Monday, May 2, 2016

Zerohedge: Another "Conspiracy Theory" Confirmed: ECB Finds Widespread Trading On Leaked Inside Information

Another "Conspiracy Theory" Confirmed: ECB Finds Widespread Trading On Leaked Inside Information

Submitted by Tyler Durden on 05/02/2016 10:21 -0400

"information of many macroeconomic announcements
is known by some market participants in advance  
- European Central Bank

Remember when it was merely another conspiracy theory that "some" traders "trade" (with zero risk) with the benefit of leaked material non-public information? As of moments ago it is merely the latest conspiracy fact, confirmed by none other than the ECB, which earlier today published a research paper which finds substantial "informed" trading before the official release in seven of 21 market-moving U.S. macroeconomic announcements.

The paper has studied trading patterns from Jan. 2008 to March 2014 and finds that "prices begin to move in the ‘correct’ direction about 30 minutes before the release time. The pre-announcement price drift accounts on average for about half of the total price adjustment."

Translation: chronic insider trading, which until recently was an allegation that the serious outlets would relentless mock as another conspiracy by tinfoil hat fringe websites.

The paper also finds "strong evidence of pre-announcement drift" in ahead of releases such as the Conference Board's consumer confidence index; NAR existing home and pending home sales; preliminary GDP; Federal Reserve’s industrial production (yes, even Fed data has been leaked repeatedly); ISM manufacturing and non- manufacturing indexes, and countless other examples.

While the ECB does not blame the entire "drift" on leaks of insider information, saying instead that "the evidence suggests that the pre-announcement drift likely comes from a combination of information leakage and superior forecasting" it is clear what the real culprit is for outperformance ahead of major data release, and - spoiler alert - it isn't "superior forecasting."

Zerohedge: Deutsche Bank Has Systemic Money Laundering, Terrorist Financing And Sanctions Problems: UK Regulator

Deutsche Bank Has Systemic MoneyLaundering, Terrorist Financing And Sanctions Problems: UK Regulator

Submitted by Tyler Durden on 05/01/2016 20:01 -0400

Just two days after Deutsche Bank fired the head of its "integrity committee", Georg Thoma who had been originally tasked with clearing up the bank's past scandals, because according to DB's vice chairman Alfred Herling, Thoma had been "overzealous" and "goes too far when he demands ever wider investigations and more and more lawyers come marching up", today the UK financial watchdog agency FCA announced that Germany's biggest bank has "serious" and "systemic" failings in its controls against money laundering, terrorist financing and sanctions, the Financial Times reported.

The Financial Conduct Authority (FCA), has now ordered a separate independent review, the FT reported the letter as saying. The FCA declined to comment.

In other words instad of firing it "Chief Ethics Officer" (sic), Deutsche should have ideally hired a few more because as a result of this latest probe it is most likely looking at billions more in settlement charges over the next 6 - 12 months.

"Our overall conclusion was that Deutsche Bank UK had serious AML (anti-money laundering), terrorist financing and sanctions failings which were systemic in nature," the FCA letter, dated March 2, reportedly said.

"Effective senior management engagement and leadership on financial crime had been lacking for a considerable period of time." And where there is effective senior management, the board makes sure to get rid of said management, because if it actually followed the law how could this megabank ever make money in Europe's monetary twilight zone.

Zerohedge: British "Spies" Among Thousands Of names Exposed Following Massive Leak At Largest Mid-East Bank

British "Spies" Among Thousands Of names Exposed Following Massive Leak At Largest Mid-East Bank

Submitted by Tyler Durden on 05/01/2016 21:33 -0400

The Panama Papers leak was for appetizers. The real leak, one which took place quietly and under the radar a few days ago, and may have exposed far more wealthy and important individuals, was that of the Qatar National Bank - the Middle East's largest lender by assets - where a massive 1.5 GB data dump posted online last week exposed the personal data of thousands of clients.

According to IBT, the massive data dump appears to contain hundreds of thousands of records including customer transaction logs, personal identification numbers and credit card data. Additionally, dozens of separate folders consist of information on everything from Al Jazeera journalists to what appears to be the Al-Thani Qatar Royal Family and even contains a slew of records listed as Ministry of Defence, MI6 (the UK foreign intelligence service) and Qatar's State Security Bureau, also known as "Mukhabarat".

The bank told Reuters it had taken immediate steps to ensure customers would not suffer any financial loss after the security breach although it was not clear how the bank planned to protect accounts whose details, including customer names and passwords, have already been published.

"We are taking every measure to protect the privacy of our customers and have engaged an external third party expert to review all our systems to ensure no vulnerabilities exist," the bank said in a statement on Sunday. "All our customers’ accounts are secure."

Except, of course, all those thousands whose data is already in the public domain.

According to Reuters, the 1.5GB trove of leaked documents posted online included the bank details, telephone numbers and dates of birth of several journalists for satellite broadcaster Al-Jazeera, supposed members of the ruling al-Thani family and government and defense officials.

Zerohedge: Australian Entrepreneur Craig Wright Reveals Himself As Bitcoin Crator "Satoshi Nakamoto"

Australian Entrepreneur Craig Wright Reveals Himself As Bitcoin Crator "Satoshi Nakamoto"

May 2, 2016

In what may be the biggest "self-outing" in years, overnight Australian entrepreneur Craig Wright has publicly identified himself as Bitcoin creator Satoshi Nakamoto, revealing his identity to three media organizations - the BBC, the Economist and GQ. His admission ends years of speculation about who came up with the original ideas underlying the digital cash system.

As the BBC reports, Wright has provided technical proof to back up his claim using coins known to be owned by Bitcoin's creator. Prominent members of the Bitcoin community and its core development team have also confirmed Mr Wright's claim although speculation remains that this may be merely a publicity stunt.

At the meeting with the BBC, Wright digitally signed messages using cryptographic keys created during the early days of Bitcoin's development. The keys are inextricably linked to blocks of bitcoins known to have been created or "mined" by Satoshi Nakamoto. "These are the blocks used to send 10 bitcoins to Hal Finney in January [2009] as the first bitcoin transaction," Wright said during his demonstration.

Renowned cryptographer Hal Finney was one of the engineers who helped turn Mr Wright's ideas into the Bitcoin protocol, he said. "I was the main part of it, but other people helped me," he said. Wright said he planned to release information that would allow others to cryptographically verify that he is Satoshi Nakamoto.

Prominent members of the bitcoin community promptly validated his claim. Soon after Mr Wright went public, Gavin Andresen, chief scientist at the Bitcoin Foundation, published a blog backing his claim. "I believe Craig Steven Wright is the person who invented Bitcoin," he wrote.

Jon Matonis, an economist and one of the founding directors of the Bitcoin Foundation, said he was convinced that Wright was who he claimed to be. "During the London proof sessions, I had the opportunity to review the relevant data along three distinct lines: cryptographic, social, and technical," he said. "It is my firm belief that Craig Wright satisfies all three categories."

However, not everyone has been convinced by Mr Wright's claims and technical proofs. In its article about Mr Wright, The Economist said "important questions remain" about whether he was Satoshi Nakamoto. In addition, many people involved in bitcoin have taken to social media to express their doubts and have called for further proof.

Why Now?

By going public, Wright hopes to put an end to press speculation about the identity of Satoshi Nakamoto. The New Yorker, Fast Company, Newsweek and many other media organisations have all conducted long investigations seeking Bitcoin's creator and named many different people as candidates.

In December 2015, two magazines, Wired and Gizmodo, named Mr Wright as a candidate after receiving documents believed to be stolen from him that revealed his involvement with the project. Soon after these stories were published, authorities in Australia raided the home of Mr Wright. The Australian Taxation Office said the raid was linked to a long-running investigation into tax payments rather than Bitcoin. Questioned about this raid, Mr Wright said he was cooperating fully with the ATO.

"We have lawyers negotiating with them over how much I have to pay," he said.

The stories in December have led to many more journalists and others pursuing him and people he knows, he said. "There are lots of stories out there that have been made up and I don't like it hurting those people I care about," he said. "I don't want any of them to be impacted by this."

"I have not done this because it is what I wanted. It's not because of my choice," he said, adding that he had no plans to become the figurehead for bitcoins.

"I really do not want to be the public face of anything," he said, expressing regret that he had been forced to reveal his identity.

"I would rather not do it," he said. "I want to work, I want to keep doing what I want to do. I don't want money. I don't want fame. I don't want adoration. I just want to be left alone."

Bitcoins are now accepted as payment for a vast variety of goods and services - everything from international money transfers to ransoms for data encrypted by computer viruses. There are currently about 15.5 million bitcoins in circulation. Each one is worth about $444. Satoshi Nakamoto is believed to have amassed about one million Bitcoins which would give him a net worth, if all were converted to cash, of about $450 million.

Following the news, the price of bitcoin has seen some initial weakness although it appears to have made up some of the losses after falling as low as $439 in overnight trading.


Heavenletter #5637 Nothing Else and Nothing Less

Heavenletter #5637 Nothing Else and Nothing Less

May 1, 2016

God said:

Strictly speaking, even as there are no dimensions in Eternity and Infinity, and there is no time and space, none at all, and spoken and written language can only go so far, there is, nevertheless, always more to come.

There are greater heights to reach, and you do rise higher even as your feet are stuck to the ground or you are on your knees or the sun is too bright in your eyes. Heights are for you to reach, and depths as well.

How deep you are and how high. You are like the Hub of the Universe, or We can say the Navel of the Universe. The Center and the Heights and the Depths are One. It can be said that there is only Higher and Higher and nothing else and nothing less.

GIZMODO: Hackers Who Got Caught by a Typo Were Trying to Take Over the World

Hackers Who Got Caught by a Typo Were Trying to Take Over the World (Updated)

The hackers behind a large-scale Bangladesh bank hack went further than simply stealing money. Now it turns out that they created malware that could compromise the internationally used SWIFT payment system.

BAE Systems researchers tell Reuters that the hackers who took the central bank of Bangladesh for a ride compromized the SWIFT system using malware. SWIFT has confirmed to Reuters that it’s “aware of malware targeting its client software.” The organization plans to issue an update for its software some time today to protect the payment systems from attack.

The malware, called evtdiag.exe, allowed the hackers to change records on SWIFT databases in order to hide what they were up to. The criminals could delete records of transfer requests, intercept messages about payments and manipulate the displayed account balances to cover their tracks.

The software was apparently specifically written to attack the Bangladesh bank, but the theory could, according to the researchers, be applied elsewhere. Adrian Nish from BAE Systems told Reuters that it was one of the most elaborate malware hacks he’d ever come across.

An $80M Bank Hack Has Been Blamed on $10 Routers

Sometimes it pays to spend. The central bank of Bangladesh has found that out the hard way, as police are blaming its loss of $80m during a hack on crappy $10 routers.

You might remember that a team of hackers tried to steal vast quantities from the bank earlier this year. Their attempts were brought to a halt because they managed to misspell “foundation” as “fandation”—a typo that was noticed by Deutsche Bank, ultimately bringing the heist to an abrupt end. The criminals did, however, manage to make off with $80 million before they were found out.

Now, Reuters reports that the Forensic Training Institute of the Bangladesh police’s criminal investigation department has carried out an investigation into what went wrong. The team found that the bank was using second-hand $10 network switches without a firewall to link its computers. Perhaps no surprise, then, that it proved incredibly easy to hack. Sadly those computers were connected to the SWIFT global payment system, which meant the hackers were able to gain access to the credentials required to make high-value transfers straight into their own accounts.
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