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Posts Tagged ‘United States’

Cyber Attacks Force EU to Close Emission Trading System

In Financial Markets, Health and Environment, International Econnomic Politics, Law & Regulations, Natural science, Quantitative Finance, Technology, Trading software, Uncategorized, Views, commentaries and opinions on 22.01.11 at 03:15

A series of cyber-attacks on national registries, where carbon permits are stored, have forced the EU to close its emissions trading system (ETS) for at least a week. The European Commission posted the announcement on its website on Wednesday after Czech Republic-based firm Blackstone Global Ventures said about €6.8 million of carbon allowances appeared to have disappeared. Thefts on electronic registries in Austria, Greece, Poland and Estonia have also been reported over the last days.

“They will over time undermine the credibility of carbon trading as a policy measure.”

Kjersti Ulset


After discovering unauthorized trading on its account on Wednesday, Blackstone contacted the Czech registry OTE AS, which promptly closed all operations and began an investigation. The Paris-based BlueNext SA, operator of the world’s biggest spot exchange for permits, followed suit, as did registries in Poland and Estonia, before the EU finally imposed a region-wide shutdown.

It’s not the first time cyber criminal have been trading stolen permits at the international ETS market, but never has the activity been so comprehensive that the regulators have been forced to close the whole market.

“Incidents over the last weeks have underlined the urgent need for enhanced security measures,” the EU commission says in its announcement of the closure.

The bloc’s ETS system will be down, at least until 26 January.

Full statement

Q&A’s

A Criminals Market

According to The Guardian, European Authorities estimate that up to 90% of the whole market volume is plain fraudulent activities.

Belgian prosecutors highlighted the massive losses faced by EU governments from VAT fraud today after they charged three Britons and a Dutchman with money-laundering following an investigation into a multimillion-pound scam involving carbon emissions permits.

The three Britons, who were arrested last month in Belgium, were accused of failing to pay VAT worth €3m (£2.7m) on a series of carbon credit transactions.

European authorities believe the EU has lost at least €5bn to carbon-trading VAT fraud in the last 18 months.

Last month, the European police agency Europol reported that the European Union’s Emissions Trading Scheme had been victim of fraudulent trading activities over the past 18 months, worth €5 billion for several national tax revenues.

Europol, the EU’s law-­enforcement operation, fears the fraud will be used in other areas, especially gas and electricity trading markets, after criminals found VAT fraud was one of the most lucrative financial frauds.

The Most Lucrative Financial Fraud

Wednesday’s announcement and similar cyber-attacks have also damaged the EU initiative, together with reports of tax fraud and the recycling of used credits, the EUobserver.com reports.

“They will over time undermine the credibility of carbon trading as a policy measure,” says Kjersti Ulset, manager at Point Carbon, a company that reports on Europe’s emission trading, carried out in a network of registries across the union.

Despite its pioneering position, Europe’s ETS system has attracted criticism over its six years of operation, with some businesses saying it threatens the bloc’s competitiveness, while NGOs argue emission thresholds have been set too high.

By placing a price on carbon, Europe’s trading system is designed to lower company emissions and therefore protect the environment from global warming. Corporations received emission permits for free under the first phase (2005-2007) of the scheme. Some, however, are forced to pay for a portion of their permits.

The European emission trading system is the world’s largest, as the US plans for a similar cap-and-trade scheme was blocked by the US Senate last year.

Carbon permits are, however, traded as ordinary securities at the Chicago Carbon Exchange.

Brussels wants to see energy companies buy all their permits with their own money from 2013 and onwards, with other heavy industries gradually phased in by 2020.

China experts suggest pilot ETS projects could appear in Beijing’s next five-year plan, set to be approved in March.

Here at The Swapper we have been skeptical to the ETS all along.

It’s an artificial market, created on basis of nice thoughts, without a real supply/demand situation and is regulated in a way the is more similar to a pharmacy than a financial market.

But what is really worrisome, is the sharp increase in this kind of activity.

Just wait till you see the Chicago Board Option Exchange gets hacked!

Related by The Swapper:

Bank of America Sets Up War Room, Hires Army of Lawyers

In Financial Markets, High Frequency Trading, International Econnomic Politics, Law & Regulations, National Economic Politics, Technology on 22.01.11 at 01:18

Wikileaks, and its founder Julian Assange, has certainly stirred up some murky waters releasing confidential documents and emails on government activities. Recently Assange stated that he has a large batch of confidential documents that could lead to problems for a major bank, and in at least one interview he has identified that bank to be Bank of America. And the bank are taking the possible threat serious – deadly serious! So does the US Securities and Exchange Commission.

“The nation’s largest bank has set up a war room and assembled a S.W.A.T.  team of lawyers.”

FOX Business Network


According to FOX Business, the largest US bank has set up a war room and assembled a S.W.A.T.  team of lawyers and company officials to deal with the matter if anything should arise. And now the US Securities and Exchange Commission (SEC) is focusing in on the case too.

The Securities and Exchange Commission is keeping a close eye on Bank of America’s (BAC) Wikileaks dilemma to determine whether anything that the info-leaking website might release should have already been turned over to regulators who have conducted numerous investigations into the bank’s activities, FOX Business Network has learned.

The same goes for WikiLeaks.

It is, in fact, illegal to withhold information about criminal activities.

See also: Wikileaks Obstruction of Justice?

If and when the document dump occurs, the SEC – Wall Street’s top cop –  will be examining the material to determine if Bank of America has failed to include the emails and other documents in demands for information the commission has made as part of its many investigations into BofA activities.

Bank of America has been the subject of several high-profile probes by the commission, including issues surrounding its Countrywide Financial subsidiary, and its ill-fated purchase of Merrill Lynch during the dark days of the financial crisis in 2008.

Countrywide, which was the largest issuer of so-called subprime mortgages, has been accused of issuing mortgages to people with little if any documentation of work history or  means to repay the loans.

Neither SEC’s spokesman or BofA’s spokesman had no immediate comment, FOX reports.

If Bank of America purposely failed to turn over documents involving an investigation, the bank could face possible criminal charges of obstructing justice.

But so far, BofA has said that despite all the talk about it being a target, it has no evidence that Assange’s organization has documents involving the bank.

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MORE:

Bank of America vs. WikiLeaks, the inside story
WikiLeaks should motivate information security managers
Bove: WikiLeaks bluffing about Bank of America
The Most Sued Companies in America

Related by The Swapper:

Mass Animal Death Mystery Just Got More Mysterious

In Health and Environment, International Econnomic Politics, Natural science, Philosophy, Technology, Views, commentaries and opinions on 20.01.11 at 02:49

This is now beyond weird – its plain spooky. Reports of mass animal deaths keeps coming in. Any plausible explanations, however, is totally absent. On Tuesday, 200 cows was found death on a farm in Portage County, Wisconsin, USA. Cause of death is yet to be determined. Yesterday a large number of dead, half rotten, fish was found floating in the area around Stjernøya in northern Norway. And here neither fishermen or authorities are able to figure out what kind of fish it is.

“It was a sad sight, and the whole fjord smelled absolutely terrible. It became worse further up the fjord where large amounts of fish was floating, partially disintegrated. All down in the fjord, it looked as if there were large quantities of dead fish at the bottom.”

Tor Mikkola


The Norwegian broadcasting Cooperation (NRK) reports of large amounts of dead fish found in Kjerringfjorden at Stjernøya in northern parts of Norway. At the moment, no ne can say where the fish originally comes from. And even more odd – no one can say for sure what kind of fish it is.

Local resident, Tor Mikkola, who first discovered the dead fish, tells NRK that it looked like herring at first, “but after looking a bit closer on some of them it looked more like saith,” he says.

These parts of Norway is traditionally populated by fishermen who usually knows what there is to know about fish.

Elisabeth Arild at the local FSA in Alta says that she is uncertain about what type of fish it is, based on the pictures she has seen.

“It is difficult to conclude anything just by looking at the pictures. It is perhaps small saith, that are not gutted. It may be from a fishing device that has been left there in where the fish has died,” she says, but points out that this is pure speculation.

The dead fish in the Norwegian fjord would not have been a big deal if it wasn’t for all the other cases of mass animal death being reported at the moment.

It happens from time to time that large amounts of fish gets killed by diseases, or other natural causes.

And there’s a lot of fish farming in the area. Last year one producer of salmon had to clean up 50 tons of fish who allegedly had died of hypoxia – lack of oxygen.

But the ting is; mass fish kills have also been reported in the US, Brazil and New Zealand, along with 40,000 dead crabs that washed ashore on the British beaches.

In addition it’s been reported that thousands of dead birds fell from the sky in Arkansas on New Year’s Eve, following a massive fish kill just 100 miles away days earlier.

In the week following, other mass bird deaths were reported in nearby Louisiana and Kentucky.

Birds were also reported to fall dead from the sky in Italy and Sweden, and more recently similar incidents have been reported in California and Alabama.

And now – cows.

200 Dead Cows

200 cows were found dead Friday on a farm in Portage County, Wisconsin, AP reports.

The dead cows had to be removed with semi-trucks. The rest of the farm has not been quarantined, as officials say no threat is posed toward humans or other animals.

The owner of the dead cows was working with a local veterinarian, who initially believed a virus such as infectious bovine rhinotracheitis (IBR) or bovine virus diarrhea (BVD) could be the culprit, according to The Wausau Daily Herald.

WSAW News reports that more recent updates have suggested pneumonia as the cause of the mass cow deaths, though such widespread cases of pneumonia are rare.

Tests are still underway to determine what is responsible.

(WSAW’s full video report here.)

In a recent news report, a veterinarian says he believes the cows died of acute interstitial pneumonia

Investigators are, however, still working to determine what caused the death of 200 steers in Portage County.

Many explanations have been offered for the various mass animal deaths, with everything from fireworks, semi-truck collisions, overeating and cold weather blamed for the birds’ deaths.

Cold weather has also been pinned to likely be the cause of many of the fish and crab deaths, as well.

According to some experts, mass animal deaths are not all that uncommon.

But the fact remains: There has been no exact and plausible explanation in any of these incidents.

As I said, this is now beyond weird.

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Related by The Swapper:

Who Killed The Blackbirds? The Aliens or Al Qaeda?

Low-Oxygen Zones In Oceans Worry Scientists

More Mysterious “Monster Fish” Comes To Surface

Norway: Police To Investigate “Monster Fish”

Coldest Winter In 1000 Years; Start Of New Ice Age?

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The Economic Impact of Higher Oil Prices

In Financial Markets, Health and Environment, International Econnomic Politics, Views, commentaries and opinions on 17.01.11 at 15:54

Crude oil is rapidly closing in on the 100 dollar mark, most analyst believe it will break through the barrier in 2011. The impact of this on global production and economic recovery, is a slackening of consumer demand, according to future and commodity expert Ole S. Hansen at Saxo Bank.

“In other words, the only cure for higher oil prices is higher oil prices!”

Ole S. Hansen


The commodity shock and subsequent financial crisis back in 2008-09 led to a dramatic reduction in the global demand for crude oil. Demand from OECD nations fell off a cliff. This initially resulted in a 110 dollar collapse of the price of WTI Crude oil from 2008 to the early part of 2009.

Over the past two years the price of oil has steadily recovered half of that collapse on the back of continued strong demand from non-OECD members, especially China. OECD nations began seeing a pick-up in demand during the second half of 2010. According to the IEA, total global demand reached an all time high of 88.7 million barrels per day during 3Q10, a rise of 3.3 million bpd year on year.

“Given the continued positive growth assessments among emerging market nations and the boost that the US economy is receiving from the second round of quantitative easing and the new payroll tax break, global oil consumption is expected to expand by 1-1.5 million bpd in 2011. A rise of this magnitude will mean tight supply lines and the risk of higher prices,” Hansen writes in his latest analysis.
The average price of WTI crude during 2010 was just under 80 dollars per barrel after having traded in a relatively tight range for most of the year. Only in the last quarter did we see a sustained rally above 80 dollars a barrel on the back of the strong pick-up in demand. Most of the major research houses now predict average prices above 90 dollars for 2011 with the risk pointing towards a move above 100 dollars during the year.

“What kind of impact will this have on the still fragile economic recovery among OECD nations? To answer this question let us have a look at the U.S., which consumes approximately 22 percent of global production, of which nearly half goes to gasoline consumption.”

Above is the chart of the U.S. daily average gasoline price compiled by the American Automobile Association. The annual average price has moved higher over the last two years after the price shock back in 2008.

Prices during 2010 were relatively stable as the supply and demand situation on WTI crude was relatively balanced. Towards the end of the year the gasoline price began to move higher in line with crude oil and is currently sitting some 32 cents above the 2010 average.

“The annualized economic impact for every one cent rise in gasoline prices in the US is approximately 1.5 billion dollars, so US consumers are faced with a bill of an extra 48 billion dollars this year (approximately 0.3% of GDP) if gasoline prices stay at their current levels. And even if crude oil prices remain the same, gasoline prices will likely rise at least another 10-15 cents due to the shift to more expensive summer blends that occurs every spring. Even a rise of that magnitude would put us back at the 2008 average price, and a rise above 100 dollars a barrel would put us above that level in the spring and summer.”

A one dollar increase in the price of gasoline from the 2010 average to 3.78 dollars per gallon would result in 150 billion dollars less to the consumer and would be the approximate equivalent of a one percent reduction in GDP.

According to Saxo Bank, is the biggest risk of higher prices is a squeeze on margins and the relative in-elasticity of demand means a higher percentage of consumer spending goes to gasoline expenditures – particularly in the US, where taxes make up a much smaller percentage of the price, relative to other developed nations. Oil increases will come straight out of the bottom lines of corporations with energy intensive inputs, because their pricing power is still relatively modest considering the hangover and output gap from the last recession.

“This would put a huge additional burden on local authorities, whose budgets are already very hard pressed (school buses, city buses, etc..) and road construction activity would have to slow unless budgets are expanded to compensate for higher costs,” Hansen points out.
Adding: “Hardest hit by any increase would be emerging markets, however, as their use of oil per unit of GDP is still far higher than in the developed world. It will be interesting to see how the superior emerging market growth story will function of crude oil trades above 100 dollars a barrel for any significant period of time.”

Ole S Hansen

“Eventually, the only cure to higher oil prices is higher oil prices, which experience shows us do eventually crimp demand and bring supply and demand back into balance. During hurricane Katrina in the US, for example, the spike in gasoline prices saw year-on-year gasoline demand fall as much as -3% in the absence of a recession. As prices rocketed well above 100 dollars per barrel and the US lurched into a recession, demand fell even further. We would suggest that any further rise in prices from here will begin to see a slackening in demand,” he concludes.

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Internet Nuke Bomb Ready To Blow (Update)

In Financial Engeneering, Financial Markets, Health and Environment, High Frequency Trading, International Econnomic Politics, Law & Regulations, Learning, National Economic Politics, Quantitative Finance, Technology, Trading software, Uncategorized, Views, commentaries and opinions on 16.01.11 at 20:29

The Swapper have been warning about this since last summer when the mysterious Stuxnet worm was discovered at several critical energy and water supply facilities around the world. However, research by Symantec have later reveled that 60% of the infections are found inside Iranian borders. The threat from cyber space has risen to the top of the list over potential global risks in 2011, alongside pandemic diseases and terrorism. The internet, once seen as the solution to all of mans problems, have instead become one of the most severe threats to all of us.

“The primary involvement of states in cyber security, as both protagonists and principal targets, fundamentally changes the nature of the risk.”

Eurasia Group


By the end of 2010 McAfee Security counted 60.000 new pieces of malicious software being released on the internet every day, the hacker attacks on Java platforms (used in practically every security system, including online banks and the Pentagon) rose by 1.200% last year, and for the first time ever the value of theft of digital assets exceeded the theft of physical assets. And for Stuxnet; that’s only the beginning.

More than 100 foreign intelligence organizations are trying to break into US networks, Deputy Defense Secretary William Lynn wrote in the September/October issue of the journal Foreign Affairs. Some already have the capacity to disrupt U.S. information infrastructure, he says.

The US government’s main code-making and code-cracking agency now works on the assumption that foes may have pierced even the most sensitive national security computer networks under its guard, Reuters reports.

“There’s no such thing as ‘secure’ any more,” Debora Plunkett of the National Security Agency said last month, amid US anger and embarrassment over disclosure of sensitive diplomatic cables by the web site WikiLeaks.

“The most sophisticated adversaries are going to go unnoticed on our networks,” she said.

Plunkett heads the NSA’s Information Assurance Directorate, which is responsible for protecting national security information and networks from the foxhole to the White House.

“We have to build our systems on the assumption that adversaries will get in,” she told a cyber security forum sponsored by the Atlantic and Government Executive media organizations.

The United States can’t put its trust “in different components of the system that might have already been violated,” Plunkett added in a rare public airing of NSA’s view on the issue.

“We have to, again, assume that all the components of our system are not safe, and make sure we’re adjusting accordingly.”

The NSA must constantly fine tune its approach, she said, adding that there was no such thing as a “static state of security.”


And the US is not the only nation struggling to keep its sensitive data safe.

According to Iain Lobban, head of GCHQ, the UK’s core infrastructure is under constant attack. He says thousands of targeted emails are hitting the systems every month, planting worms that cause “significant disruptions.”

Mr. Lobban’s claims are supported in a national security report, naming cyber attacks as a top threat to the UK, alongside pandemic diseases and terrorism, according to the PC Pro Magazine.

A Global Threat

“Cyberspace is contested every day, every hour, every minute and every second,” the British security expert says.

The international risk analysis company Eurasia Group put cyber security at number 3 amongst the top 10 risks of 2011.

“For the past decade, increasingly technologically capable hackers and organized crime organizations have elevated cyber security as a business risk, but not as a political risk. The centralization of data networks, both in energy distribution (the move to the smart grid) and information technology more broadly (the shift to cloud computing) are now metastasizing the cyber risk, and governments are becoming more directly and actively involved in playing both offense and defense in cyberspace. The primary involvement of states in cyber security, as both protagonists and principal targets, fundamentally changes the nature of the risk. The new roles of governments and their antagonists bring geopolitics and cyber security together in three different ways,” Eurasia writes.

(Link to full report below).

Java Systems Under Heavy Fire

One of the main components in practically every security system today is the Java platform, produced by Oracle.

So it’s no wonder that attacks on the Java system increased by more than thousand percent in 2010.

“The number of attacks against flaws in Java has jumped by 1.000% – even outstripping attacks against vulnerabilities in Adobe PDF’s,” Microsoft says.

The attacks against Java code – not the Java script – rose from 500.000 at the beginning of last year to about 6 million in the last quarter of 2010.

Even if Oracle have manged to patch the vulnerabilities in Java, the have the same problem as Adobe – people forget to update their software.

And on top of that; Java is a piece of software that’s used in almost everything, it runs in the background, making more visible components work, PC Pro Magazine points out.

“How do you know if you have Java installed, or if it is running?” researcher at Microsoft Malware Protection, Holly Stewart rightfully asks.

(If you want to know more about Java, click the link below.)

1 in 3 Companies Exposed To Data Theft

According to the latest issue of Kroll Annual Global Fraud Report, suggest that the theft of digital assets has overtaken that of physical stock for the first time ever in 2010.

A Survey, conducted in cooperation with the Economist Intelligence Unit, indicates that the numbers of companies reporting theft of information has risen sharply – from 18% to 27,3% – in 2010.

“There’s a growing awareness among thieves of the intrinsic value of intellectual property,” Kroll vice president, Robert Brenner explains.

The survey also suggest that 88% of the  participating companies had been victim of some kind of fraud over the past year, nearly half of them are now fearful of expanding globally because of the cyber threat.

The experts emphasize that the numbers probably not are 100% accurate.

However, the message is pretty clear.

(Download the report below)

The Most Scary Thing

I guess most of you have heard about the Stuxnet worm/virus/malware in the news by now, and are familiar with the speculations that the extremely sophisticated malware might be some kind of cyber weapon, developed by government related scientists somewhere.

I sounds like a plot in James Bond movie – but the truth might be even more vicious.

Davey Winder

According to experts is not unlikely to be a prototype of the first ever cyber-weapon-of-mass-destruction.

Davey Winder, award-winning journalist, business consultant and security expert, explains:

“So what do we know about Stuxnet and the SCADA (Supervisory Control and Data Acquisition) systems?  Well, we know that Stuxnet is designed to be disseminated via USB sticks, and that it was developed to exploit specific zero-day vulnerabilities in the Windows operating system. To expand on that a little, Stuxnet actually exploits no fewer than four zero-day Windows vulnerabilities, a statement that alone should set the hair on the back of any security analyst’s neck prickling. Zero-day vulnerabilities are extremely valuable to the shady world of both hackers – where a zero-day is a kudos-generating device – and to criminals where zero-day equals pay-day. It’s relatively rare to see a single exploit being used in a piece of malware, and totally unheard of to see four expended in such a way.”

“Ask yourself, why would anyone waste three highly valuable zero-day exploits in a single piece of code when one would most likely do the job? Security experts recognize that this isn’t the modus operandi of the average hacker, nor the average criminal,” Winder writes in a recent article.

Personally, I believe that Stuxnet 2.0 is already out there – it just hasn’t been discovered yet.

The Internet Nuke Bomb

According to trend analyst, Gerald Celente, CEO and founder of Trends Research Institute, will cyber wars cause stir and come to fore in 2011.

And. as Eurasia, he is concerned about the government’s involvement.

.

Here are some of the other highlights in Mr. Celente’s predictions for the year to come:

  • Every citizen in 2011 will realize that we are in the “greatest depression”
  • In 2011, the game’s gonna run out
  • Digital money, not worth the paper it’s not printed on
  • The youth of the world has mountains of debt to climb, and no way to get to the top
  • The greatest fear that governments have is freedom of speech
  • Your growth industries are the gangs
  • Crackdown on crime will lead to crackdown on liberties
  • Drones flying over your city looking in windows
  • The more government loses control, the harder they crack down

You may not take all of Gerald Celente’s forecasts equally serious, but many of the situations he describes is. in fact, common human behavior, observed in times of crisis since the collapse of the Roman empire thousands of years ago and up to our time.

At the latest count by McAfee Security Lab, about 60.000 pieces of malicious software is released on the internet every day.

And here’s how the last six months of 2010 looked like from the security software producer Kaspersky‘s point of view:

.


Perhaps it’s time to upgrade?

 

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The EU Files: USA See Norways Military Proposal As Ridiculous

In Health and Environment, International Econnomic Politics, Law & Regulations, Technology, Views, commentaries and opinions on 16.01.11 at 02:11

First we find that the US Embassy in Oslo for years have been requiting retired police officers to spy on Norwegian citizens, without anyone knowing anything about it, and now we find that the former ambassador to Norway, Benson Whitney, more or less have buried the Norwegian proposals for a future military strategy in the Nordic region. Mr. Whitney right out ridiculed the plans for a renewed Nordic military strategy put forward by former Norwegian foreign minister, Thorvald Stoltenberg, newly leaked documents by WikiLeaks show. The Norwegians are generally very tolerant people, there is a limit.

“The proposals are dreams in polar fog, but may be useful for keeping an eye on polar bears and Russians-”

Benson Whitney


The US ambassadors irrelevant remarks came after the 74-year-old Thorvald Stoltenberg in 2009 put forward 13 ideas for military co-operation. including a NATO-style mutual defense pact among the Nordic countries. Mr. Stoltenberg, highly respected among international politicians, spent several years working on the proposals. But as a result of Mr. Whitney’s mockery, the leaders of  the Nordic and Baltic countries has very little to debate when the meet with the UK prime minister next week to discuss the topic.


Of the 13 proposals, the US ambassador predicted the Nordic mutual defense plan as the most unlikely.

Thorvald Stoltenberg

“Officials including the PM’s foreign policy adviser and the foreign ministry’s political director have privately indicated to us that there is little or no interest in a Nordic solidarity declaration within the Government of Norway,” he reportedly said.

(Despite the fact the Norwegian prime minister, Jens Stoltenberg, is Thorvald Stoltenberg’s son.)

On joint surveillance flights in Icelandic airspace, he added: “Surprisingly, Norwegian officials have been very critical of this proposal … expressing strong dislike for this item.”

The former US ambassador seem to know a helluva lot more about what’s going on inside the Norwegian government than most Norwegians do!

On diplomatic and consular co-operation, Mr Whitney said: “Co-operation between foreign services is much more difficult and will likely be limited to countries where none of the Nordics have representation now.”

Benson Whitney

However, in his concluding remarks, Whitney said: “Joint Nordic transport capabilities, medical teams, amphibious units, a stabilization task force and maritime awareness could be important contributions to UN, NATO or US missions.”

(Well, I assume it was the Norwegian military who provided him with transport back to the USA…)

LINK_1_ Oslo

The Swedish Connection

A separate cable, also release Thursday, illustrate the close connection between the US and Sweden at the time WikiLeaks-founder Julian Assange was arrested in Stockholm on rape charges.

In the cable, dated July 2009, Swedish diplomat Jonas Wendel told the US charge d’affaires in Stockholm, Robert J. Silverman, about sensitive issues in an upcoming EU foreign ministers meeting.

Mr Wendel spoke in detail about the position of fellow US ally Britain on Iran sanctions, but maintained some discretion.

Speaking of whether or not the EU will use tough language against Russia, he said the move is being opposed by the “usual members,” but did not name them.

LINK 2_Stockholm

The Wendel dispatch comes after Swedish diplomat Johan Frisell in 2008, in a previously leaked US cable, dished up painful details on internal EU divisions on the Georgia-Russia war.

This revelation raised some eyebrows among some senior EU officials because internal EU debates are supposed to be kept secret.

Mr. Wendel indicated that EU countries are capable of sticking together in times of crisis.

Today we may see the ironic in these statements.

LINK 3_Russia

No Knowledge

Commenting on whether EU states might withdraw their ambassadors from Iran after it detained a British embassy worker, the cable said: “Solidarity among EU members is strong, and if the discussion is emotionally charged, then the ministers might agree to a withdrawal.”

And Swedish foreign minister Carl Bildt, in a dispatch dated December 2009 and published in December 2010, gave a partly upbeat opinion on the newly-minted EU foreign affairs chief Catherine Ashton.

Mr Bildt said that he “knew and liked” Ms Ashton. He describe her as a “street fighter” with a disciplined mind for bureaucratic battles, competent and intelligent, but says she has “no foreign affairs knowledge.”

Julian Assange

LINK 4. Brussels

This is even more entertaining than the British tabloids. Thank you, Mr. Assange!

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h/t: EUobserver.com

About the links:

Since I’m not sure how long the cables will be online, I’ve made transcripts of the text files and uploaded them a few other places.

At the moment, you’ll find them here:

Link 1. Oslo Cable

Link 2. Stockholm Cable

Link 3. Russian Cable

Link 5. Brussels Cable

Read other EU files here.

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Saxo Predicts Public Debt Catastrophe, Insolvent Banks

In Financial Engeneering, Financial Markets, Health and Environment, International Econnomic Politics, Law & Regulations, National Economic Politics, Quantitative Finance, Technology, Trading software, Views, commentaries and opinions on 07.01.11 at 03:43

Yes, it’s that time of the year again; Saxo Bank is out with their “Outrageous Predictions” for the coming year, and they are more contagious than ever. Here’s how the Danish analysts describe an unlikely, but possible, scenario for the United States in the second half of 2011:

“Politicians and pundits increasingly succeed in putting the Fed in the hot seat for having been the critical enabler of the US housing debacle and resulting bank bailout and public debt catastrophe. Meanwhile, the too-big-to-fail banks are back in deep trouble again as their troubled mortgage portfolios once again threaten their solvency.”

Saxo Bank


I doesn’t sound too unlikely to me, and if I were to bet, I would put my money on this one; Saxo Bank goes on predicting a Ron Paul led challenge of the Federal Reserve‟s authority, the US Congress blocking the FED‟s authority to expand its balance sheet and sets up an eventual challenge of the FED‟s dual employment/inflation mandate. On the other hand, it’s probably only wishful thinking…

It’s about to become one of Scandinavia’s finest New Years traditions; the “Outrageous Predictions” by Saxo Bank.

Inspired by Nassim Taleb and his Black Swan Theory, they issue an annual report every year in December where the analysts, led by Mr. David Karsbøl, list 10 unlikely, but absolutely possible, economic and political scenarios for the year to come.

The track record so far is relatively good.

Saxo Bank have managed to get an average of four hits, on their ten outrageous predictions the last four, five years.

Last year, three of the predicted, highly unlikely, scenarios did in fact happen.

Personally, I think Mr. Nassim Taleb would object strongly against using the term “Black Swan” about these predictions.

But that aside, according to chief economist David Karsbøl at Saxo Bank, the analysis can be useful in stress testing your investment portfolio.

In other words, it is worth taking into consideration.

Okay, here it is:

“Saxo Bank – Outrageous Predictions 2011”

 

US CONGRESS BLOCKS BERNANKE’S QE3:
As we move into the second half of 2011, politicians and pundits increasingly succeed in putting the Fed in the hot seat for having been the critical enabler of the US housing debacle and resulting bank bailout and public debt catastrophe. Meanwhile, the too-big-to-fail banks are back in deep trouble again as their troubled mortgage portfolios once again threaten their solvency. The Fed‟s Bernanke rallies the FOMC to indicate a strong new expansion of monetary policy to once again bail out the troubled banks and/or local governments. Emboldened by the political and popular winds blowing, however, a Ron Paul led challenge of the Fed‟s authority sees the Congress blocking the Fed‟s authority to expand its balance sheet, and sets up an eventual challenge of the Fed‟s dual employment/inflation mandate.

 

APPLE BUYS FACEBOOK:
What do you do when you want domination of the electronic and mobile device consumer market and have no significant presence in social networking? Oh, and a war chest of a mere USD 51 billion? You buy Facebook, the mother lode of (yet to be monetised) social networks. Facebook is worth USD 43 billion, according to sharespost.com. In interviews, Apple CEO Steve Jobs has explained that Apple was in talks with Facebook about partnership opportunities, but that the talks ultimately produced nothing. Facebook was after “onerous terms that we could not agree to”, according to Jobs. At the Web 2.0 Summit Facebook founder Mark Zuckerberg called for Apple to ease its approach to connecting Ping with Facebook, and said that Apple had to “get on the bus”. Steve Jobs might get on the bus indeed and buy Facebook outright. It makes perfect sense; Facebook doesn‟t compete against Apple and it „faces up‟ to Google, which Jobs loves since Google has become his new number one enemy. It‟s a deal made in heaven… The gigantic 500+ million Facebook user base could be integrated across Apple‟s consumer products and services – every Facebook user automatically has an iTunes Store account and FaceTime chat is integrated into Facebook chat. That‟s a lot of iOS devices.

 

US DOLLAR INDEX TOPS 100:
The economic growth trajectory in most areas of the world appears healthy for a time in 2011 – at least outside of Europe and Japan. But then trouble occurs in China, where its new 12th five-year plan aimed at increasing consumption fails to function as hoped. With the Chinese industrial base growing more slowly or not at all as a result of the policy shift, the satellite countries dependent on Chinese demand see their economies facing a rough adjustment. This puts global risk appetite in a tail spin, and with the Japanese economy struggling and the Eurozone in disarray, the US dollar suddenly doesn‟t look as bad as it did previously. This is especially the case since the market was massively short of the currency at the beginning of the year. The unwinding of these positions pushes the USD index 25% higher to over 100 late in the third quarter of 2011. – Outrageous Predictions 2011 –

 

US 30-YEAR TREASURY YIELD SLIDES TO 3%:
The dollar devaluation policy, with its roots in the „currency wars‟ of 2010, force emerging markets to use more of their spare dollars on Treasuries. Also, the US edges over the brink toward a „Japanisation‟ of its economy with core inflation dropping. The Federal Reserve‟s quantitative easing did not have any positive effects, apart from easing the balance sheet woes of American banks. Main Street did not receive much except some benefits from slightly higher stock prices, and with a failure to clear out the system, borrowing returns only slowly and recovery does not gain traction. And then there‟s the Eurozone, where the ECB, EU and IMF fail to cure the ills of the peripheral PIIGS, pushing the flock of flustered investors to the safe haven of Uncle Sam. The feel-good factor may have been on the rise in the US in the latter part of 2010, but it vanishes in 2011 and the 30-year Treasury yield drops to 3%.

 

AUSSIE-STERLING DIVES 25%:
The UK returns to the values of the old days; they work harder, they save more, and soon enough a surprisingly strong expansion in 2011 is underway as the austerity-stricken country defies the naysayers. The markets have it in for the UK, giving the wide expectation that the economy slows as Prime Minister Cameron‟s cuts work their way through the system. However, the large, narrow cuts will not hinder consumer sentiment and as real savings boost production the economy bounces back in the second half of 2011 to end the year as a growth frontrunner in Europe. Australia, on the other hand, is struggling with a weakening economy
as China steps harder on the brakes to stop inflation from getting out of control. Add to this an Australian property market, which is at best in need of restraint and at worst looks like a bubble ready to burst, and we will see a decline of 25% in AUDGBP.

 

CRUDE OIL GUSHES BEFORE CORRECTING BY ONE THIRD:
Crude oil, now driven by fundamental investor macro expectations, gets carried away, surging to over USD 100 a barrel in early 2011 on the wave of euphoria that the US economy has broken free of the shackles.

Unlike 2008, there‟s no follow through to drive the spike higher and investors are left holding oil positions they cannot sustain.

Crude succumbs to a violent one-third correction lower later in the year.

 

NATURAL GAS SURGES 50 PERCENT:
Natural gas enters 2011 with a supply surplus as the global downturn has resulted in supply exceeding demand for two years – resulting in two years‟ of double digit losses. But heading into 2011 the fundamentals for Henry Hub improve dramatically. Increased industrial demand on a US recovery, historical cheapness relative to crude and coal, forward curve flattening and action on proposals to export more US natural gas reserves all combine to make passive investments in gas more profitable. And the icing – an unusually frigid cold snap leads to a rapid depletion of stocks. Henry Hub thus sees a one-in-25 year move up by 50% in 2011.

 

GOLD POWERS TO USD 1800 AS CURRENCY WARS ESCALATE:
The „currency wars‟ return with a vengeance in 2011, driven by improvement in the US economy rather than a need to help economic recovery.

The US trade deficit widens as consumers and governments get their wallets out. As the deficit expands, President Obama‟s plan to „double exports in five years‟ increasingly becomes a pipe dream and incites the „man on the street‟ to twist the US Congress‟s arm to pursue a weaker dollar.

Pressure piles on China and as investors flee to metals in search of some stability, gold shoots up to USD 1,800 an ounce.

 

S&P500 REACHES AN ALL-TIME HIGH
Dr. Bernanke, using his mandate of „make sure the stock market keeps going up‟, continues to pump liquidity into the system in 2011. Even „mom-and-pop‟ investors realise the only strategy worth following is to buy the dips. But the tactic actually works for the Fed, even though it‟s a house of cards, and the US consumers start to spend as their stock portfolios
improve and they forgive their money managers. Corporate America doesn‟t buy the euphoria that a healthy share price is a good indicator of health, though, and continues the deleveraging process – margin improvements, a wary approach to spending and managing the balance sheet, refinancing debt at next to zero interest rates, and so on. Next thing you know, it‟s a proper recovery and the US benchmark index sees the 2007 peak in the rear-view mirror on its way to 1,600.

 

RUSSIA’S RTS INDEX REACHES 2500
It‟s a perfect storm for Russia‟s RTS index in 2011. The next global economic bubble starts to inflate early in the year, sending crude oil above USD 100 a barrel again. The average US investor won‟t do anything with his money other than buy the dips on the US stock market, and fans of the Russian stock market realise value in their index at a 1-year forward P/E of 8.6 and price to book ratio of 1.26. The RTS nearly doubles to 2,500 in 2011. The options market says it has a one-in-twelve chance of happening – but the RTS was last up there in mid-2008.


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Who Killed The Blackbirds? The Aliens or Al Qaeda?

In Health and Environment, International Econnomic Politics, Learning, Natural science, Philosophy, Technology, Views, commentaries and opinions on 06.01.11 at 19:17

Over the last weeks, there have been reports from. at least, three different parts of the world about hundreds and thousands of dead black birds falling from the sky. In the US authorities blame it on the fireworks, in Australia its said to be some kind of poison and in Sweden a truck drivers has admitted to rolling over a flock of birds sitting in the middle of the road in the middle of the night. The preliminary findings shows that the birds have internal damage. However, the truth is still out there, and other explanations are far more entertaining.

“I asked these guys who are out here picking them up and they don’t seem to know anything, nobody seems to know anything. It just kind of freaked everybody out.”

US Citizen of Arkansas


The reports on birds dropping dead from the sky is not the only strange phenomena observed in Arkansas recently:  Last Thursday, a day before New Years Eve and the dead-bird-rain, a tug boat operator on a 20-mile stretch of the Arkansas River discovered  over 100.000 dead drum fish, washed up on the river banks.
 

The drum fish were discovered near Ozark by a tug boat operator on Thursday – a day before thousands of blackbirds fell from the sky only 125 miles away – in Little Rock, the UK Daily Mail reports.

David Price, who spotted the fish from his parents’ Roseville house, located on the banks of the river, pointed and says: “Over from down here at the bottom of the rocks, out maybe 40 or 50 feet, there were just thousands of fish along the shore-banks all the way around the river here.”

‘This is kind of amazing because the fish were about a pound and a half a piece,’ Price says.

Travis Harmon of the Department of Environmental Quality says: ‘Barges reported passing up river and churning up dead fish from the bottom of the river. A single species is killed, and we don’t know the cause. If it was toxic, other species would be affected.”

Toxic, What Toxic?

Fisheries officials collected some of the dying animals near Roseville to conduct tests.

People have been warned about eating the fish.

Keith Stephens of the Arkansas Game and Fish Commission says that a mass fish kill happens from time to time, but this case is particularly unusual.

“The fish kill only affected one species of fish,” he points out.

‘If it was from a pollutant, it would have affected all of the fish, not just drum fish.”

Ozark, where the fish was found  is about 125 miles west of the town of Beebe, where authorities still are trying to find out why about 5.000 red-winged blackbirds and starlings fell from the sky just before midnight New Year‘s Eve.

Biologists believe the bird deaths were stress-related from either fireworks or weather and are unrelated to the fish kill near Ozark, according to Mr Stephens.

Although the two incident occurred one after the other, Mr Stephens says he believe that they are unrelated.

At the moment biologists are investigating the possibility of a new type of bird flu.
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A Global Mystery

I can see why the scientists think its hard to say if the cases of dead birds and fish are related or not.
At the moment, the following stories are being reported by the news media:
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  • Thousands of fish found floating in Florida after cold snap
  • 200 birds found dead on highway bridge in Texas
  • 50 dead jackdaws found on city street in Sweden
  • 100 tons of sardines, croaker and catfish wash up dead on Brazilian coast
  • Hundreds of fish dead in New Zealand
  • In Britain, 40,000 devil crabs join list of casualties

 

click to enlarge

Internal Bleeding

More and more animals are being found dead as the mysterious spate of mass bird and fish deaths has turned into a global phenomenon.

The latest two separate incidents saw thousands of fish found floating in a creek in Florida and 200 birds found dead on a highway bridge in Texas.

Experts were yesterday carrying out tests on around 50 jackdaws found dead in a street in Falkoping, Sweden, that appear to have suffered the same fate as thousands of their cousins who fell from the sky in separate incidents in the US.

The Swedish newspaper “Expressen” reports today that the preliminary findings shows that the birds have internal damage. According to Swedish zoologist Marianne Elvander there is no sign of decreases or infections. 

A Swedish truck driver have admitted to the police that he probably drove through a huge flock of birds sitting in the middle of the road on Monday night.

“He ran over some of them, and did not think there was anything strange until he saw the enormous media attention the dead birds has received,” says Christer Olofsson with the Swedish rescue service to the newspaper Aftonbladet.
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Anyway – the case is still a mystery.
And of course the speculations are flying high on the internet right now.
Among the more exotic explanations is that the animal killing is caused by aliens from another planet, or that is another plot organized by Al Qaeda.
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However, regular readers of The Swapper/Econotwist’s will know that this is not the first case of strange phenomenons involving animals we’ve experienced over the last two years, at the same time the earthquake frequency have increased by 133% as more and more extreme weather are swiping over the planet’s surface.
According to the scientists and the official expert nothing is related…..
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Well, I want to know WFT is going on!
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