The Ghost of Richelieu laments the humbling of France – Asia Times

Full beneath the drains of Paris, the lamp I brought from Temu had eluded a few levels above the subterranean museum where I made my way to the underground ossuary of the Carthusian priests.

I clenched my telephone between my teeth while its light guided me along the niter-covered walls while holding a large of Chateau Margaux in one palm and a large copper trashcan in the other.

I stumbled with twisted languor until I felt the sticky dirt of the ossuary surface as the destroyed marble steps of the staircase began to sway under my feet. The long-dead Carthusians ‘ stacked heads grinned at me.

When suddenly, I kept tryst with the Spirit of Cardinal Richelieu, winner of the Thirty Years War and designer of France’s 200- time supremacy on the European continent.

I waited until what seemed like an eternity before the next finger on my see suddenly appeared at night and spittoon into the olfactory ooze below. I poured the Margaux into the spittoon, drank, and patiently waited.

The wine was sucked into the windows as the French dying escaped. I identified Marshal Ney and General Weygand, the defeated captain of the Battle of France, as eyes on him as they commanded the back watch during the Grand Armee’s disastrous retreat from Moscow.

I waved them aside until a gloomy haze appeared on the surface. It injected a spectral beak into the constricting opening, absorbed the Bordeaux, and therefore extracted its scalp with an audible roll before popping its head out.

” I warn you”, said the Spirit in his Maurice Chevalier voice. ” I am in a nasty feelings”.

” Eminence”, I ventured, “what will become of France? It seems uninhabitable. Less than 15 % of the votes cast for the European Parliament were cast by President Macron’s gathering next Sunday, and half of the votes were cast by the Rassemblement National. The polls put his party at only 19 % in next month’s snap elections for parliament. What will become of Macron’s promise to send European troops to Ukraine”?

” C’est plus qu’un violence, c’est une faut”, hissed the red Spirit. ” It’s more than a murder. It’s a wrongdoing, as I used to say”.

” Begging your pardon, Eminence, you did n’t say that. It was Introductory”.

” Eh bien”? Richelieu sneered. ” I did n’t have to say it, because I did n’t make that kind of blunder. Not every strategy I devised was successful but I was n’t stupid enough to fight Russia, like Talleyrand’s expert Napoleon. The Russians will just have more chance for target practice with a few thousand Legionaries and a dozen redundant Mirage fighters. It is a small movement made by a small person.

” But why is Ukraine but essential to Macron, Eminence? Why chance his reputation by “playing a poor hand”?

” Irrelevant”! thundered the Cardinal. ” France has become unimportant! It will become a distributor of expensive clutches for China’s new wealthy and a destination for Taiwanese tourists! Although its greatness has vanished, the aristocracy of France also harbors the self-importance of the past.

” But why meaningless”? I pressed.

The “elite of France” is aware that when Ukraine is unable to battle, they may find themselves in a world where their services are no longer needed. No one sector of the economy excels in France. It has less than half the level of business technology found in China, Japan, or Germany.

It exports a fifth of the German auto industry’s sales and produces poor cars. &nbsp, It may engage with the Chinese. Germany will swiggle to the west as the Eurasian landmass tilts toward China, leaving France as the priestly tail of a receding European Community.

” Eminence, I am profoundly confused. What does the giving of French troops to Ukraine have to do with this?

” You are as thick as often, Spengler. Do I have to spell it out for you? Germany may repurchase Russian oil once more and open the door to China, just as the Hungarians have done, if Ukraine is humiliated. It will take advantage of China’s great initiative to create a global South, automakers will continue to integrate with their Taiwanese counterparts, German investors will be able to buy from its factories in China, and Mittelstand will export its goods to markets prepared by Taiwanese infrastructure.

” Eminence, Macron said that a Soviet success in Ukraine ‘ may reduce Europe’s trust to zero,'” I offered.

No simply: It would render France’s credibility a zero, and one could say the same for Italy, but it has no trustworthiness at all. Charles DeGaulle was nevertheless persuaded two generations ago that the French had fill the gap between the Americans and the Soviets.

Macron now wants to ostensibly maintain the National attempt, so he at least has a seat at the table. In reality, Macron tried to resolve between Russia and Ukraine until the very last moment, hoping that the Minsk II sacrifice may stop the Ukraine conflict, like the Germans. But now he’s tied to it and terrified by the thought of being humiliated by the United States.

” Eminence”, I asked, “is that why the French voted against him”?

They chose Macron because his trust has already been eroded, according to the statement! thundered the Cardinal. ” The French do n’t want to fight in Ukraine. They may win a battle whose failure may be humiliating. In Ukraine, they lack the people and the tools to change things. It is an empty, helpless, foolish gesture. Macron is the film version of Napoleon, if Napoleon I was horror and Napoleon III was folly. The French may accept fraud, conscience, arrogance and perhaps fight but they cannot stomach Canard Donald as their leader”.

” You were the most brutal leader France always had, Eminence: Is there any chief who might raise France out of its lethargy”?

” Hélas”, sighed the ghost. ” The issue, it is the French themselves. They do not want to have kids but they do not like refugees, either. They do not need China to overshadow their business, but they also do not want to work. They oppose Russian bullying, but they also oppose fighting.

I made the claim that” The Rassemblement National of Marine le Pen is a patriotic group.”

The Cardinal responded,” Le Pen appeals to their sloth rather than the fading grandeur of the Flemish.” Her most common suggestion is to lower the retirement age, which would cause the French Treasury to fail.

” What will become of France, Eminence”?

” The same thing that has become of me: It will be a spirit of its original self”, the Cardinal sighed, as his shiny purple robes turned lustrous. Some of the bone stacks against the wall assembled themselves into remains, formed a circle and began to sing,” Dansons la carmagnole”!

The now-fading Spirit of Richelieu dismissed the corpses with a curt movement after a few rounds, and they were then threw into piles of vertebrae that twitched in the ossuary floor’s primordial seep. ” Get away”! I cried – I do not know why –” Boogie the Carmagnole”!

However, by this point, the chamber was spinning around me. A low Rabelais and an empty container of Cognac greeted me as I awoke.

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ESG “ineffective” without right leadership

ESG 'ineffective' without right leadership

A desire for a better future is essential to achieve sustainability and the environmental, social, and governance ( ESG) principles alone may not be enough, Rajeev Peshawaria, CEO of Stewardship Asia Centre, said at a conference in Bangkok this week.

The ESG model has been around since the 1990s but it is proving powerful, he said.

He continued, noting that rules generally only impose the bare minimum of responsible behavior and that businesses today frequently engage in greenwashing to prevent problems.

” Laws does minimise damage, but they do not maximise great”.

He noted that the majority of modern corporations are profiting from problems rather than developing lucrative solutions to challenges.

Alternatively of ESG, we should move to ESL, he said, where” L” stands for” servant leadership”– a real desire to create a better future for partners, community and coming years.

” The answer lies in’ doing also by doing nice ‘”, he said.

Businesses must make money and expand, but they must do so by addressing the issues that are currently threatening society: climate change, inequality, and cybercrimes. Only then will the prospect of our children become secure”, he said.

The Mae Fah Luang Foundation’s Doi Tung Development Project is a good illustration of businesses that place values and the atmosphere second, he said.

The project was started in order to shift the opium-producing state’s business from one of sustainable agriculture. And its successful organization was built on a value-driven idea like this.

This method has contributed to their lengthy- word success, he said.

The world needs true dedication and innovation, not just those driven by external incentives, according to Mr. Peshawaria, to address the existential challenges facing today.

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Accountant instigated friend to be ‘silent director’ of firms that handled over US million in scam funds

SINGAPORE: A friend and a certified accountant allegedly failed to manage the businesses they incorporated in Singapore, resulting in two companies receiving more than US$ 1 million in scam proceeds.

Ishan Sharma, 34, admitted on Friday ( Jun 14 ) to instigating his friend, Kandhiban Letchumanansamy, 36, into not exercising due diligence in discharging his duties as a director of two companies, Quartz Resources and Kiora Worldwide. &nbsp,

Kandhiban failed to keep tabs on the companies ‘ affairs and make sure that they were n’t used as tools for criminal activity. &nbsp,

Kandhiban admitted guilt to one of the three charges brought by the Organizations Act, while Ishan admitted guilt to two of the other two. &nbsp,

When both defendants are sentenced on July 9th, the remaining charges may be taken into account. &nbsp,

Ishan, a certified accountant, included many businesses in 2016 and 2020 to provide business secretarial solutions. He earned about&nbsp, S$ 20, 000 ( US$ 14, 777 ) to S$ 22, 000 a month.

Ishan found out that Kandhiban was unemployed in 2017 and offered him a job for a monthly wage of S$ 500. &nbsp,

Kandhiban was required to be listed as a” silent director” of incorporated companies. He would not be involved in the company’s functions or activities as a result. &nbsp,

He was aware that his job was to fulfill the requirements for a local director and to ensure the businesses ‘ compliance with laws. Kandhiban resisted the condition, citing that Ishan would have to check the businesses. &nbsp,

Between 2019 and 2020, Kandhiban was the mentioned producer of more than 50 firms, as per his agreement with Ishan.

TWO BUSINESSES RECEIVED SCAM FUNDS.

The claims both faced were related to two firms, Quartz Resources and Kiora Worldwide, which received more than US$ 5.3 million over a span of four times, of which about US$ 1.06 million was traced to fraud victims. &nbsp,

Rahul, an American federal who wanted to include a business in Singapore and needed a nearby nominee director, contacted Ishan around June 2019. &nbsp,

Before incorporating Quartz Resources, a firm allegedly engaged in IT consulting and software development, Ishan forwarded him a dozen regulatory forms asking for specifics. &nbsp,

Rahul Batra was only briefly searched for his name on the internet before Ishan completed his complete investigation. The former agreed to be Kandhiban’s candidate for chairman of Quartz Resources.

Kandhiban was aware that he would not get involved in the company’s management and activities. &nbsp,

Just after Quartz Resources was incorporated on June 7, 2019, did the couple meet in person, and Rahul had already paid Ishan S$ 6, 000 for the company. The company’s registered address was Ishan’s residence address. &nbsp,

Kandhiban and Rahul were listed as executives, while Ishan was the minister. &nbsp,

In its three banks records, Quartz Resources received more than US$ 3.8 million between April and July 2020. The funds were remitted to another bank records in China, Hong Kong, Indonesia, Dubai and Singapore. &nbsp,

Around US$ 583, 460 of this was uncovered to five patients in the US who had fallen prey to an official imitation scam. &nbsp,

Ishan was introduced to another American federal named Wadhawan Suchit, who wanted to form a business in Singapore, shortly before November 2019. &nbsp,

Before incorporating Kiora Worldwide on November 3, 2019, Ishan forwarded the similar types and just ran a few brief searches.

After the integration, Ishan simply received$ 6,000 for the service and met Suchit in person. Kandhiban was once more requested to serve as the chairman.

Between April and July 2020, more than US$ 1.5 million was transacted through Kiora Worldwide’s three banks accounts. Three US patients who were survivors of an official imitation fraud were identified as being responsible for the US$$ 479, 601. &nbsp,

In contrast to other cases where accused people were “randomly picked” to serve as directors, Jasjeet Singh and S S Dhillon, who distinguished their clients ‘ cases from those that were. &nbsp,

A layperson on the street does no incorporate businesses for the benefit of the public, according to Mr. Dhillon. &nbsp,

While Ishan was a certified accountant who was involved in the integrating firms ‘ business functions, Mr. Dhillon claimed that Kandhiban had assumed that the business operations may be conducted legally. &nbsp,

According to Ishan, he charged between S$ 2, 000 and$ 2, 500 for corporate secretarial services, and an additional S$ 3, 000 to S$ 3, 500 for providing a nominee director. &nbsp,

” Unlike different instances where the accused had a fully hands-off technique after being listed as a candidate director, Kandhiban continued to talk to Ishan about the businesses incorporated,” said Mr. Dhillon. &nbsp,

The accused parties had a long story with integrating firms and had never been tangled with the rules before, according to the attorney. &nbsp,

Ishan had been a producer of three firms and a minister of individuals, while Kandhiban had been a producer of 77 corporations, although only 11 were engaged. &nbsp,

” If truth be told, after the present studies, both of them have been so petrified that they have closed most of the firms, fearing that they will be answerable for items which they did not anticipate”, said Mr Dhillon. &nbsp,

An offender who violates their work as a producer does face jail time for up to 12 weeks or a fine of up to S$ 5, 000. They might also be prohibited from working as directors. &nbsp,

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AI processor wars burning hot and bright – Asia Times

Apple is just the latest in a growing line of competitors to Nvidia, the world’s leading manufacturer of artificial intelligence ( AI ) processors, but China is the only country that can compete with the US in the technology market. With business forces short- energized by US- led systems bans and sanctions, China does but by necessity.

Following CEO Tim Cook’s assessment of the bank’s AI technique at its Worldwide Developers Conference the day before, Apple’s share rate increased by more than 7 % to a new all-time deep on June 11.

Nvidia’s promote price dropped 0.7 % on June 11 to remind investors and other parties that while the company’s sales and profits are likely to increase, its exceptionally high market share and share market assessment are both likely to decline in the future.

Nvidia is competing with a growing number of companies around the world to capture market share and customers who prefer to avoid dealing with dominance manufacturers. In China, where the US government’s restrictions have hampered Nvidia’s ability to compete with Huawei and various native AI device manufacturers, the situation is different but less suitable.

Apple is integrating ChatGPT from OpenAI with a more advanced Siri digital assistant. After that, it will allow users to make their own emoji online graphics, called Genmoji, to match their “vibe” as San Jose’s Mercury News puts it.

” Users will also be able to create personalized photos”, the post continues,” such as taking a picture of your baby and making it into a stylized, toon- y edition, adding a superhero cape” .&nbsp, Different” Apple Intelligence” services may follow. ” It is the next big step for Apple”, said Cook.

This should increase the competition for the new iPhones, iPads, and Macs, but it is a far cry from Nvidia’s top-of-the-line Hopper, Blackwell, and the upcoming generation of Rubin AI processors, which are or will be used to create large language models and digital twins of complex industrial machinery and workflows.

Nvidia currently has 80 % or more of the AI processor market, in the estimation of analysts. AMD ( another American integrated circuit design company ), Intel and many other competitors including Google, Amazon Web Services, IBM and AI ventures SambaNova, Cerebrus and Groq, are also positioning for a share of the market.

Barron’s reports that Microsoft, Meta and Oracle purchase 15 % to 25 % of their AI processors from AMD, and most of the rest from Nvidia. AMD’s Instinct MI300 AI accelerator offers a viable alternative to Nvidia’s H100 GPU. Both devices are undergoing upgrades.

In April, Intel released its Gaudi 3 AI accelerator, which it claims delivers “50 % on average better inference and 40 % on average better power efficiency&nbsp, than Nvidia H100 – at a fraction of the cost”.

Gaudi 3 is available to computer makers Dell, HP, Supermicro, Lenovo, as well as customers Bosch, IBM, and Bharti Airtel, an Indian telecom services provider, as well as the Indian telecom services company.

In an effort to speed up the deployment of secure generative AI systems, Intel has also announced that it will collaborate with SAP, Red Hat, VMware, and other software companies to create an open platform for enterprise AI.

More seriously for Nvidia, Intel, Qualcomm, Google Cloud, Arm, Samsung and other companies have formed the Unified Acceleration Foundation ( UXL ) to develop an open- source, open- standard AI accelerator software ecosystem as an alternative to Nvidia’s currently dominant proprietary Compute Unified Device Architecture ( CUDA ) computing platform.

UXL states that “anyone can join” and China’s Xiangdixian Computing Technology is also a member. This places it in the same category as the RISC- V open standard IC design architecture, which presents an opportunity for China but a potential target for US politicians.

Nvidia customers Apple, Meta and Microsoft Azure are also getting into the act: Apple with its M4 SoC ( System- on- Chip ) which powers the new iPad Pro, Meta with its MTIA ( Meta Training and Inference Accelerator ) which is now in its second iteration, and Microsoft Azure with its Maia 100 AI Accelerator. Nvidia processors are also used by Google and Amazon the most frequently.

In China, AI processors are designed by tech giants Alibaba, Baidu, Huawei and Tencent, and smaller specialists including Bitmain, Cambricon, Enflame, Inspur, MetaX and Xiangdixian Computing Technology. Their main issue is that their advanced designs cannot be turned into chips by TSMC or other non-Chinese foundries because of US sanctions, aside from a relative lack of experience.

Although there are more than 40 semiconductor foundries in China, even the biggest and most technologically advanced, does not have access to EUV lithography equipment, which means it is impossible to produce large quantities of chips at process nodes smaller than 7 nm.

Huawei, which is building its own internal semiconductor production capability, is also doing this. Outside China, TSMC, Samsung and Intel are moving from 5nm to 3nm and soon 2nm.

But sanctions cut both ways. Chinese customers are now reliant on the dumbed-down H20, which is why the US government has banned the sale of Nvidia’s H100 and other advanced AI processors.

The US Commerce Department’s stringent regulations are so severe that Huawei’s Ascend 910B AI processor has been robbing Nvidia of market share based on a combination of performance, price, and concerns that sanctions might be tightened even more.

These worries are now being realized as the Biden administration reportedly intends to impose a cap on China’s access to gate-all-around transistor architecture and high-bandwidth memory.

Both technologies are essential for the creation of the most cutting-edge AI processors. Alibaba, Baidu and Tencent used Nvidia processors before sanctions were imposed, now they are customers of Huawei. Last February, Nvidia named Huawei as one of its top competitors.

Ironically, Enflame and MetaX have reportedly produced dumbed-down versions of their own processors that can be produced by TSMC in an ironic twist. However, the Chinese are investing the majority of their resources in developing their own equipment industry and making the best use of the foreign equipment they do have access to.

Huawei and SMIC are currently using self-adjusted quadruple patterning to create 5nm and possibly even 3nm chips to make up for their lack of EUV lithography equipment.

Huawei also created an AI-based platform. Although it is less developed and has a much smaller user base than Nvidia’s CUDA, it was just a concept five or six years ago. The same is true of China’s entire AI industry.

On the large language model front, SemiAnalysis ‘ Dylan Patel wrote in May that China’s open-source DeepSeek generative AI model is significantly less expensive than Meta’s most recent Llama 3 series model and also better. ” Even more interesting”, he added, “is the novel architecture DeepSeek has brought to market. They did not copy what Western businesses did. There are brand new innovations”.

DeepSeek costs less than OpenAI’s GPT-4, according to Andrew Carr, chief scientist at US generative animation company Cartwheel, according to the Financial Times.

With a overall score of 54.8 %, the University of Waterloo in Ontario’s Text and Image GEnerative Research ( TIGER ) lab ranks DeepSeek- V2 seventh out of ten large language models. OpenAI’s GPT- 4o ranks first at 72.6 %. Yi- Large from China’s 01. AI scores 57.5 %, Alibaba’s Owen15- 72B 52.6 %. TIGER Lab’s own MAmmo ranks ninth at 50.4 %.

Kai- Fu Lee, the CEO of 01. AI, a researcher in the United States, earned his PhD at Carnegie Mellon. Before moving to Beijing to lead Microsoft Research Asia and Google China between 1998 and 2009, he was born in Taiwan and worked for Apple and Silicon Graphics. Following that, he founded the venture capital firm Sinovation.

Lee founded 01. AI will develop large language models in both Chinese and English in 2023. The Large Model Systems Organization” Chinese Ranking” dated May 21, 2024, shows Yi- Large running a close second to the most recent version of OpenAI’s GPT- 4o.

The” Overall Ranking” places it seventh out of 15 models, behind three versions of GPT- 4o, Google’s Gemini 1.5 Pro, Anthropic’s Claude 3 Opus and the top version of GPT- 4.

Nvidia AI accelerators have been heavily used to train Chinese large language models so far. However, as the quality of the Chinese models increases, more people use locally produced processors and supercomputers.

Follow this writer on&nbsp, X: @ScottFo83517667

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China firms seek anti-dumping probe of EU pork imports

China’s businesses have formally requested an anti-dumping investigation into meat imports from the European Union, according to the state-backed Global Times, escalating tensions after the bloc imposed anti-subvention duties on Chinese-made electric vehicles. After Brussels imposed tariffs of up to 38.1 per share on EVs made in China to protectContinue Reading

European debt now a better bet than US Treasuries – Asia Times

As relationship expert Bill Gross sparkles a bright spotlight on a rapidly evolving threat to US Treasury securities, the November election, Janet Yellen the n’t become happy.

The former Pacific Investment Management Co ( PIMCO ) chief investment officer has mentioned European debt as a ready substitute for securities that were sold by US Treasury Secretary Yellen’s team in recent interviews.

” As we move to November, and everything becomes more clear as to who may or who might not win, the doubt plus the potential legislation implications may affect Treasuries significantly”, Gross told Bloomberg.

Gross’s apparent move to Europe comes even after the electoral debacles in Berlin and Paris. Emmanuel Macron and Olaf Scholz faced opposition in the European Parliament elections on June 9.

As President Macron called a snap election in a bid to consolidate power, French bond yields reached their highest level since November. German and Italian bond prices plunged, too, as traders assessed the fiscal policy implications of the elections.

Gross notes, political surprises coming from the continent, and other significant events in India, Mexico, and South Africa that put many bond investors at risk due to market reactions. Could the US election pitting Democrats for Republicans against President Joe Biden be the next market snob?

” What we’ve seen the last few weeks is a reaction to uncertainty, in terms of not only the party that’s dominating, but uncertainty as to what their policies will be”, Gross explains.

As such, Gross adds,” there’s coming a point where European bonds are more attractive than Treasury bonds, in my opinion. In terms of attraction, the spreads for German and French 10-year bonds have decreased significantly over the past month or two in relation to Treasuries and today as well.

This is how US electioneering may cast a serious shadow over the attractiveness of the dollar, the linchpin of global finance and trade, written between the lines in bold font. And the difficult task Team Yellen must complete in order to stop the US government’s debt from rising worldwide.

Adding to Yellen’s challenges, a US national debt approaching US$ 35 trillion just as Washington politics become increasingly toxic.

A US debt run might be in the offing. Photo: Wikimedia Commons

Extreme polarization is already imperiling Washington’s credit rating. Last August, when Fitch Ratings yanked away America’s AAA&nbsp, credit score, it cited the polarization behind the January 6, 2021 insurrection among the reasons.

Additionally, Fitch cited political conflict involving raising the statutory debt ceiling and funding the US government as risk factors for the credit rating of Washington. Such clashes might worry Asia less if not for the fact Washington’s debt is&nbsp, twice the size&nbsp, of China’s annual GDP and more than eight times Japan’s.

Combined, Tokyo and Beijing hold about$ 2 trillion of US government debt. That vast pool of savings could be at risk if Moody’s Investors Service revokes Washington’s last remaining AAA rating. Surging US yields would affect global markets in unanticipated ways.

America’s sharp mercantilist pivot since 2017 is another worry for Asia’s export- reliant economies. Then, President Trump imposed severe tariffs on global steel and aluminum as well as Chinese goods.

When Biden arrived, he left Trump’s trade war in place— and added new layers of China- targeted curbs, most targeting China’s access to semiconductors, chip- making equipment and other vital, cutting- edge technologies.

Now, Trump’s plan to slap 60 % taxes on all Chinese goods is catalyzing something of a tariff arms race, one that’s drawing retaliation threats from Xi Jinping’s government. The EU followed this week with 38 % of its own tariffs after Beijing just imposed a 100 % tax on China-made electric vehicles.

Never mind that “policies are more likely to hurt than help the lower- and middle-income Americans they purport to benefit,” asserts economist Kimberly Clausing of the Peterson Institute for International Economics, a think tank based in Washington.

Stock markets everywhere could be in harm’s way as trade war risks increase and uncertainty surrounds growth prospects. According to Gross, the US’s “equity market is valued at historically high levels if looking at current 21-times ‘ price to earnings ratios” are considered. If GDP slows, he notes, there could be” a problem in terms of valuation at the moment for many stocks”.

That goes, too, for Europe’s economic prospects as the region’s biggest economy, Germany, fends off recession risks. With a narrower electoral mandate, Chancellor Scholz ‘ Social Democrats and its progressive coalition partners are now free to stimulate growth.

Macron is smarting in France now that he lost to Marine Le Pen’s nationalist far-right party in parliamentary elections. The surprise snap election he announced overlaps with Macron’s hosting of the Paris Summer Olympics. Macron’s instinct to fight contrasts with Belgium’s Alexander De Croo, who resigned instead.

Macron urges French citizens to cast ballots the same way they did this weekend for the European Parliament, which has long been seen as a protest vote, according to Mujtaba Rahman, an analyst at Eurasia Group.

Macron “believes he can defy the polls by having to choose between the pro-EU, pro-Ukrainian, and centrist status quo” and the existential risk of a far-right government,” he said.

It’s quite a gamble on France’s future. Polls, Rahman says, suggest Macron’s centrist coalition will fail to win a majority, and if Le Pen’s National Rally picks up the most seats.”

That means” France will be in uncharted waters,” Rahman explains”. Le Pen has stated that she will partially withhold EU funding, impose stricter immigration laws, violate the EU single market by putting French business before French aid, and impose restrictions on aid to Ukraine.

Italy’s Giorgia Meloni had a much better week, continuing her pivot from far- right to mainstream. Along with a solid election showing, Meloni’s government will host the Group of Seven ( G7 ) in the days ahead.

Centrist European Commission President Ursula von der Leyen also appears to have reclaimed the far-right trend and been given another five-year term. She will likely be forced to make concessions to immigration and environmental policies to advance the agenda.

Ursula von der Leyen, the EC president, has been hawkish about China trade issues. Photo: Asia Times Files / AFP / Dursun Aydemir / Anadolu Agency

What all of this means for EU fiscal dynamics is a ripe subject. Another wildcard is the outlook for US rates. The core consumer price index dropped to its lowest level in more than three years in May.

Despite May’s lower CPI, the US Federal Reserve’s guidance seems” roughly unchanged,” says economist Dominique Dwor- Frecaut at advisory Macro Hive”. Cuts continue to be the best case scenario until the Fed has increased its confidence in the disinflationary outlook.

Will Denyer, economist at Gavekal Dragonomics, adds that” even though they had this softer inflation data in hand, Fed policymakers still pared back their rate cut expectations for the year.”

The global implications are uncertain. The belief that the Fed is” committed to its 2 % inflation target” in the foreign exchange market implies that any increase in US inflation has a tendency to cause the dollar to rise while slower inflation causes the US currency to contract, according to Denyer.

As a result, May’s softer CPI release saw the dollar ease against most currencies. However, it’s still unclear whether this focus will continue to be the main force behind the world’s exchange markets in the coming days and weeks.

Denyer contends that worries about the outcome of the French parliamentary election could devalue the euro. A potential drop in the Bank of Japan’s asset purchases could increase the yen. The main story is, however, May’s moderate US inflation and what it implies for US policy and global markets.

Not the whole story, though, as election- year shenanigans heat up in the US. Global markets will continue to be tense as Biden and Trump battle it out in the polls. &nbsp,

According to Kelvin Wong, an analyst at OANDA, the 10-year yield spread premium between US Treasury notes and Japanese government bonds has reduced Japanese insurance companies ‘ ability to invest in fixed-income securities, which may result in higher odds that the long-term JGB yields will likely trend higher.

According to Wang,” These potential upcoming fixed income portfolio adjustments from Japanese insurance companies may provide some support to halt the major yen’s weakness against the US dollar.”

However, as Gross points out, European debt will soon be popular with global investors as Yellen’s team struggles to maintain demand for a US Treasury debt market that appears to be in decline.

” Relative to the US, we see support for European bonds due to smaller fiscal deficits,” says Ann- Katrin Petersen, investment strategist at the BlackRock Investment Institute.

Follow William Pesek on X at @WilliamPesek

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Li Qiang to Australia as relations move from freeze to thaw – Asia Times

Premier Li Qiang of China will travel to Australia from June 15 to June 18.

It is a Chinese premier’s first trip to Australia in seven years, and it also signals a more melting of the two nations ‘ once-frozen relationships.

The elite is in charge of the State Council and is ranked second among the seven-member governing Politburo. Just President Xi Jinping, as the mind of the Chinese Community Party, surpasses him.

In the same way as both our head of government ( prime minister ) and head of state ( governor- general ) are active in international diplomacy, both Li and Xi conduct international visits.

The prime minister has recently attended multilateral summits with Japan and South Korea, the G20, and the World Economic Forum. Li Keqiang, the preceding top, traveled to Australia in 2017.

The greatest in diplomatic niceties are required for an official visit of this stage. In general, it brings back the visit that Prime Minister Anthony Albanese made to China later last month.

What will the premier been doing?

The focus will be on set pieces for a visit to a head of a major world power in Canberra ( although I’m not sure if this will happen when Indian Prime Minister Narendra Modi hosts Albanese for a pre-cricket shoulder of recognition in a golden carriage ).

A complete royal pleasant, including a visit to Governor-General David Hurley, as well as a military display. This is the procedure and symbolic language of any formal visit.

The top will co-chair the seventh China-Australia Annual Leaders ‘ Meeting on the political front. In a memorable moment from 2003 when US President George W. Bush and Chinese President Hu Jintao delivered remarks within a day of each other, Xi addressed legislature in 2014.

Xi has traveled extensively throughout Australia, making jokes about getting a license for it when he visited Tasmania in 2014.

Before moving on to Malaysia, Li will spend time in Adelaide and Perth ( to visit the pandas and have lunch with depressed wine exporters ) for business development and a Chinese group visit.

China sees the attend as an opportunity to promote business and investment connections, much like we’ve seen our prime minister carrying company representatives on his travels.

The premier will also visit a Fortescue facility and a lithium refinery at Kwinana ( a joint venture with Chinese-owned Tianqi Lithium ). He may attend a roundtable on Australia-China CEO that the Business Council of Australia will convene business officials.

It’s a warning that, just as in Australia, China’s officials have an all- taking focus on improving economic development.

Given his history supporting innovative and business development, former minister Jocelyn Chey points out that Li will likely be interested in the financial possibility of greater interdependence in both industry and commerce.

Will there be big announcements?

Possibly not. I’m expecting more method and connection- tower. Basically, the work was done in advance to make the visit possible.

The defence ministries of Australia and China met in Canberra in March, and Trade Minister Don Farrell has been active addressing trade limits, with recent disclosures made regarding wheat and wine. ( Lobster is essentially the last industry to have trade barriers. )

To a great extent, the Albanese government has reached its goal of” stabilizing” relations. This attend focuses more on examining what other options are there for the couple.

Many will be listening cautiously to Li’s communication, which might well be simple. Propositions at the highest levels will be used as hints about plan and direction in an opaque political program.

The Taiwanese citizens are one of the most important people for this sensing: for instance, lower- level officials, buy companies, those planning holidays and parents making decisions about where their children will research.

Australia may be hoping that the message that it is up on the “friendly” state record will continue. A feeling that Australia was” never so pleasant, yet angry” had a bad impact on many small decisions by a range of players. Li’s kid studied in Australia, so it might be mentioned.

Continuing areas of disagreement

While those involved in protocol did often wish to reduce controversy, it is obvious the Taiwanese premier will face fierce media questions and possible demonstrations, for example by Uighur, Falun Gong and Hong Kong protesters.

Albanese has pledged to raise concerns during Li’s browse in accordance with Albanese’s oft-quoted statement,” We will co-operate where we can, disagree where we must, and participate in our national attention.”

This will include problems with people freedom, such as Yang Hengjun’s earlier death sentence. Albanese will assuredly once more express his concern about the Chinese’s continued action against American personnel in the Yellow Sea, which has imposed UN sanctions on North Korea, and other long-standing points of contention between the two nations.

Most of all, the president’s explore will show that China and Australia are able to include a “normal” political marriage after the decades of “deep freeze“.

It will demonstrate the value of politics as a means of communication, certainly as a means of expressing one’s opinion, to come up with alternatives and try to control others.

In the relationship between China and Australia, the differences are numerous. The Samples: ACRI/BIDA Poll released this week demonstrates just how serious Australians ‘ suspicion of China is still. This wo n’t be covered up by a state visit.

This is a better position than the previous decades, and it is more in line with those in other nations.

Diplomacy provides tools to maximize the benefits of a continuously significant but challenging relationship as Australia attempts to manage its relations with China in accordance with its regional interest and support for global rules.

Melissa Conley Tyler is Honorary Fellow, Asia Institute, The University of Melbourne

This content was republished from The Conversation under a Creative Commons license. Read the original post.

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Chinese EV firms can absorb EU tariffs: expert – Asia Times

According to a former general counsel of the Office of the United States Trade Representative ( USTR ), the new tariffs imposed on Chinese electric vehicles ( EVs ) wo n’t have a significant impact on imports from China.

According to Greta Peisch, a companion in the Wiley International Trade Practice, Chinese automakers are able to capture the EU’s weak tariffs and maintain successful margins in Europe in an interview with Asia Times.

Greta Peisch, a companion at Wiley and former Office of the United States Trade Representative general counsel, is shown in this picture. laws

In China, Chinese firms are selling their Vehicles for less money than in Europe. And when you compare the two different sticker costs, it appears that there is a lot of room for Taiwanese businesses to take that tariff, she said. &nbsp,

They may still be able to offer their EVs in Europe with the same income margin that they would be able to make in China, she said, even if the price is likely set at 38 %.

She claimed that China’s market has a capacity-building slump that it can no longer capture, leading to the price decline of EVs in China. She said, for instance, that BYD sold an EV type in China for about US$ 12, 000.

In April 2023, BYD priced its Seagull subcompact EV, the company’s cheapest unit, at US$ 11, 400 in China. The concept, powered by a 55 watt electrical motor and a 30 kilowatt per minute battery pack, you move 305- 405 kilometers per charge. The battery allows the EV to charge up to 80 % in 30 minutes. &nbsp,

Last month, BYD offered its Seagull EV Honor Edition at US$ 9, 700 in China. According to media reports, the business planned to sell the model for about 20 000 euros ( US$ 21.47 ) in Europe. Similar European EV models are priced at around 25, 000 to 30, 000 euros. &nbsp,

In fact, the EU on Wednesday only imposed a 17.4 % tariff on BYD’s EVs. The Hong Kong- listed BYD shares rose 5.82 % to HK$ 232.8 ( US$ 29.8 ). The Hang Seng Index, the benchmark for Hong Kong stock market, only rose by 0.97 % to 18, 112. &nbsp,

Germany’s opposition&nbsp,

The European Commission set up a 13-month investigation last October to find out whether government subsidies have helped Chinese EV manufacturers increase market share in Europe in recent years. Nine months after the investigation begins, it has the authority to impose provisional anti-subsidies. &nbsp,

The EC announced on Wednesday that it has “provisionally concluded” that if discussions with Chinese EV manufacturers fail to produce a successful solution, they will be subject to tariffs starting on July 4.

EV makers who participated in the investigation will typically be subject to a 21 % duty, as per the EC’s decision, while those who did not will be subject to a 38 % duty.

Specific charges will apply to BYD ( 17.4 % ), Geely ( 20 % ) and SAIC ( 38.1 % ). These costs would be added to the 10 % tariff currently in place on all imported vehicles into the EU. This results in tariffs of up to 48.1 % for Chinese EV manufacturers.

Non-Chinese automakers that produce some EVs in China will also be affected. Tesla may be given an “individually calculated duty rate” due to a particular request it made, though.

According to reports in the media, Germany made a final push to the EC to keep the EV tariffs as low as possible on Tuesday to stop China from retaliating. &nbsp,

After the EC’s Wednesday announcement, German Transport Minister Volker Wissing posted on X that” the EU Commission’s punitive tariffs affect German companies and their top products” .&nbsp,

German businesses expressed concern that the EU tariffs will have an impact on the country’s stark export-oriented economy.

Peisch, whose key responsibilities at USTR included coordinating with European partners on tariff action to address Chinese overcapacity, said it’s a significant challenge that Germany and its businesses oppose the EU’s new tariffs on Chinese EVs. &nbsp,

” Many German businesses have invested heavily in China. And it’s understandable that they are concerned about the EU’s tariffs and what they might mean for their Chinese markets, she said. They” simply assume that China will engage in retaliatory behavior,” they say.

” But in my opinion, Germany and those companies are a little short-sighted because I believe China wants to dethrone those European sellers in its own market,” she continued. There are still a lot of money to be made in China by these German producers in the near future. But will they still be greeted there in a while?

Before China begins replacing German businesses with local players, she advised German businesses to make long-term plans for their development. &nbsp,

Due to uncertainty over how China might respond to the EU’s new tariffs, European auto stocks fell on Wednesday and Thursday. &nbsp,

China’s responses

Beijing vowed to take the necessary steps on Thursday in response to the EU’s decision to impose new tariffs on Chinese electric vehicles.

The China-based government will pay close attention to the European side’s progress and will resolutely take all necessary steps to resolutely defend the legitimate rights and interests of Chinese companies, according to the government’s official statement on Thursday. &nbsp,

Lin Jian, a spokesperson for China’s foreign ministry, described the EU’s anti-subvention investigation as a typical example of protectionism that disregarded the facts and World Trade Organization regulations. &nbsp,

We urge the EU to take into account the rational and objective viewpoints of various stakeholders, correct its mistaken choice at once, stop politicizing trade, properly address economic and trade frictions through dialogue and consultation, and prevent harming China and the EU’s mutual trust, dialogue, and cooperation, Lin said.

According to Sun Xiaohong, secretary-general of the automotive branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, China has a lot of countermeasures against the EC’s most recent action, which does not adhere to WTO principles. &nbsp,

He said the EU’s move is unreasonable and not good for trade development. He claimed that Tesla’s temporary exemption from the temporary tariffs demonstrated that only Chinese businesses are targeted by the EU tariffs. &nbsp,

He added, however, that China is still willing to engage in negotiations with the EU to prevent a full-fledged trade war.

Peisch said it’s unclear what allegations and arguments China might have if it sued the WTO for the EU’s tariff action.

” Just saying’ protectionism’ does not make it inconsistent with the WTO rules”, she said. They would need to determine how the EU had broken those rules specifically. And from the face of it, I do n’t know what that would be”.

Read: China to retaliate if Europe raises EV tariffs

Follow Jeff Pao on X: &nbsp, @jeffpao3

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Whistleblower says Microsoft left US govt hackable – Asia Times

by Renee Dudley, with research by Doris Burke

This story was originally published by ProPublica, a Pulitzer Prize-winning investigative newsroom.

Microsoft hired Andrew Harris for his extraordinary skill in keeping hackers out of the nation’s most sensitive computer networks. In 2016, Harris was hard at work on a mystifying incident in which intruders had somehow penetrated a major US tech company.

The breach troubled Harris for two reasons. First, it involved the company’s cloud — a virtual storehouse typically containing an organization’s most sensitive data. Second, the attackers had pulled it off in a way that left little trace.

He retreated to his home office to “war game” possible scenarios, stress-testing the various software products that could have been compromised.

Early on, he focused on a Microsoft application that ensured users had permission to log on to cloud-based programs, the cyber equivalent of an officer checking passports at a border. It was there, after months of research, that he found something seriously wrong.

The product, which was used by millions of people to log on to their work computers, contained a flaw that could allow attackers to masquerade as legitimate employees and rummage through victims’ “crown jewels” — national security secrets, corporate intellectual property, embarrassing personal emails — all without tripping alarms.

To Harris, who previously had spent nearly seven years working for the US Defense Department, it was a security nightmare. Anyone using the software was exposed, regardless of whether they used Microsoft or another cloud provider such as Amazon. But Harris was most concerned about the federal government and the implications of his discovery for national security. He flagged the issue to his colleagues.

They saw it differently, Harris said. The federal government was preparing to make a massive investment in cloud computing, and Microsoft wanted the business. Acknowledging this security flaw could jeopardize the company’s chances, Harris recalled one product leader telling him. The financial consequences were enormous. Not only could Microsoft lose a multibillion-dollar deal, but it could also lose the race to dominate the market for cloud computing.

Harris said he pleaded with the company for several years to address the flaw in the product, a ProPublica investigation has found. But, at every turn, Microsoft dismissed his warnings, telling him they would work on a long-term alternative — leaving cloud services around the globe vulnerable to attack in the meantime.

Harris was certain someone would figure out how to exploit the weakness. He had come up with a temporary solution, but it required customers to turn off one of Microsoft’s most convenient and popular features: the ability to access nearly every program used at work with a single logon.

He scrambled to alert some of the company’s most sensitive customers about the threat and personally oversaw the fix for the New York Police Department. Frustrated by Microsoft’s inaction, he left the company in August 2020.

Within months, his fears became reality. US officials confirmed reports that a state-sponsored team of Russian hackers had carried out SolarWinds, one of the largest cyberattacks in US history.

They used the flaw Harris had identified to vacuum up sensitive data from a number of federal agencies – including, ProPublica has learned, the National Nuclear Security Administration, which maintains the United States’ nuclear weapons stockpile, and the National Institutes of Health, which at the time was engaged in Covid-19 research and vaccine distribution.

The Russians also used the weakness to compromise dozens of email accounts in the Treasury Department, including those of its highest-ranking officials. One federal official described the breach as “an espionage campaign designed for long-term intelligence collection.”

Harris’ account, told here for the first time and supported by interviews with former colleagues and associates as well as social media posts, upends the prevailing public understanding of the SolarWinds hack.

From the moment the hack surfaced, Microsoft insisted it was blameless. Microsoft President Brad Smith assured Congress in 2021 that “there was no vulnerability in any Microsoft product or service that was exploited” in SolarWinds.

Microsoft President Brad Smith testifies in 2023 before the U.S. Senate Judiciary Committee Subcommittee on Privacy, Technology, and the Law. Photo: Screenshot via webcast / GeekWire

He also said customers could have done more to protect themselves.

Harris said they were never given the chance.

“The decisions are not based on what’s best for Microsoft’s customers but on what’s best for Microsoft,” said Harris, who now works for CrowdStrike, a cybersecurity company that competes with Microsoft.

Microsoft declined to make Smith and other top officials available for interviews for this story, but it did not dispute ProPublica’s findings. Instead, the company issued a statement in response to written questions.

“Protecting customers is always our highest priority,” a spokesperson said. “Our security response team takes all security issues seriously and gives every case due diligence with a thorough manual assessment, as well as cross-confirming with engineering and security partners. Our assessment of this issue received multiple reviews and was aligned with the industry consensus.”

ProPublica’s investigation comes as the Pentagon seeks to expand its use of Microsoft products — a move that has drawn scrutiny from federal lawmakers amid a series of cyberattacks on the government.

Smith is set to testify on Thursday before the House Homeland Security Committee, which is examining Microsoft’s role in a breach perpetrated last year by hackers connected to the Chinese government. Attackers exploited Microsoft security flaws to gain access to top US officials’ emails. In investigating the attack, the federal Cyber Safety Review Board found that Microsoft’s “security culture was inadequate and requires an overhaul.”

For its part, Microsoft has said that work has already begun, declaring that the company’s top priority is security “above all else.” Part of the effort involves adopting the board’s recommendations. “If you’re faced with the tradeoff between security and another priority, your answer is clear: Do security,” the company’s CEO, Satya Nadella, told employees in the wake of the board’s report, which identified a “corporate culture that deprioritized both enterprise security investments and rigorous risk management.”

ProPublica’s investigation adds new details and pivotal context about that culture, offering an unsettling look into how the world’s largest software provider handles the security of its own ubiquitous products. It also offers crucial insight into just how much the quest for profits can drive those security decisions, especially as tech behemoths push to dominate the newest — and most lucrative — frontiers, including the cloud market.

“This is part of the problem overall with the industry,” said Nick DiCola, who was one of Harris’s bosses at Microsoft and now works at Zero Networks, a network security firm. Publicly-traded tech giants “are beholden to the share price, not to doing what’s right for the customer all the time. That’s just a reality of capitalism. You’re never going to change that in a public company because at the end of the day, they want the shareholder value to go up.”

A “Cloud-First World”

Early this year, Microsoft surpassed Apple to become the world’s most valuable company, worth more than $3 trillion. That triumph was almost unimaginable a decade ago. (The two remain in close competition for the top spot.)

In 2014, the same year that Harris joined Microsoft and Nadella became the CEO, Wall Street and consumers alike viewed the company as stuck in the past, clinging to the “shrink-wrapped” software products like Windows that put it on the map in the 1990s. Microsoft’s long-stagnant share price reflected its status as an also-ran in almost every major technological breakthrough since the turn of the century, from its Bing search engine to its Nokia mobile phone division.

As the new CEO, Nadella was determined to reverse the trend and shake off the company’s fuddy-duddy reputation, so he staked Microsoft’s future on the Azure cloud computing division, which then lagged far behind Amazon. In his earliest all-staff memo, Nadella told employees they would need “to reimagine a lot of what we have done in the past for a … cloud-first world.”

Microsoft salespeople pitched business and government customers on a “hybrid cloud” strategy, where they kept some traditional, on-premises servers (typically stored on racks in customers’ own offices) while shifting most of their computing needs to the cloud (hosted on servers in Microsoft data centers).

Security was a key selling point for the cloud. On-site servers were notoriously vulnerable, in part because organizations’ overburdened IT staff often failed to promptly install the required patches and updates. With the cloud, that crucial work was handled by dedicated employees whose job was security.

The dawn of the cloud era at Microsoft was an exciting time to work in the field of cybersecurity for someone like Harris, whose high school yearbook features a photo of him in front of a desktop computer and monitor with a mess of floppy disks beside him. One hand is on the keyboard, the other on a wired mouse. Caption: “Harris the hacker.”

As a sophomore at Pace University in New York, he wrote a paper titled “How to Hack the Wired Equivalent Protocol,” referring to a network security standard, and was awarded a prestigious Defense Department scholarship that the government uses to recruit cybersecurity specialists. The National Security Agency paid for three years of his tuition, which included a master’s degree in software engineering, in exchange for a commitment to work for the government for at least that long, he said.

Early in his career, he helped lead the Defense Department’s efforts to protect individual devices. He became an expert in the niche field known as identity and access management, securing how people log in.

As the years wore on, he grew frustrated by the lumbering bureaucracy and craved the innovation of the tech industry. He decided he could make a bigger impact in the private sector, which designed much of the software the government used.

At Microsoft he was assigned to a secretive unit known as the “Ghostbusters” (as in: “Who you gonna call?”), which responded to hacks of the company’s most sensitive customers, especially the federal government. As a member of this team, Harris first investigated the puzzling attack on the tech company and remained obsessed with it, even after switching roles inside Microsoft.

Eventually, he confirmed the weakness within Active Directory Federation Services, or AD FS, a product that allowed users to sign on a single time to access nearly everything they needed. The problem, he discovered, rested in how the application used a computer language known as SAML to authenticate users as they logged in.

This is what makes a SAML attack unique. Typically, hackers leave what cybersecurity specialists call a “noisy” digital trail. Network administrators monitoring the so-called “audit logs” might see unknown or foreign IP addresses attempting to gain access to their cloud services. But SAML attacks are much harder to detect. The forged token is the equivalent of a robber using a copied master key. There was little trail to track, just the activities of what appear to be legitimate users.

Harris and a colleague who consulted for the Department of Defense spent hours in front of both real and virtual whiteboards as they mapped out how such an attack would work, the colleague told ProPublica. The “token theft” risk, as Harris referred to it, became a regular topic of discussion for them.

A Clash With “Won’t Fix” Culture

Before long, Harris alerted his supervisors about his SAML finding. Nick DiCola, his boss at the time, told ProPublica he referred Harris to the Microsoft Security Response Center, which fields reports of security vulnerabilities and determines which need to be addressed. Given its central role in improving Microsoft product security, the team once considered itself the “conscience of the company,” urging colleagues to improve security without regard to profit. In a meeting room, someone hung a framed photo of Winston “the Wolf,” the charismatic fixer in Quentin Tarantino’s movie “Pulp Fiction” who is summoned to clean up the aftermath of bloody hits.

Members of the team were not always popular within the company. Plugging security holes is a cost center, and making new products is a profit center, former employees told ProPublica. In 2002, the company’s founder, Bill Gates, tried to settle the issue, sending a memo that turned out to be eerily prescient. “Flaws in a single Microsoft product, service or policy not only affect the quality of our platform and services overall, but also our customers’ view of us as a company,” Gates wrote, adding: “So now, when we face a choice between adding features and resolving security issues, we need to choose security.”

At first, Gates’ memo was transformational and the company’s product divisions were more responsive to the center’s concerns. But, over time, the center’s influence waned.

Its members were stuck between cultural forces. Security researchers — often characterized as having outsized egos — believed their findings should be immediately addressed, underestimating the business challenges of developing fixes quickly, former MSRC employees told ProPublica.

Product managers had little motivation to act fast, if at all, since compensation was tied to the release of new, revenue-generating products and features. That attitude was particularly pronounced in Azure product groups, former MSRC members said, because they were under pressure from Nadella to catch up to Amazon.

“Azure was the Wild West, just this constant race for features and functionality,” said Nate Warfield, who worked in the MSRC for four years beginning in 2016. “You will get a promotion because you released the next new shiny thing in Azure. You are not going to get a promotion because you fixed a bunch of security bugs.”

Former employees told ProPublica that the center fielded hundreds or even thousands of reports a month, pushing the perennially understaffed group to its limits. The magazine Popular Science noted that volume as one of the reasons why working in the MSRC was one of the 10 “worst jobs in science,” between whale feces researchers and elephant vasectomists.

“They’re trained, because they’re so resource constrained, to think of these cases in terms of: ‘How can I get to ‘won’t fix,’” said Dustin Childs, who worked in the MSRC in the years leading up to Harris’ saga. Staff would often punt on fixes by telling researchers they would be handled in “v-next,” the next product version, he said. Those launches, however, could be years away, leaving customers vulnerable in the interim, he said.

The center also routinely rejected researchers’ reports of weaknesses by saying they didn’t cross what its staff called a “security boundary.” But when Harris discovered the SAML flaw, it was a term with no formal definition, former employees said.

By 2017, the lack of clarity had become the “butt of jokes,” Warfield said. Several prominent security researchers who regularly interacted with the MSRC made T-shirts and stickers that said “____” (meaning fill in the blank) “is not a security boundary.”

“Any time Microsoft didn’t want to fix something, they’d just say, ‘That’s not a security boundary, we’re not going to fix it,’” Warfield recalled.

Unaware of the inauspicious climate, Harris met virtually with MSRC representatives and sketched out how a hacker could jump from an on-premises server to the cloud without being detected. The MSRC declined to address the problem. Its staff argued that hackers attempting to exploit the SAML flaw would first have to gain access to an on-premises server. As they saw it, Harris said, that was the security boundary — not the subsequent hop to the cloud.

Business over security

“WTF,” Harris recalled thinking when he got the news. “This makes no sense.”

Microsoft had told customers the cloud was the safest place to put their most precious data. His discovery proved that, for the millions of users whose systems included AD FS, their cloud was only as secure as their on-premises servers. In other words, all the buildings owned by the landlord are only as secure as the most careless tenant who forgot to lock a window.

Harris pushed back, but he said the MSRC held firm.

Harris had a reputation for going outside the chain of command to air his concerns, and he took his case to the team managing the products that verified user identities.

He had some clout, his former colleagues said. He had already established himself as a known expert in the field, had pioneered a cybersecurity threat detection method and later was listed as the named inventor on a Microsoft patent. Harris said he “went kind of crazy” and fired off an email to product manager Mark Morowczynski and director Alex Simons requesting a meeting.

He understood that developing a long-term fix would take time, but he had an interim solution that could eliminate the threat. One of the main practical functions of AD FS was to allow users to access both on-premises servers and a variety of cloud-based services after entering credentials only once, a Microsoft feature known as “seamless” single sign-on. Harris proposed that Microsoft tell its customers to turn off that function so the SAML weakness would no longer matter.

According to Harris, Morowczynski quickly jumped on a videoconference and said he had discussed the concerns with Simons.

“Everyone violently agreed with me that this is a huge issue,” Harris said. “Everyone violently disagreed with me that we should move quickly to fix it.”

Morowczynski, Harris said, had two primary objections.

First, a public acknowledgement of the SAML flaw would alert adversaries who could then exploit it. Harris waved off the concern, believing it was a risk worth taking so that customers wouldn’t be ignorant to the threat. Plus, he believed Microsoft could warn customers without betraying any specifics that could be co-opted by hackers.

According to Harris, Morowczynski’s second objection revolved around the business fallout for Microsoft. Harris said Morowczynski told him that his proposed fix could alienate one of Microsoft’s largest and most important customers: the federal government, which used AD FS. Disabling seamless SSO would have widespread and unique consequences for government employees, who relied on physical “smart cards” to log onto their devices.

Required by federal rules, the cards generated random passwords each time employees signed on. Due to the configuration of the underlying technology, though, removing seamless SSO would mean users could not access the cloud through their smart cards. To access services or data on the cloud, they would have to sign in a second time and would not be able to use the mandated smart cards.

Harris said Morowczynski rejected his idea, saying it wasn’t a viable option.

Morowczynski told Harris that his approach could also undermine the company’s chances of getting one of the largest government computing contracts in US history, which would be formally announced the next year. Internally, Nadella had made clear that Microsoft needed a piece of this multibillion-dollar deal with the Pentagon if it wanted to have a future in selling cloud services, Harris and other former employees said.

There’s a history here: In court documents unsealed and filed February 20, 2020, Amazon’s cloud computing arm said it was looking to depose seven “individuals who were instrumental” in the Pentagon’s JEDI source selection and “played pivotal roles” in the ultimate awarding of the contract to Microsoft, among them then-President Donald Trump and then-Defense Secretary Mark Esper. A spokesperson for Amazon Web Services told CNBC in a statement: “President Trump has repeatedly demonstrated his willingness to use his position as president and commander in chief to interfere with government functions – including federal procurements – to advance his personal agenda. The preservation of public confidence in the nation’s procurement process requires discovery and supplementation of the administrative record, particularly in light of President Trump’s order to ‘screw Amazon.’ The question is whether the President of the United States should be allowed to use the budget of the DoD to pursue his own personal and political ends.” Photo: CNBC

Killing the competition

By Harris’s account, the team was also concerned about the potential business impact on the products sold by Microsoft to sign into the cloud. At the time, Microsoft was in a fierce rivalry with a company called Okta.

Microsoft customers had been sold on seamless SSO, which was one of the competitive advantages — or, in Microsoft parlance, “kill points” — that the company then had over Okta, whose users had to sign on twice, Harris said.

Harris’ proposed fix would undermine the company’s strategy to marginalize Okta and would “add friction” to the user experience, whereas the “No. 1 priority was to remove friction,” Harris recalled Morowczynski telling him. Moreover, it would have cascading consequences for the cloud business because the sale of identity products often led to demand for other cloud services.

“That little speed bump of you authenticating twice was unacceptable by Microsoft’s standards,” Harris said. He recalled Morowczynski telling him that the product group’s call “was a business decision, not a technical one.”

“What they were telling me was counterintuitive to everything I’d heard at Microsoft about ‘customer first,’” Harris said. “Now they’re telling me it’s not ‘customer first,’ it’s actually ‘business first.’”

DiCola, Harris’ then-supervisor, told ProPublica the race to dominate the market for new and high-growth areas like the cloud drove the decisions of Microsoft’s product teams. “That is always like, ‘Do whatever it frickin’ takes to win because you have to win.’ Because if you don’t win, it’s much harder to win it back in the future. Customers tend to buy that product forever.”

According to Harris, Morowczynski said his team had “on the road map” a product that could replace AD FS altogether. But it was unclear when it would be available to customers.

In the months that followed, Harris vented to his colleagues about the product group’s decision. ProPublica talked to three people who worked with Harris at the time and recalled these conversations. All of them spoke on the condition of anonymity because they feared professional repercussions. The three said Harris was enraged and frustrated over what he described to them as the product group’s unwillingness to address the weakness.

Neither Morowczynski nor Simons returned calls seeking comment, and Microsoft declined to make them available for interviews. The company did not dispute the details of Harris’ account. In its statement, Microsoft said it weighs a number of factors when it evaluates potential threats. “We prioritize our security response work by considering potential customer disruption, exploitability, and available mitigations,” the spokesperson said. “We continue to listen to the security research community and evolve our approach to ensure we are meeting customer expectations and protecting them from emerging threats.”

Another major warning

Following the conversation with Morowczynski, Harris wrote a reminder to himself on the whiteboard in his home office: “SAML follow-up.” He wanted to keep the pressure on the product team.

Soon after, the Massachusetts- and Tel Aviv-based cybersecurity firm CyberArk published a blog post describing the flaw, which it dubbed “Golden SAML,” along with a proof of concept, essentially a road map that showed how hackers could exploit the weakness.

Years later, in his written testimony for the Senate Intelligence Committee, Microsoft’s Brad Smith said this was the moment the company learned of the issue. “The Golden SAML theory became known to cybersecurity professionals at Microsoft and across the U.S. government and the tech sector at precisely the same time, when it was published in a public paper in 2017,” Smith wrote.

Lavi Lazarovitz of CyberArk said the firm mentioned the weakness — before the post was published — in a private WhatsApp chat of about 10 security researchers from various companies, a forum members used to compare notes on emerging threats. When they raised the discovery to the group, which included at least one researcher from Microsoft, the other members were dismissive, Lazarovitz said.

“Many in the security research community — I don’t want to say mocked — but asked, ‘Well, what’s the big deal?’” Lazarovitz said.

Nevertheless, CyberArk believed it was worth taking seriously, given that AD FS represented the gateway to users’ most sensitive information, including email. “Threat actors operate in between the cracks,” Lazarovitz said. “So obviously, we understood the feedback that we got, but we still believed that this technique will be eventually leveled by threat actors.”

The Israel-based team also reached out to contacts at Microsoft’s Israeli headquarters and were met with a response similar to the one they got in the WhatsApp group, Lazarovitz said.

The published report was CyberArk’s way of warning the public about the threat. Disclosing the weakness also had a business benefit for the company. In the blog post, it pitched its own security product, which it said “will be extremely beneficial in blocking attackers from getting their hands on important assets like the token-signing certificate in the first place.”

The report initially received little attention. Harris, however, seized on it. He said he alerted Morowczynski and Simons from the product group as well as the MSRC. The situation was more urgent than before, Harris argued to them, because CyberArk included the proof of concept that could be used by hackers to carry out a real attack. For Harris, it harkened back to Morowczynski’s worry that flagging the weakness could give hackers an advantage.

“I was more energetic than ever to have us actually finally figure out what we’re going to do about this,” Harris said.

But the MSRC reiterated its “security boundary” stance, while Morowczynski reaffirmed the product group’s earlier decision, Harris said.

Harris said he then returned to his supervisors, including Hayden Hainsworth and Bharat Shah, who, as corporate vice president of the Azure cloud security division, also oversaw the MSRC. “I said, ‘Can you guys please listen to me,’” Harris recalled. “‘This is probably the most important thing I’ve ever done in my career.’”

Harris said they were unmoved and told him to take the problem back to the MSRC.

Microsoft did not publicly comment on the CyberArk blog post at the time. Years later, in written responses to Congress, Smith said the company’s security researchers reviewed the information but decided to focus on other priorities. Neither Hainsworth nor Shah returned calls seeking comment.

Defusing a ticking bomb

Harris said he was deeply frustrated. On a personal level, his ego was bruised. Identifying major weaknesses is considered an achievement for cybersecurity professionals, and, despite his internal discovery, CyberArk had claimed Golden SAML.

More broadly, he said he was more worried than ever, believing the weakness was a ticking bomb. “It’s out in the open now,” he said.

Publicly, Microsoft continued to promote the safety of its products, even boasting of its relationship with the federal government in sales pitches. “To protect your organization, Azure embeds security, privacy, and compliance into its development methodology,” the company said in late 2017, “and has been recognized as the most trusted cloud for US government institutions.”

Internally, Harris complained to colleagues that customers were being left vulnerable.

“He was definitely having issues” with the product team, said Harris’ former Microsoft colleague who consulted for the Defense Department. “He vented that it was a problem that they just wanted to ignore.”

Harris typically pivoted from venting to discussing how to protect customers, the former colleague said. “I asked him to show me what I’m going to have to do to make sure the customers were aware and could take corrective action to mitigate the risk,” he said.

Harris also took his message to LinkedIn, where he posted a discreet warning and an offer.

“I hope all my friends and followers on here realize by now the security relationship” involved in authenticating users in AD FS, he wrote in 2019. “If not, reach out and let’s fix that!”

Separately, he realized he could help customers with whom he had existing relationships, including the NYPD, the nation’s largest police force.

“Knowing this exploit is actually possible, why would I not architect around it, especially for my critical customers?” Harris said.

On a visit to the NYPD, Harris told a top IT official, Matthew Fraser, about the AD FS weakness and recommended disabling seamless SSO. Fraser was in disbelief at the severity of the issue, Harris recalled, and he agreed to disable seamless SSO.

In an interview, Fraser confirmed the meeting.

“This was identified as one of those areas that was prime, ripe,” Fraser said of the SAML weakness. “From there, we figured out what’s the best path to insulate and secure.”

More troubling revelations

It was over beers at a conference in Orlando in 2018 that Harris learned the weakness was even worse than he’d initially realized. A colleague sketched out on a napkin how hackers could also bypass a common security feature called multifactor authentication, which requires users to perform one or more additional steps to verify their identity, such as entering a code sent via text message.

They realized that, no matter how many additional security steps a company puts in place, a hacker with a forged token can bypass them all. When they brought the new information to the MSRC, “it was a nonstarter,” Harris said. While the center had published a formal definition of “security boundary” by that point, Harris’ issues still didn’t meet it.

By March 2019, concerns over Golden SAML were spilling out into the wider tech world. That month, at a conference in Germany, two researchers from the cybersecurity company Mandiant delivered a presentation demonstrating how hackers could infiltrate AD FS to gain access to organizations’ cloud accounts and applications. They also released the tools they used to do so.

Mandiant said it notified Microsoft before the presentation, making it the second time in roughly 16 months that an outside firm had flagged the SAML issue to the company.

In August 2020, Harris left Microsoft to work for CrowdStrike. In his exit interview with Shah, Harris said he raised the SAML weakness one last time. Shah listened but offered no feedback, he said.

“There is no inspector general-type thing” within Microsoft, Harris said. “If something egregious is happening, where the hell do you go? There’s no place to go.”

SolarWinds breaks

Four months later, news of the SolarWinds attack broke. Federal officials soon announced that beginning in 2019 Russian hackers had breached and exploited the network management software offered by a Texas-based company called SolarWinds, which had the misfortune of lending its name to the attack. The hackers covertly inserted malware into the firm’s software updates, gaining “backdoor” access to the networks of companies and government agencies that installed them. The ongoing access allowed hackers to take advantage of “post-exploit” vulnerabilities, including Golden SAML, to steal sensitive data and emails from the cloud.

Despite the name, nearly a third of victims of the attack never used SolarWinds software at all, Brandon Wales, then acting director of the federal Cybersecurity and Infrastructure Security Agency, said in the aftermath. In March 2021, Wales told a Senate panel that hackers were able to “gain broad access to data stores that they wanted, largely in Microsoft Office 365 Cloud … and it was all because they compromised those systems that manage trust and identity on networks.”

Microsoft itself was also breached.

In the immediate aftermath of the attack, Microsoft advised customers of Microsoft 365 to disable seamless SSO in AD FS and similar products — the solution that Harris had proposed three years earlier.

As the world dealt with the consequences, Harris took his long simmering frustration public in a series of posts on social media and on his personal blog. Challenging Brad Smith by name, and criticizing the MSRC’s decisions — which he referred to as “utter BS” — Harris lambasted Microsoft for failing to publicly warn customers about Golden SAML.

Microsoft “was not transparent about these risks, forced customers to use ADFS knowing these risks, and put many customers and especially US Gov’t in a bad place,” Harris wrote on LinkedIn in December 2020. A long-term fix was “never a priority” for the company, he wrote. “Customers are boned and sadly it’s been that way for years (which again, sickens me),” Harris said in the post.

In the months and years following the SolarWinds attack, Microsoft took a number of actions to mitigate the SAML risk. One of them was a way to efficiently detect fallout from such a hack. The advancement, however, was available only as part of a paid add-on product known as Sentinel.

The lack of such a detection, the company said in a blog post, had been a “blind spot.”

‘Microsoft Is back on top’

In early 2021, the Senate Select Committee on Intelligence called Brad Smith to testify about SolarWinds.

Although Microsoft’s product had played a central role in the attack, Smith seemed unflappable, his easy and conversational tone a reflection of the relationships he had spent decades building on Capitol Hill. Without referencing notes or reading from a script, as some of his counterparts did, he confidently deflected questions about Microsoft’s role.

Laying the responsibility with the government, he said that in the lead-up to the attack, the authentication flaw “was not prioritized by the intelligence community as a risk, nor was it flagged by civilian agencies or other entities in the security community as a risk that should be elevated” over other cybersecurity priorities.

Smith also downplayed the significance of the Golden SAML weakness, saying it was used in just 15% of the 60 cases that Microsoft had identified by that point. At the same time, he acknowledged that, “without question, these are not the only victims who had data observed or taken.”

When Senator Marco Rubio of Florida pointedly asked him what Microsoft had done to address Golden SAML in the years before the attack, Smith responded by listing a handful of steps that customers could have taken to protect themselves. His suggestions included purchasing an antivirus product like Microsoft Defender and securing devices with another Microsoft product called Intune.

“The reality is any organization that did all five of those things, if it was breached, it in all likelihood suffered almost no damage,” Smith said.

Neither Rubio nor any other senator pressed further.

Ultimately, Microsoft won a piece of the Defense Department’s multibillion-dollar cloud business, sharing it with Amazon, Google and Oracle.

Since December 2020, when the SolarWinds attack was made public, Microsoft’s stock has soared 106%, largely on the runaway success of Azure and artificial intelligence products like ChatGPT, where the company is the largest investor. “Microsoft Is Back on Top,” proclaimed Fortune, which featured Nadella on the cover of its most recent issue.

In September 2021, just 10 months after the discovery of SolarWinds, the paperback edition of Smith’s book, “Tools and Weapons,” was published. In it, Smith praised Microsoft’s response to the attack. The MSRC, Smith wrote, “quickly activated its incident response plan” and the company at large “mobilized more than 500 employees to work full time on every aspect of the attack.”

In the new edition, Smith also reflected on his congressional testimony on SolarWinds. The hearings, he wrote, “examined not only what had happened but also what steps needed to be taken to prevent such attacks in the future.” He didn’t mention it in the book, but that certainly would include the long-term alternative that Morowczynski first promised to Harris in 2017. The company began offering it in 2022.

Renee Dudley is a tech reporter at ProPublica. Follow her on X  @renee_dudley.

Doris Burke, a senior research reporter at ProPublica, provided research.

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