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SKY News: 60 Banks Robbed By Cyber Attack

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Great excuse to clamp down on the internet. Its also a good cover story for the recent problems banks have been reporting when then have denied customers access to their accounts.  Sky News has reported that up to 60 banks have been robbed via cyber attacks.

Sixty million euro has been stolen from bank accounts in a massive cyber bank raid after fraudsters raided dozens of financial institutions around the world.

According to a joint report by software security firm McAfee and Guardian Analytics, more than 60 firms have suffered from what it has called an “insider level of understanding”.

“The fraudsters’ objective in these attacks is to siphon large amounts from high balance accounts, hence the name chosen for this research – Operation High Roller,” the report said.

“If all of the attempted fraud campaigns were as successful as the Netherlands example we describe in this report, the total attempted fraud could be as high as 2bn euro (£1.6bn).”

The automated malicious software programme was discovered to use servers to process thousands of attempted thefts from both commercial firms and private individuals.

The stolen money was then sent to so-called mule accounts in caches of a few hundreds and 100,000 euro (£80,000) at a time.

Credit unions, large multinational banks and regional banks have all been attacked.

Sky News defence and security editor Sam Kiley said: “It does include British financial institutions and has jumped over to North America and South America.

“What they have done differently from routine attacks is that they have got into the bank servers and constructed software that is automated.

“It can get around some of the mechanisms that alert the banking system to abnormal activity.”

The details of the global fraud come just a day after the MI5 boss warned of the new cyber security threat to UK business.

McAfee researchers have been able to track the global fraud, which still continues, across countries and continents.

“They have identified 60 different servers, many of them in Russia, and they have identified one alone that has been used to steal 60m euro,” Kiley said.

“There are dozens of servers still grinding away at this fraud – in effect stealing money.”

Source: Sky News

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JP Morgan’s Trading Loss May Hit $9 Billion

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Back in may when the story broke of JPMorgan’s London Whale costing the company $3 billion in trading losses, there was great shock but asked the question could it be much higher. Today the figure looks to be getting closer to $9 billion. BusinessInsider reports as follows:

JPMorgan’s famous London Whale trading loss could spiral as high as $9 billion according to Jessica Silver-Greenberg and Susanne Craig at Dealbook.

This is a staggering amount, especially since in May people were freaking out at that might be as high as $3 billion.

…..

POLITICO’s Ben White notes astutely that it’s nice timing for JPMorgan to let this news leak on the day the SCOTUS healthcare announcement will be released.

The $9 billion number was actually scooped first by independent journalist Teri Buhl earlier this week.

Losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation.

..

The bank’s exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year.

As JPMorgan has moved rapidly to unwind the position — its most volatile assets in particular — internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report.

With much of the most volatile slice of the position sold, however, regulators are unsure how deep the reported losses will eventually be. Some expect that the red ink will not exceed $6 billion to $7 billion.

CNBC (Andrew Sorkin) is saying he reckons its more likely to be $4-5 billion. Lets wait and see.
There is always MaxKeiser’s view on what is happening.
As we’ve been saying for two years. JPM uses it’s own stock to collateralize naked silver short positions (echoes of Lehman and Enron). My analysis has concluded that liability from a rising silver price vs. loss of collateral value of the stock renders JPM’s balance sheet null and void when JPM’s stock price drops below the price of Silver. We’ve only seen this a couple of times since I made this call two years ago, BUT NEVER ON A SUSTAINED BASIS of more than a day or so. When the price of Silver popped over JPM’s stock price, the London desk quickly fabricated a few billion fresh naked silver shorts to tamp silver’s price down. Given this week’s revelations regarding JPM’s reckless balance sheet incineration the ‘crash jp morgan, buy silver’ trade has never been more important as a way to take down this financial terrorist. The SLA has been winning battles all along. Now we are poised to win the war as well. Bye-bye Jamie. NOTE TO HEDGE FUNDS: Sell JPM’s stock naked to Hell. This is the easiest money you’ll make this year.

 

Societe General in France Experience Technical Problems.

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On June  18th , Banque Postal in France closed its doors due to a technical problem now we hear after the problems in the UK and Ireland with RBS. Nat West and UlsterBank, that Societe Generale has announced today 28th June that it too is experiencing technical problems.

More and more signs that the banking system is extremely stressed.

 

Source: MaxKeiser

Chile Drops Dollar In Trade With China

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Another country joins the growing list of nations to drop the dollar for trading with another nation. In the case of Chile, it has done a deal with China to trade in the growing popular renminbi. Its another kick in the stones for the US dollars reserve status which is losing ground in world trade.

For simplicity’s sake here is the full list of “bilateral” arranagements in the past year as presented previously: “World’s Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade“, “China, Russia Drop Dollar In Bilateral Trade“, “China And Iran To Bypass Dollar, Plan Oil Barter System“, “India and Japan sign new $15bn currency swap agreement“, “Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says“, “India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees“, “The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap.”

And now the latest: “China, Chile To Establish Strategic Partnership, Boost Trade… Launch Currency Swap and Settle In Renminbi

 China and Chile agreed Tuesday to upgrade their bilateral ties to a strategic partnership, and double trade in three years.

 Chinese Premier Wen Jiabao and Chilean President Sebastian Pinera announced Tuesday the establishment of China-Chile strategic partnership and the completion of negotiations on investment-related supplementary deals to a bilateral free trade agreement.

 China would like to be actively engaged in Chile’s infrastructure construction and work with Chile to promote the development of transportation networks in Latin America, said Wen.

 Meanwhile, Wen suggested that the two sides launch currency swaps and expand settlement in China’s renminbi.

China appears to be getting all its ducks lined up before it makes it final move. The question is, how much of the renminbi will be gold backed?

So to summarize, the list of countries that China is transacting with directly (that we know of), and bypassing the USD entirely, is as follows:

  • Japan
  • Russia
  • Iran
  • India
  • Brazil
  • and now, Chile

In other words, it looks like the BRICs already have their “bilateral” arranagements all sorted out, and are now quietly moving into other suppliers of key resources with swap deals, all without any mention of the word “dollar.”

How soon until China re-dips its toe in Europe with a modest “bailout” nobody can refuse in exchange for a simple caveat: you get paid in renminbi?

Source: ZeroHedge

Fears For More “Technical Glitches” At Banks

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The debacle at RBS/NatWest/Ulster Bank rolls on as the IT systems have not been fully restored. Yesterday anecdotal stories painted a bleak picture by The Slog readers, and in particular business customers who have gotten the run around for months and were not surprised to hear of a “technical glitch”. In the Irish Independent there are further stories from the AIB and NIB who recently have experienced similar technical problems.

FRESH fears have emerged over the safety of bank computer systems after two more banks experienced technical breakdowns.

National Irish Bank and AIB both experienced worrying — if minor — system breakdowns in the past week. And the Central Bank revealed last night that it was now to demand details from all the retail banks on their contingency plans when their IT systems collapse.

….

National Irish Bank confirmed that it had a technical problem yesterday that prevented its customers accessing cash.

And AIB has admitted that a technical glitch meant its systems were down for a number of hours between Thursday night and Friday morning.

Both banks insisted the problems were minor and were quickly rectified. But IT security specialist Brian Honan, of BH Consulting, said a similar IT meltdown to the one at Ulster Bank was likely at other banks.

Then we get damage limitation, with the following:

It comes as experts warn that other banks are vulnerable to similar problems, which have left 150,000 Ulster Bank customers locked out of their bank accounts.

Pressure was increasing on the Central Bank to probe the systems and outline what supports are in place in AIB, Bank of Ireland, EBS, Permanent TSB and National Irish Bank to deal with major malfunctions. Questions were also continuing to mount for bosses at Ulster Bank over their handling of the crisis.

……

Banking and computer experts said last night that other banks were vulnerable to similar collapses.

….

Both banks insisted the problems were minor and were quickly rectified. But IT security specialist Brian Honan, of BH Consulting, said a similar IT meltdown to the one at Ulster Bank was likely at other banks.

 The official line is this could happen to any bank, but common sense tells you that IT systems are backed up at night and weekends so it could easily be rectified. Banks spend a lot of money to get their systems right and we never hear of some many “technical glitches” at the same time. The following line in the article was quite disturbing because it shows that the banks are under a lot of stress worldwide.

And professor of banking at the UCD Quinn School of Business, Eamonn Walsh, said major computer breakdowns had occurred in banks recently in Australia, Japan, Singapore and South Korea.

Source: The Slog, Irish Independent

George Soros: Euro T-Bills Solution

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 George Soros proposes his temporary solution for the euro, until the EU goes for a full fiscal and political union. Of course he uses the dramatic line that the EU has only 3 days before the sky falls in and the whole world will end or words to that affect. He also sees Greece must exit the euro, but then again we all knew that.

What you need is a European fiscal authority that will be composed of the finance ministers but would be in charge of the various rescue mechanisms, the European Stability Mechanism, and the one that preceded it and it would be empowered to issue treasury bills, to set up a debt reduction fund and actually buy up the excess stock of that that has accumulated in the hands of particularly Italy and Spain and finally combine issuing treasury bills. Those treasury bills would yield 1% or less and that would be the relief that those countries need in order to finance their debt.”

Click for full interview on Bloomberg.

Germany’s Plans For Future of EU

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German finance minister Wolfgang Schäuble gave an illuminating interview with Der Speigel on the future plans for the EU. He explains that the euro was a stepping stone to a political union along the lines of the USA, just simply waiting for the right crisis, which many economists said was always going to happen. 

The following are the main points from the interview:

    • Political union along the lines of the United States where each state has a number of representatives.
    • Directly elected President, but unelected Government (president gets to pick).
    • There is to be a full fiscal union with eurobonds. (Nation states giving up jurisdiction of Fiscal policy)
    • Finance Minister responsible for vetoing and approving member states budgets.
    • Bank Union with a European Supervisiory Authority over the banks.
    • A referendum will be needed to decide this.
    • Plans for the proposal to be presented at the EU summit this week.
    • It will happen very quickly, maybe in less the 6 months.

For the full interview check out on Der Speigel.

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