A 'Subprime' National Intelligence Estimate

We’ve had to upgrade the computer servers here in the secret lair of the Peoples Weekly Brief as email responses to our “Who would you tell to shut up?” contest continue to pour in.

We’ve also had to cancel all leave plans for the PWB mailroom staff and bring in extra interns from the nearby Hooters in an effort to review each and every email.

There are some terrific entries, many of which need to be redacted if we have any chance of including them in next week’s column. The shipping department is on standby in an effort to get cool PWB crap boxed up and shipped to contest winners before Christmas arrives.

Oh, if my use of the word Christmas offends anyone, please feel free to substitute whatever holiday you’d like to celebrate. Or, if you’re a sensitive atheist or agnostic, please leave that space blank. I don’t care. I celebrate what I want, you celebrate what you want and we'll all meet in the middle to sing generic happy holiday songs around some bogus symbol designed to be inclusive of all known beliefs, issues and concerns.

Me, I just finished nailing a big Santa (hope the sentence doesn’t end there) up on the roof of the house along with his reindeer taking flight and an old-timey Merry Christmas sign. One more hot toddy and then I’m off to string some lights around the house, even though it’s snowing (ish) outside. For any kids in the audience, don’t drink and play with electricity, particularly in the rain or snow.

The tree went up in the house this weekend, an event that never fails to confuse my dog, a well meaning Jack Russell named Idiot. Meanwhile the PWB crew put up an 8 foot noble fir in the office on Monday, an event that never fails to excite the staff. If the tree is here, can annual bonuses be far behind?

Actually, in a down economy, the answer is yes, they can be far behind. Unless of course you’re a big-swinging he or she down on Wall Street. In which case, by all means, stuff those bonus envelopes till they bust at the seams. It’s hard to fret about developments in the economy (Crisis? What crisis?) when you got all that holiday jingle janglin’ in your pockets.

Logic tells me that someone, somewhere, is actually responsible for the subprime crisis and the billions and billions of dollars being written off by various banks. It’s just that so far, oddly enough, no one has put their hand up and claimed responsibility. If you’re on Wall Street, particularly in an uber-clever operation like Goldman Sachs, the only reason you’re putting your hand up is to grab your own personal sack of Christmas cash.

On the other side, the folks that signed up for mortgages they knew they couldn’t afford aren’t taking responsibility. After all, they was duped. Bad men rode into town, drank all the whiskey and then forced the townfolk to take out mortgages they ultimately couldn’t afford. Where the hell’s Clint Eastwood when you need him?

So, if the banks aren’t responsible, and the mortgage brokers claim they were just doing their job (and providing people with the American dream of home ownership), and the citizens who should have known better aren’t accountable because they didn’t sign up for personal responsibility, then we have a conundrum.

We have to ask ourselves, who gets hosed for the actions of these various participants? Sure, the heads of Citi and Merrill Lynch lost their jobs, but does getting sacked still hurt if you get tossed out of your office only to land on hundreds of millions of dollars in compensation? Maybe I hang with the wrong crowd, but I don’t know anyone who couldn’t soothe their tarnished reputation and bruised ego with a few hundred million in severance pay.

Then of course there’s the handwringing over how to replace the big brains at the top of these organizations. Oh my God, where can we find another stuffed suit who can guide us as we engage in risky, questionable behavior and ultimately write down billions? There’s a myth, perpetuated by business school graduates and country club spouses, that the world only has a small number of giants capable of running large organizations.

What a load of crap. You, me and Idiot my dog could take over any number of multinational corporations or financial institutions and lead them along the same path of mediocrity, personal enrichment and occasional success largely based on world events uncontrollable by you, me and Idiot.

So now the government steps up to the plate to have a look-see. I asked the PWB research staff to pull together some numbers, but they broke into the eggnog and bourbon early and currently are about as useful as sidepockets on a cow. However, even without the benefit of exhaustive research, I still feel pretty comfortable guessing that the government’s involvement in sorting out the subprime mess will ultimately squeeze blood out of my wallet.

I’m no economist, although I always get a good chuckle out of the Lafler curve, but I’ll bet there’s some obscure formula hiding in a college textbook somewhere that proves without a shadow of a doubt that average taxpayers who had no connection to the lending, brokering or bum mortgage signing aspects of this crisis will ultimately get smacked around. Confusing? Not really. In economic terms, we refer to this phenomenon as the Chump Paradigm.

You want something confusing, try figuring out the latest National Intelligence Estimate on Iran. I’ll pause for a moment while we all admire the excellent segue way. Moving on… this new NIE, requested by Congress earlier in the year, is the first on Iran since an Estimate produced in 2005. This latest document is causing quite the stir. It almost qualifies as a hullabaloo.

First, it’s important to note that, despite the involvement of all the agencies within the Intelligence Community, the title of this document does include the word “Estimate”. That’s a good clue. Originally, shortly after WWII, these documents were called National Intelligence Guesstimates. The title was then changed to National Intelligence Best Guesstimates sometime in the 50s.

Eventually, as intelligence collection became more sophisticated, they were renamed National Intelligence Magic 8 Balls. That title became classified a decade later and the term NIE was substituted for security purposes.

While I can’t give away too much about the inner workings of the intelligence community and the National Intelligence Council, I can shed some light on the importance of the Magic 8 Ball as it relates to the production of these important intelligence documents. Developed by the CIA during the height of the Cold War, the Magic 8 Ball has been a critical tool in the operation officer’s kitbag for decades.

Faced with a shortage of well placed, vetted human sources, the Magic 8 Ball soon proved its worth when evaluating and reporting on difficult or hostile regimes. In consultation with NSA, MI6 and, as every good conspiracy theorist knows, a secret cabal located in the mountains of Switzerland, the CIA scientists realized through taxpayer funded trial and error that operational guesswork, done properly, could occasionally substitute for trustworthy penetrations of hostile regimes.

Over the years the 8 Ball Unit within the bowels of the intelligence community developed and refined the capabilities of the Magic 8 Ball to the point where its answers and predictions are almost as good as having a real human source. From the Bay of Pigs to the Iran of today, operations have counted on the Ball’s ability to generate such prescient intel findings as “Concentrate and ask again”, “My sources say no”, “It is certain” (later replaced with “It is slamdunk”) and the IC’s favorite, “Cannot predict now”.

A civilian version of the 8 Ball hit the market several decades ago, but lacked the encryption software, gyro mechanism and attached bottle opener that made the classified version such a critical part of our intelligence estimate process.

Hopefully the above will help as you read through this latest document on Iran. Frankly, we can distill this NIE down to one key comment; “… the intelligence agencies do not know whether it Iran currently intends to develop nuclear weapons.”

In straight forward terms, this latest NIE and the 2005 NIE agree that Iran is enriching uranium, could develop nuclear weapons by sometime around 2010 to 2015, has been deceptive in their program in the past and should be considered the most serious state sponsor of terrorism. Where it differs is that in 2005 the intel community essentially said Iran was hellbent on producing nuclear weapons, while the 2007 document says, uh, we don’t know what their intent is… could be good, could be bad.

I suppose then the question could be—given our lack of excellent human sources (always the best way to determine intent in an intel target)— should we take the Iranian government at its word that they just want a peaceful, civilian nuclear energy capability?

My Magic 8 Ball says “Don’t count on it”.

As always, let us know your thoughts and comments.

Send your emails to peoplesweeklybrief@hotmail.com

Till next week, when we announce the winners of our Just Shut Up holiday contest, stay safe.

Respond to the Writer

Mike Baker served for more than 15 years as a covert field operations officer for the Central Intelligence Agency, specializing in counterterrorism, counternarcotics and counterinsurgency operations around the globe. Since leaving government service, he has been a principal in building and running several companies in the private intelligence, security and risk management sector, including most recently Prescience LLC, a global intelligence and strategy firm. He appears frequently in the media as an expert on such issues. Baker is also a partner in Classified Trash, a film and television production company. Baker serves as a script consultant and technical adviser within the entertainment industry, lending his expertise to such programs as the BBC's popular spy series "Spooks" as well as major motion pictures. In addition, Baker is a writer for a BBC drama to begin production in July 2007.

Mike Baker is the Co-Founder of Diligence LLC, a leading global intelligence, security and risk management firm. Prior to starting Diligence, Mike spent over a decade and half with the CIA as a covert field operations officer. He is a regular contributor in the national and international media on intelligence, security, counterterrorism and political issues. He appears regularly on Fox News, as well as other major media outlets.