October 11th, 2008

The 419

Connections. 419 spam or “Nigerian spam” comes from Nigeria right? Wrong. The vast majority of 419 originates from Amsterdam. Although precise numbers are not known, rough estimates state that approximately 800 people, mostly from Africa, operate 419′s on a non-organized, non-hierarchical and ad-hoc way, which doesn’t mean some of them are not professionals. They even rigged a fake ABN-AMRO bank office where they would meet with their potential victims.

The largest group of the victims are Americans, 22%, followed by the Brits, 6%.

In case you have no idea what I am talking about it’s the following scheme:

  1. The email: you receive an email from say the widow of the former president of some never heard of African state, asking you to help siphon $25 million locked money to a western bank. You can keep the 25% as commission. Utmost discretion, and speed is required.
  2. The bite: Greed is a strong motivator. Whoever responds is lured into a trust relation. Often official documents by local banks or governments are used.
  3. The reeling in: unfortunately, some money is needed to bribe an official or to wire the sum, and well, the rich widow is loaded, but she can’t get to it. You pay the expenses, or bring the money yourself. In the latter case, you are invited to a local bank office, greeted by a white, classy receptionist. All fake of course.
  4. The end: your money is gone.
October 9th, 2008

The bankruptcy of a country (no kidding)

Ok, so banks are tumbling in the US, and here too. Dutch-Belgium Bank-Insurer Fortis has been split and the Dutch part nationalized. The invoice for the tax payer, that’s me, is 16 billion Euros (22 billion USD. On 17 million inhabitants that is, babies included). But that is not what this entry is about. You know I like to write about connections between my “old world” and the US. Literally in between is Iceland. Iceland had an exploding growth of it’s bank system in the last couple of years, using a very (simplified) two step business model:

  1. Lend out money to the credit-hungry US.
  2. Acquire that money in Europe by bidding 0.25% more interest than EVERY competitor in the market.

Easy. Until, oh what a surprise, these contracts with the US banks proved less than rock solid, no repayments were made and darn, those people we promised that 5.25% would actually like to really receive that money. The #1, #2 and #3 banks have been nationalized in the last few days. The European guarantee legislation requires the member states to ensure at least the first 20.000 Euro ($28.000) per bank per person. Guess what? The Iceland economy has collapsed and there is no way they can cough up the money. The Icelandic administration has already indicated that yes there is a treaty and no there is no money. I bet if they are arm twisted in it, they will stall the process, pay out in Icelandic krones and then implode the currency. Wikipedia:

In October 2008, the Icelandic parliament passed emergency legislation to minimize the impact of the financial crisis of 2007-2008. Iceland may face national bankruptcy, because its bank assets are nine times annual gross domestic product of 14 billion Euros ($19 billion). On October 6, Prime Minister Geir Haarde gave an unprecedented address to the nation where he stated that the economy of the Icelandic banks were several times the size of Iceland’s GNP, and if they should collapse, a definite possibility, the entire nation could go bankrupt.

I have no sympathy for people who put all their apples in one basked, being a bank of a minute country that consistently promises more interest than the market. Banks can fail, d’uhhh. I have no sympathy for people who believe another countries administration will put their interests before those of their inhabitants. I have no sympathy for banks, period.

Added: An IMF delegation is on it’s way to Iceland, need I say more?

Added: From my country in this debacle alone: 1.6 billion Euro ($ 2.2 billion), 120.000 accounts

October 8th, 2008

The dodo

the dodo

the dodo

October 8th, 2008

Senator Ted Stevens response to the bank “bailout”

On the eve of the Senate vote to allocate $780 BILLION to assist in bailing out banks and investment firms, after similar legislation was voted down in the House of Representatives I sent both Senator Stevens and Senator Murkowski emails (via their websites) urging them to vote “no” on the legislation. Both Stevens and Murkowski voted “yeh.” Senator Stevens sent a response, I have yet to hear from Senator Murkowski. I note that Senator Stevens reply came from “donotreply@stevens.senate.gov” so I guess he does not want to discuss this matter further. I have included my response to Senator Stevens following his email.

Not one penny of our money should be given over to the banking or the insurance industry to cover their mistakes. I do not believe in Socialism for the Banks and Capitalism for the rest of us. To assist the banks now would make any arguments for a “free market” all that much more a farce. The administration of our President has already interfered with the market by restricting “short sellers.” As I’m sure you are aware short sellers play a vital roll in the market by devaluing overpriced stocks. The administration has “artificially,” in a way tjat would do the former USSR proud, by forcing market prices up without the checks provided by the short sellers.

I would urge you to vote “NO” on any authorization to assist the banking or the investment industries with Federal dollars in order to cover the losses that they themselves have incurred. There are a variety of solutions that the banks themselves could exercise if they really had to.

–>

Dear xxxx [CityKid]:

Thanks for contacting me about your concerns for the Treasury proposal. The Emergency Economic Stabilization Act (H.R. 1424) – the result of negotiations between Congressional leaders, the President and members of his Administration – was passed by the Senate on a bipartisan basis and with my support by a vote of 74-25 on October 1st. The House of Representatives passed this bill by a vote of 263-171, and the President has signed it into law.

There was a great deal of misinformation about this legislation.

The Congress needed to take action to prevent this financial crisis from spreading throughout our economy, further threatening retirement accounts, saving plans for college educations, and a widespread freeze on the ability of individual Americans to obtain credit.

I am told that on September 29th, our Permanent Fund lost over a billion dollars. Without action our nation faced a further credit meltdown, which would mean Alaskans would be unable to borrow to finance a home, a car, or withdraw funds from savings accounts. Our seniors would lose the retirement income they rely on to pay monthly bills and retirement accounts for future retirees would plummet in value. In fact, I heard from several Alaskan seniors that they have already suffered substantial losses in retirement savings, and one who lost $40,000 after the House of Representatives failed to pass economic recovery legislation on September 29th.

Because I shared many of the concerns and misgivings expressed to me by Alaskans, I personally asked Senators negotiating this legislation to include provisions to limit executive compensation and bonuses in this stabilization bill. The bill we passed also requires increased review of the Troubled Asset Relief Program (new oversight), taxpayer protections, foreclosure prevention, and requires that every dollar repaid to the Treasury for assistance under the new law must be used by the Treasury to reduce the federal debt. The Senate also included provisions to temporarily increase the amount of Federal Deposit Insurance – the money in your bank account guaranteed by the government – from $100,000 to $250,000. (The $100,000 level was established in 1980. This is the equivalent of approximately $266,000 now.)

Attached are summaries of the Emergency Economic Stabilization bill prepared by the Senate Banking and Senate Budget Committees that explain these and other provisions in this legislation.

In addition, the bill contains several provisions that many Alaskans asked me to secure, and that had previously passed the Senate, but were defeated in the House. These include a provision that Alaskans receiving payments related to the Exxon Valdez Oil Spill may treat the money as having been received over three years; an extension of the Secure Rural Schools Act, which funds rural schools and communities which were dependent on revenue from timber sales no longer available because of reduced opportunities to harvest timber from Federal forests; and, an extension of renewable energy tax credits. Also, the legislation provides a fix for middle-income Americans who would otherwise be subject to the Alternative Minimum Tax (AMT), a tax originally designed to affect only the wealthiest Americans.

Voting for this legislation was not an easy decision, but, in the final analysis I decided these provisions were important and passage of this bill was necessary to prevent the hardships that would otherwise have seriously affected Alaskans, our small businesses, and our nation’s and our State’s economic growth.

With best wishes,

Cordially,

TED STEVENS
U.S. Senator

Please Note: Do not reply to this email. If you would like to contact the Senator in reference to this or any other issue, please use our website’s contact form at http://stevens.senate.gov/contact.

Dear Senator Stevens,

Thank you for getting back to me. In all honesty, I am very sorry that both you and Sen. Murkowski chose to get behind this legislation. While you posit that credit for citizens might be threatened if you did not vote to spend $700 billion dollars of money that rightfully belongs to the citizens of the country (an amount nearly equal to recent DOD budgets) that is, quite simply, BUNK; reality lies elsewhere and I think you know that. It is the bank to bank credit markets that are in trouble and the legislation that you voted for will do little, if anything, to fix the problems at hand (a very “un-Alaskan” solution I think.) Quite simply, until the “banks” are forced to adopt accounting measures that reveal their true worth, our nations financial crisis, and indeed that of the world, will continue.

I am truly sorry that you chose to support this legislation. I don’t think most of your constituents have the same take on the crisis we now face as you do.

October 6th, 2008

The tears

I wrote about the last night of the proms earlier. On this 2007 last night’s performance the comment of the presenter was “I always think the audience should cry, not the violinist, and that is what he does, he lets YOU cry”. Listen to Joshua Bell, in an arrangement he made himself of Sergei Rachmaninov’s “Vocalise“. And cry.

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October 2nd, 2008

The breach of trust

Skype is a communication platform for instant messaging, video and voice. One of it’s virtues is that the communication is end to end encrypted, meaning any middleman cannot intercept the communications, an important reason I use it a LOT.

In China, you cannot download Skype, only a localized version, distributed by a company called TOM. I already knew this version blocks IM sentences that contain a set of “unsafe” words. What probably not many people know is that when these words are encountered (and god knows what other criteria like usernames), the conversation is being logged by the TOM skype client on (insecure) webservers in China.

Major Findings

  • The full text chat messages of TOM-Skype users, along with Skype users who have communicated with TOM-Skype users, are regularly scanned for sensitive keywords, and if present, the resulting data are uploaded and stored on servers in China.
  • These text messages, along with millions of records containing personal information, are stored on insecure publicly-accessible web servers together with the encryption key required to decrypt the data.
  • The captured messages contain specific keywords relating to sensitive political topics such as Taiwan independence, the Falun Gong, and political opposition to the Communist Party of China. (y-t: I can confirm it blocks the word “fuck” too.)
  • Our analysis suggests that the surveillance is not solely keyword-driven. Many of the captured messages contain words that are too common for extensive logging, suggesting that there may be criteria, such as specific usernames, that determine whether messages are captured by the system.

Sounds a bit like yahoo and google eh?

If you happen to chat with Chinese people, do NOT rely on the security model of Skype. While I am reasonably convinced skype is one of the best secured applications and I like it’s end to end encryption a lot better than my conversations going over say Microsoft’s servers, the Chinese client is proven spyware. And to be honest, it makes you wonder what “our” cient is doing.

Skype, the company allowed this is telling us TOM did this without their knowledge. I am very disappointed.

Added: whoa, this is all over the place. Herald Tribune‘s on it. Others will follow soon.

Added: Skype president’s response.

You may have seen some reports in the media about a security and privacy breach in the software provided by our Chinese partner, TOM Online. I’m writing to let you know where we stand, and what we’re doing to resolve the problem.

Some brief background: In China, TOM is the majority local partner in our joint venture that brings Skype functionality to Chinese citizens. The software is distributed in China by TOM and TOM, just like any other communications company in China, has established procedures to meet local laws and regulations. These regulations include the requirement to monitor and block instant messages containing certain words deemed “offensive” by the Chinese authorities.

It is common knowledge that censorship does exist in China and that the Chinese government has been monitoring communications in and out of the country for many years. This, in fact, is true for all forms of communication such as emails, fixed and mobile phone calls, and instant messaging between people within China and between China and other countries. TOM, like every other communications service provider operating in China, has an obligation to be compliant if they are to be able to operate in China at all.

In April 2006, Skype publicly disclosed that TOM operated a text filter that blocked certain words in chat messages, and it also said that if the message is found unsuitable for displaying, it is simply discarded and not displayed or transmitted anywhere. It was our understanding that it was not TOM’s protocol to upload and store chat messages with certain keywords, and we are now inquiring with TOM to find out why the protocol changed.

We were very concerned to learn about both issues and after we urgently addressed this situation with TOM, they fixed the security breach. In addition, we are currently addressing the wider issue of the uploading and storage of certain messages with TOM.

It’s important to remind everybody that the issues highlighted in yesterday’s Information Warfare Monitor / ONI Asia report refer only to communications in which one or more parties are using TOM software to conduct instant messaging. It does not affect communications where all parties are using standard Skype software. Skype-to-Skype communications are, and always have been, completely secure and private.

I passionately believe in Skype’s mission to enable the world’s conversations. Allowing the world to communicate for free empowers and links people and communities everywhere. Our challenge is to bring this valuable service to people all over, including China, while being transparent to our users and staying within the boundaries of the local laws. We are committed to meet this challenge.

Please note that “fixing” (my emphasis) means: securing the breached webserver where the logs are stored, not killing the logging.

Added: I am not copying Josh’s second post. Yack yack local laws, yack yack continue in the Chinese market, yack yack looking into. BS. My prediction is a follow up version will tell the user the counterpart is using TOM-Skype and will, in very vague words hint that might not be ENTIRELY secure. Trust is plummeting. Oh well, probably everybody will have forgotten about this in less than a week. Again, trust is very affected.

October 2nd, 2008

SCUM 74, US 25.

Good morning all. Sports scores are in (I’m backing the Cubs this year). It’s been a while since I’ve written anything here.

SCUM 74, US (as in you and me) 25.

Throwing money at the rich as the U.S. Senate is hoping to do with their 74 to 25 vote in favor of giving private investors that dorked up $$$$$ (I think Michael Moore called it ‘stealing the silverware on the way out.’) will NOT fix the financial sectors problems. The problem of confidence is between the banks; especially in overnight lending. Simple fix – PASS LEGISLATION which makes the banks accountable for what’s on their books (audit required). Once that is done lending will resume since Bank A will be confident that bank B will still be there in the morning. It’s a f__k of a lot cheaper for us, and would be far more effective. Granted the FDIC will have to cover the losses of some depositors who are using banks that hold more trash than cash, but it would not cost the $700 billion (and probably more dollars) the “crisis” bailout bill demands. I am truly amazed at the propaganda currently being generated by the corporate press – they are not covering the issue; they are just, it seems to me, trying to confuse us.

Of course there are host of other solutions available – stop limiting the short sellers, since shorts keep stocks from being over valued (ooops, the free market folks in The Bush Administration have already put their finger on the scales by limiting which companies can be traded “short” [about 900 of them] and forced the value of stocks up beyond what they are worth – Free Market my ….). Help the citizens (tax payers) with health care and education costs. After all, the number one reason for mortgage defaults is unpaid medical bills. Wake up “America.”

Have a nice day (and call your Congressional Representative NOW).