little people got in the way.  As in the United States, those little people aren’t at all happy with politics-as-usual.  Which is why the leading (undeclared) candidate to replace Oh was (until today) a physician-turned-entrepreneur-turned-academic with no previous political background.  (Koreans just can’t help turning to yangban scholars in times of crisis.)

Ahn Cheol-soo, 49, a doctor-turned-computer expert who founded South Korea’s best-known anti-virus software firm Ahnlab, is widely popular, especially among young Koreans, due in part to his clean image. Surveys have put him well ahead of other possible [mayoral] contenders from both the ruling and opposition parties … Ahn received nearly 40 percent support among Seoul residents.

But wait!  Ahn “announced Tuesday that he has decided against a run and will instead back a leading liberal activist, Park Won-soon, in the upcoming election.”   What factors might lie behind this sudden withdrawal from the public stage?   Lunghu thinks it’s at least mighty coincidental that a major chaebol media outlet ran two prominent stories just yesterday:

Ahn Cheol-soo Keeps Private Life Private
Kim Mi-kyung: Much More Than the AhnLab Founder’s Wife

Among the interesting lines in these articles:

His private life has largely been off-limits.  Even some friends only know that he lives near the financial district of Yeouido but not the exact address.

Ahn does not have a cell phone and apparently communicates by e-mail.  His wife, SNU professor Kim Mi-kyung, said in one media interview, “If I don’t know where my husband is, I do an Internet search.” (c.f. Bernadette Chirac)

Kim was a respected pathology professor for 15 years at Sungkyunkwan University and Samsung Medical Center.  In 2002, she suddenly quit and went to the U.S. to study law … [at the] University of Washington, was admitted to the bar of California and New York after her J.D. in 2005, and then worked at Stanford Law School’s Center for Law and Biosciences.

Many people in Korea think Ahn is a model husband to let his wife go abroad to study at the age of 40.  But she smiles and said, “He didn’t oppose the idea, but he wasn’t passionate about it either.”

What is it that Chosun Ilbo is trying so hard NOT to say?   Perhaps (as usual) some pictures will provide an unspoken explanation.

In case you were wondering, the Chosun Ilbo “is generally considered to represent the conservative element of South Korean society.”   In that capacity, its editorial outlook is almost always aligned with the programs and candidates of the GNP.   Lunghu’s gonna guess that Park Won-soon won’t have Chosun Ilbo’s endorsement on October 26th.

Arbeit Macht Drei

September 5, 2011

Special Labor Day edition –dedicated to all those hard-working guys and gals on the shores of Tripoli.

When dynasties fall/ old titles must go
— Water Margin

The building was relatively undamaged by air strikes. Its rooms had instead been broken apart by people searching through cabinets and closets.
— Al Jazeera

Welcome to Phase Two of the Libya Campaign –Tripoli: the Afterparty.  All kinds of messy things occur on the cusp of regime change:  summary executions, dramatic (almost miraculous) changes of allegiance, interruptions of food distribution and utility services, and (best of all) the sudden revelation of jealously-guarded intelligence secrets.  Sometimes (and this is one of those times) the manner in which those secrets are revealed is just as revealing as the secrets themselves.  Or perhaps more so.

Let’s take a quick look at the way various world media outlets have reported the Libyan rebels’ seizure and occupation of Gaddafi’s intelligence headquarters.  In the chaos of the battle for Tripoli, journalists and NGO workers had partial (guided) access to various buildings in the intelligence compound.  They poked through the offices of the defeated(?) regime, viewed (and in some cases spirited away) abandoned intelligence files, and took photographs or video for posterity.  What has been made public thus far?

Al Jazeera :
Influential Americans tried to help Gaddafi cling to power
Gaddafi Had Spies in Rebel Camp

Al Jazeera’s reporting emphasizes current or recent events.  One story highlights “a top-secret document …found in a sealed envelope… that appears to be a briefing for Libyan intelligence mastermind Abdullah Senussi.”  To Al Jazeera, the intell report suggests that “Gaddafi had spies at the highest levels of the rebel movement.

However, in focusing on the here-and-now, Al Jazeera does not ignore international dimensions to the Libyan revolution.  Its initial story described a meeting in which Bechtel executive David Welch (former Bush regime ASecState) counsels Gaddafi underlings on their damage control options.  The same story cites other documents which purport to describe efforts by Congressman Dennis Kucinich (D-OH) to assist the Gaddafi regime.

BBC :
The official state media provides a bland, superficial gloss:

“the documents illuminate a short period when the Libyan intelligence agency was a trusted and valued ally of both MI6 and the CIA.”

The Guardian (UK) :
Spies at the top of the rebel movement
Sir Mark Allen: the secret link between MI6, the CIA and Gaddafi
Libyan papers show UK worked with Gaddafi in rendition operation
NTC Commander Abdul Hakim Belhaj demands apology over MI6 and CIA plot

The Guardian concentrates its extensive coverage on Britain’s intell cooperation with Gaddafi’s government, and some of the aftermath:

“Sir Mark Allen Allen, formerly MI6’s director of counter-terrorism, left MI6 in 2004 … to join BP, for which he later helped arrange lucrative oil and gas contracts in Libya.”

The Independent (UK) :
Gaddafi, Britain and US: A secret, special and very cosy relationship

In-depth review of Libya-UK rapprochement in 2003-2004 and beyond.  Much of the story’s focus appears to be on heaping opprobrium and blame onto Tony Blair’s Labor government of the time.

New York Times :
Files Note Close CIA Ties to Qaddafi Spy Unit

NYT [1] distances itself from the material by attributing its provenance to “journalists and [NGO] Human Rights Watch;” [2] focuses the story on “ancient history” –Bush-era rendition activities of the CIA; [3] subtly develops the sub-theme of Islamist extremism within some elements of the NTC; and [4] mentions but minimizes the involvement of MI-6 in rendition of Islamist suspects to the Gaddafi regime.  Must have been all the news that was fit to print.

“While most of the renditions referred to in the documents appear to have been CIA operations, at least one was claimed to have been carried out by MI-6.”

Los Angeles Times :
CIA once handed key Libya rebel figure to Kadafi, documents show

Quotes a retired CIA official affirming Abdel-Hakim Belhadj’s extremist credentials.  To show its fairness and balance, the LA Times also presents Belhaj’s side:

He said his group had rejected overtures to affiliate with Al Qaeda and that Libya’s new government will not be Islamist.
“We believe that Libya should have relations with all nations,” Belhadj said at his heavily guarded seaside complex in Tripoli. “We Muslims need to interact with all other nations, and all other religions. This is what Islam tells us.”

Washington Post :
Gaddafi assisted CIA rendition efforts

Its only coverage of this story is an AP reprint:

“An embarrassing example of the U.S. administration’s collaboration with authoritarian regimes in the war on terror.  The documents mention a half dozen names of people targeted for rendition, including Tripoli’s new rebel military commander, Abdel-Hakim Belhaj.”

The Post’s own reporters prefer to focus on political developments in Tripoli, and accentuating the positive.  The head and subhead:

Reining in Libyan rebel commanders: civilian rulers take control of military chiefs in effort to ease internal strains and curb Islamist influence.”

What can we learn from this?  Several things.  First, the chaos of regime change is the perfect time to run a disinformation operation, so there’s no guarantee that all of the documents conveniently exposed for journalistic review at ESO headquarters are actually genuine.  Maybe they are, and maybe they’re not.  Lunghu can envision a scenario in which the Tripoli representatives of various competing intell agencies had to take turns planting fake documents in ESO offices once the buildings were captured.  Perhaps they drew up an access schedule in advance, in the spirit of international cooperation which has thus far distinguished the Libyan revolution.

why is this file upside-down? ... and what USED TO BE on the shelf below?

Second, regardless of the authenticity/veracity of this document trove, NTC decisionmakers are likely to take future action as if much of the material is true (minus whatever disinformation they themselves fed to Gaddafi’s intell crew).  This implies that certain nations and corporations may well be viewed with less favor than others by a governing NTC.  The primary goal for all the NATO/EU players sniffing at Libya’s oil is now to minimize their past sins and emphasize their current sanctity.  In this respect, France (despite being tainted by association with Ben Ali in Tunisia) can plausibly claim to have mostly steered clear of Gaddafi.  Italy, Germany, Britain, the USA, Russia, and China –not so much.

... just make sure you count your fingers afterwards.

 

Third, let the games begin!  The desert dust has far from settled in Libya.  The moving and shaking, deal-cutting, back-stabbing, coalition-building and tit-for-tat assassination have only just started.  Each of the major European and Asian powers has its own set of favored sons whose factional interests they will seek to promote:  the last ones left standing will be in charge of Libya’s territory, polity and natural resources.  Naturally, their external allies –who see themselves as sponsors but are viewed by Libyans as a temporary expedient– will seek recompense for prior services and assistance.  The bargaining should be interesting to watch.  In’shallah.

 

Sacré Bleu

September 4, 2011

Lunghu doesn’t often talk shop on this blog, but when he does … XXpect the unXXpected.

The occasion for this brief(?) departure from precedent is provided by two IBM acquisitions during the past week:  i2 (a British software house) and Algorithmics (a French-owned Canadian firm).  What does this mean?  Why should Lunghu care?

Let’s take these rhetorical questions in reverse order (sort of).  First and foremost, these acquisitions resonate for Lunghu because i2 dominates the market in law enforcement/ military intell analysis network visualization tools with its Analyst’s Notebook product.  This software generates graphical representations of criminal/ terrorist network structures, communications, and relationships.  It also has features for depicting multi-thread timeline event flows (such as those that occur during the course of a criminal conspiracy or terrorist plot).  In theory, such data visualizations can accelerate, improve or refine the process of intelligence analysis itself, but in the real world i2 charts are primarily used as a storytelling device, to explain a complex conspiracy to bonehead bosses or arrogant, self-important prosecuting attorneys.  Far too often, Analyst’s Notebook is used to produce a bogus corporate-style “table of organization” that purports to illustrate the network’s so-called (and sometimes imaginary) command-and-control hierarchy.

Lunghu has been using various versions of i2 software for about a dozen years, and he’s delighted that IBM has bought the company.  That’s because i2’s software –from an intell analyst’s viewpoint– pretty much sucks, and now there’s hope (however faint) for real improvement once some Armonk coders get their heads under the hood of this creaky old British jalopy.  Here’s a brief enumeration of the principal defects that a longtime user sees in i2’s flagship product:

  • Analyst’s Notebook’s market niche is in depiction/ visualization of network relationships –”link charts” in intell-speak.  However, the software has no social network analysis tools —nothing to assist in exploring network structure.  The software doesn’t have features to help the analyst identify cliques, cut points, k-cores … nada. Instead, users/analysts have to manually impose their own structure on the data visualization by dragging nodes to new locations on the chart.  i2 apologists might claim (with some jsutification) that the LE/mil intell industry doesn’t want all that high-falutin’ pointy-headed academic analysis capability  –it just wants to know who to go out and shoot.  So Lunghu poses the question: which is a better downrange use of your expensive munitions  –spray-and-pray or sniper fire?
  • Analyst’s Notebook generates only flat, 2D representations of mixed-mode network relationships.  It doesn’t have the capability to depict the interrelationships of multiple networks in a “layered” visualization –something that an i2 executive dubbed “2½ D” when Lunghu tried to explain to him why that would be useful.  It has a kludge that lets the user selectively filter out entire categories of nodes, but this feature is only marginally useful.  Analyst’s Notebook also cannot readily depict changes in a network over time – a 4D capability that is highly relevant to many aspects of intell analysis.  The current software requires the analyst to generate two (or more) 2D charts at different timeslices, and then (like a spectator at Flushing Meadows) scan back and forth between them hoping to notice all the changes.
  • Analyst’s Notebook link charts cannot be exported from the program to other applications: not as graphics, not as PostScript files, not as meaningful datasets, nothing.  This really annoys the military, which wants to see everything in a Powerpoint slide for briefings to command.  A grainy lo-res screenshot of your link chart doesn’t overly impress the 3-star, and makes your captain look bad.
  • Representation of network nodes is icon-based, which is okay as far as it goes, but the standard icon set looks dated, cheesy, and Brit-centric.  The software is picky about what types of graphic formats it will accept for substitute icon images, and does not allow image files to be substituted for node icons: they can only be superimposed on the icon, obscuring but not replacing it.  This means that when you want to represent a person, place or thing as a node on your chart, you can’t just use a filename or hyperlink for the visual representation of that node –you have to laboriously navigate a menu-driven wizard to select the file and place it on the chart.  Then you have to use another menu tool to tweak the formatting, size, etc.  For each such image …
  • Analyst’s Notebook is not well equipped to handle communications analysis.  Granted, that’s outside the scope of general intell industry practice at the national level in both the USA and UK, where NSA and GCHQ handle SigInt for the big boys.  However, within law enforcement, it is often the grassroots intell analyst who has to handle analysis of call records and intercept data.  The market leaders in this sub-niche are PenLink and JSI, both of whom focus most of their development efforts on administration of wiretap information: data collection, storage, and (generally) rudimentary reporting.  i2 has carved out its own space by specializing in the visualization of telecom data, basically as an extension of its link charting feature.  But as with social network analysis, i2 is weak on providing actual analysis tools to deal with telecom data.  Its principal product offering in the telecom analysis space is PatternTracer 2, which the company asserts …

Automates pattern analysis tasks within telephone call data
Identifies communication patterns happening around events of interest
Identifies repeating groups of calls (clusters) and patterns of calls within these clusters (the telecom equivalent of market basket analysis)

Lunghu’s principal problem with this tool is that it’s [1] outrageously expensive for what it does, [2] an opaque blackbox that uses algorithms of unknown precision and reliability, and [3] it doesn’t allow the user/analyst to specify, tweak  or weight any of the parameters used in analysis.  It’s not encouraging that i2’s sales and training staff has difficulty explaining what PatternTracer does and how it does it.  The good news is that these deficiencies inspired Lunghu to write his own telecom data cluster analysis subroutine … which actually works as intended!  And, since Lunghu knows what the algorithms are, and can specify the parameters before each analysis run, he has much more confidence in its output.  And guess what —the data can be imported into Analyst’s Notebook for visualization.  Fortunately for America’s civil liberties, no one cares and he never uses it.

But enough about i2 …

What’s the meaning of these IBM acquisitions in the larger picture?  Conventional wisdom might well have it that this investment in data analytics is a defensive move on IBM’s part, a reaction to HP’s purchase of Autonomy or Google’s recent buying spree (PostRank, PittPatt, etc.).  Lunghu thinks not.  Instead, these acquisitions suggest a keen awareness of the operating environment –and market opportunity– on IBM’s part.  Let’s review the bigger picture:

❖  The post-9/11 defense boom is just about over for the worldwide military/industrial complex.  Bucketloads of counter-terrorism money from DoD, DIA, and CIA gave new life to i2 just as its core law enforcement market was approaching saturation, but the bust cycle is about to begin in that corner of the ‘security’ industry.  i2’s technology is showing its age, but it’s still a recognized brand name in government and industry, and that’s what IBM bought.

Algorithmics, incorporated in Delaware as Fitch Risk Management, Inc, is a member of Fitch Group, majority owned by Fimalac, a holding company based in Paris, France. Fimalac is around 80 percent owned by its Founder, Chairman and CEO, Marc Ladreit de Lacharrière.  Algorithmics is the world’s leading provider of risk solutions for market, credit and operational risk.  Financial organizations around the world use Algorithmics software, analytics and advisory services to help them make risk-aware business decisions, maximize shareholder value, and meet regulatory requirements.  Twenty-five of the top thirty banks and more than two-thirds of the CRO Forum of leading insurers use Algorithmics analytics software and advisory services. Clients include The Allianz Group, BlueCrest, HSBC, Nedbank, Nomura, Societe Generale, and Scotia Capital.

Algorithmic’s focus on credit, market and liquidity risk, as well as key customers in operational risk, will strengthen and expand IBM’s risk consulting services.  Algorithmics risk analytics software and services, combined with IBM’s acquisition of OpenPages and recent investments in predictive analytics, will provide clients with the broadest range of business analytics solutions.

❖  To summarize, the salient features of this newly-acquired IBM capability are [1] Anglo-Franco-Canadian-American business presence and corporate relationships; [2] market leading position in law enforcement intell and investigative-support analytics and [3] market leading position in financial industry risk analytics.

❖  So, where do the vectors of law enforcement, finance and risk assessment intersect?  Market surveillance, oversight and regulation, that’s where.  Lunghu believes that these acquisitions are an indication that IBM has (or hopes to have) the inside track on a massive technology support contract for an in-depth SEC/ FINRA/ CFTC/ Fed/ Treasury market surveillance and enforcement program.

Of course, this could just be wishful thinking on Lunghu’s part, since he believes such measures are long overdue.  But there certainly are signs that the US regulatory authorities may finally be beginning to walk the walk behind their somewhat tougher talk.  Stated intent from SEC, FINRA, et al. indicate that securities fraud, insider trading, market manipulation, tax evasion and related criminality are once again high enforcement priorities.  In order to investigate far-flung transnational criminal networks operated by and for the speculative degrees, regulators need network analysis capability.  In order to detect market manipulation within the gushing torrent of global trading data, regulators need risk analysis and pattern matching capabilities.  Without in-house expertise to develop such capabilities themselves, they’ll have to buy or lease it from someone who already has the capability.  A trusted vendor with whom government has had a century of  experience.  Someone like Big Blue.

Further afield, the inclusion of British and French components within IBM’s analytics effort may indicate that the United States is undertaking this market surveillance/enforcement initiative in actual, concerted partnership with regulators in London and Paris.  By insuring that everyone’s interests are represented to some degree or another, you build a measure of trust and get additional buy-in.  Kinda like Libya, Part Deux.

Best of all, for IBM this is an opportunity to expand markets in both the public and private sectors.  Financial industry players who are operating in grey areas of the regulatory space (and that would be just about all of ‘em) may well see the benefit of hiring the services of IBM’s risk consulting group … just on the off chance of catching hints about what capabilities the feds might be developing.  That’s what counter-intelligence is all about.  And on the public sector side, there’s no need for IBM to confine itself to federal government.  Each of the 50 states operates an employee pension fund and a bond financing department.  Plenty of risk to be assessed there.  Plenty to be investigated, too.  If individual states can’t afford IBM’s consulting fees (and most states are deeply in the red), perhaps they can pool their resources and take a regional approach.  At least, that could be IBM’s sales pitch.

Will any of this occur as Lunghu has foretold?  Who knows?  On verra, on verra ça. … Mais pas çe soir.  Demain, demain, toujours demain.