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Originally published Saturday, March 22, 2014 at 8:01 PM

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NSA leaker singles out Amazon on encryption

NSA leaker Edward Snowden takes a jab at Amazon. Also: Zillow finds Americans still upbeat about homeownership; lawyer replaced in probe of accounting at L & L Energy; and Costco, Bartell avoid tobacco pressures for now.


By Seattle Times business staff

Zillow’s Housing Confidence Index

All 20 metro areas in Zillow’s Housing Confidence Index scored above 50; anything less shows negative sentiment. Here are the top ranked metros and their index score.

1. San Jose (69.4)

2. Miami (67.5)

3. San Diego (67.2)

4. Phoenix (66.7)

5. San Francisco (66.4)

6. Washington, D.C. (65.8)

7. Los Angeles (64.4)

8. Dallas (64.4)

9. Denver (64.4)

10. Seattle (64.2)

Source: Zillow

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While Edward Snowden’s revelations about domestic spying by the National Security Agency have embarrassed several large tech companies, including Microsoft and Google, for enabling government snooping, one tech giant that avoided Snowden’s spotlight was Amazon.

Until Tuesday, that is. At the intellectual gabfest, TED 2014, in Vancouver, B.C., Snowden criticized the lack of encryption on the websites of many U.S. Internet companies.

“The reason this matters is today, if you go to look at a copy of ‘1984’ on Amazon.com, the NSA can see a record of that, the Russian intelligence service can see a record of that, the Chinese service can see a record of that, the French service, the German service, the services of Andorra,” Snowden said, speaking remotely from Russia. “They can all see it because it’s unencrypted.”

Like many Internet companies, Amazon doesn’t use HyperText Transfer Protocol Secure, an encryption technology that keeps users’ communications, identities and web browsing private on its site when shoppers initially look though items. (Web surfers know it’s in use when the address for the site they are visiting begins with “https.”)

Amazon does, however, encrypt personal account Web pages, as well as pages where customers buy merchandise.

Snowden said he didn’t mean to “single out” Amazon, but then proceeded to do so.

“The world’s library is Amazon.com, but not only do they not support encryption by default, you cannot choose to use encryption when browsing through books,” Snowden said. “… All companies need to move to an encrypted browsing habit by default for all users who haven’t taken any action or picked any special methods on their own. That’ll increase the privacy and the rights that people enjoy worldwide.”

An Amazon spokesman declined to comment.

— Jay Greene: jgreene@seattletimes.com

Owning a home remains a goal

Owning a house is still viewed by a majority of homeowners and renters as the best long-term investment a person can make, according to a new survey.

Real-estate website Zillow this month unveiled its U.S. Housing Confidence Survey and a new set of leading indicators designed to gauge consumer demand and expectations in 20 housing markets.

The Seattle company’s twice-a-year national survey involves interviews with more than 10,000 people and is used to develop the Zillow Housing Confidence Index.

“This housing-confidence data is a critical input to our understanding of consumer behavior, and where real-estate markets and the economy may be heading,” said Karl Case, a senior fellow at the Harvard Joint Center for Housing Studies and an adviser to Pulsenomics, which designed and managed the survey for Zillow. He’s also the Case in the S&P Case-Shiller Index of home prices.

In the Seattle metro area — King, Pierce and Snohomish counties — 44 percent of renters in the survey said owning a home was “a specific goal they were determined to reach,” while another 18 percent said they “thought about it a lot.”

Sixty percent of renters said they expected to buy a home within the next five years — 10 percent said within the next year — while a quarter said they never expected to buy or weren’t sure.

Over the next 12 months, about a quarter of owners and renters expect appreciation to be flat, while another 45 percent expect values to rise less than 10 percent.

The indexes show confidence in the housing market is strong in all 20 metros: All scored above 50, which Zillow says indicates positive sentiment.

Cities in the West — San Jose, San Diego, Phoenix, San Francisco, Los Angeles, Denver and Seattle — dominate the list of the top 10 most confident metros.

Even Las Vegas, where Zillow estimates the median home value is down 45 percent from its 2006 peak, is brimming with confidence in the housing market, the survey suggests.

“If you look at markets that were hard hit during the housing bust, they’re fairly confident now,” said Svenja Gudell, director of economic research at Zillow. The plunge in home values “didn’t destroy those people’s aspirations to buy a house. It’s still part of the American dream.”

— Sanjay Bhatt: sbhatt@seattletimes.com

Probe drags on at L&L Energy

It’s been six months since a special committee of board members at L&L Energy, the Seattle-based operator of Chinese coal mines, was named to investigate allegations that the company deceived investors about its operations in China’s rural southwest provinces.

But a half year is apparently not enough to untangle the matter.

This past week L&L announced that Seattle attorney Mark Bartlett, of Davis Wright Tremaine, a former federal prosecutor named Sept. 20 to assist the investigation, has been replaced.

His successor is an attorney experienced in Chinese transactions, Nicholas Chen, managing partner of Pamir Law Group, which has offices in Beijing, Taiwan and the U.S.

Chen’s “language abilities and tremendous understanding of the Chinese business environment will be important assets as we look to complete our investigation as timely as possible,” said the committee’s chairman, Jincai Yang, a former executive at China’s largest coal company, in a statement issued by L&L. The company did not respond to an interview request.

Shareholders are no doubt wondering when that investigation may wrap up and what it may conclude; they’ve been stuck since Nov. 18 when Nasdaq halted trading in L&L’s shares (ticker symbol LLEN). Meanwhile, longstanding shareholder lawsuits against the company and its directors are scheduled for mediation in May.

Changing legal counsel is the second unusual bump in the road for the internal probe.

Two months after the board committee’s investigation began, its leader resigned as an L&L director, complaining that management “has not kept me fully informed as to the degree and extent of ongoing government and regulatory investigations.”

— Rami Grunbaum: rgrunbaum@seattletimes.com

Costco, Bartell not on tobacco hot seat

Twenty-eight of the nation’s Attorneys General, including Washington state’s, are trying to shame five of the biggest health-products retailers in the nation to follow in the steps of CVS and stop selling cigarettes and other tobacco products.

Two major pharmacy retailers based in Washington state — Bartell Drugs and Costco Wholesale — aren’t on the list. For now.

Last week, letters sent out by the attorneys general went out to Wal-Mart, Walgreen, Rite-Aid, Safeway and Kroger, asking them to remove tobacco merchandise from their shelves.

The message is the latest in an accelerating movement to expel cigarettes from retailers that also run pharmacies. Cities like San Francisco and Boston already ban tobacco sales in pharmacies.

“Pharmacies and drugstores, which increasingly market themselves as a source for community health care, send a mixed message by continuing to sell deadly tobacco products,” said New York Attorney General Eric Schneiderman, who along with Ohio’s Mike DeWineone is leading the effort.

A spokesman for Seattle-based Bartell, a large regional drugstore chain, said the company had no comment. Costco Wholesale didn’t respond to a request for comment.

Public pressure may affect these companies differently, though.

Costco is one of the nation’s largest seller of pharmacy products (just below Kroger in one such industry ranking) — but it is also a warehouse retailer with a big business clientele, including firms such as restaurants and bars that use Costco as a cigarette wholesaler.

That has earned it an exemption in at least one town where pharmacies are forbidden to retail tobacco products: Everett, Mass.

According to the Massachusetts Tobacco Cessation and Prevention Program, the town allows Costco to sell tobacco to Costco members who are licensed vendors.

— Angel Gonzalez: agonzalez@seattletimes.com



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