Tag Archives: Federal Reserve

US Federal Reserve: Hacked, Tapped and Smacked

Last Sunday’s cyber attack on US Federal Reserve Bank of St.Louis appears to be a lot more serious than the St.Louis FED have told the media, the authorities  and  financial institutions they serve. According to ZDNet the hacktivist group Anonymous may have released important banking information that could be connected to Federal Reserve computers, including contact information and cell phone numbers for U.S. bank Presidents, Vice Presidents, COO’s Branch Managers, VP’s and more. The FBI has now opened a criminal investigation into  hacking incident.

“As an information security expert, its my official position that there was a blatant and irresponsible lack of tact and urgency in the response by the Federal Reserve to the individuals and institutions contained in this list. I’d go as far as to say they have irrevocably LIED to their constituents here.”

Security Expert

anonymous-fed-hack

According to the ZDNet report, the information security community is outraged at the Federal Reserve for its dismissive attitude and lack of transparency around Sunday’s emergency contact system hack. A Federal Reserve Spokesperson told reporters that Anonymous’ claim to the hack’s importance was “overstated,” but information security professionals that serve financial institutions says the exact opposite. Now they are angry with the Federal Reserve for downplaying the incident – very angry.

The hacktivist group Anonymous accessed  the US Federal Reserve Bank of St. Louis‘ internal files and servers, by hacking the FED’s  emergency contact system,  ZDNet reports.

anon 0The emergency contact system (ECS) enables agencies to establish two-way communications channels with institutions during a crisis to exchange critical information; crises such as natural or man-made disasters; weather, fire, and so on, chemical biological events or threats, and events affecting the financial markets

One of the people who express his concern with the hacking incident is Veracode chief technology officer, Chris Wysopal, calling the hack “a spearphishing bonanza and the most valuable account dump by quality I have seen in a while.”

anon 1Another person expressing concern on the incident is Jon Waldman, a senior information security consultant whose firm specializes in serving small-to-medium sized financial institutions, explain his anger at The FED’s downplaying of the incident.

Here are some quotes by the security excerpts:

“The Federal Reserve is simply incorrect by saying there’s not account details on the list. I’ve seen that list and it is absolutely rife with account details. Usernames and hashed passwords are included with salts.”

“As an information security expert, its my official position that there was a blatant and irresponsible lack of tact and urgency in the response by the Federal Reserve to the individuals and institutions contained in this list. I’d go as far as to say they have irrevocably LIED to their constituents here.”

Hacking for…….Chris Dorner!?

ZDNet points out that the Anonymous previously hacked other US government websites, including the U.S. Sentencing Commission and the Alabama Criminal Justice Information Center. The report also claim that Anonymous new attack’s filename refers to Christopher Dorner, an ex-LAPD officer that is currently the target of a California state-wide manhunt for killing three people, but has been characterized by some Anons as “an avatar” of the man of conscience pushed to the point of desperate action due to the alleged corruption happening within the LAPD.

anon 2However, the latest government hacking incident may also be attributed to a group of Anonymous’ demand for a US computer crime reform law, as well as the group’s extended show-off in protest for the early demise of Reddit’s co-founder Aaron Swartz, a famous hacktivist who committed suicide during a rough investigation by the FBI into his activities.

I certainly hope that no one commits suicide as a result of this new FBI investigation, but I curious about the results. And also if the investigation will target the officials at St.Louis FED – or just the Anonymous…

Related by econoTwist’s:

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The Fight Against Currency War

G20 pledges to avoid weakening currencies to boost exports and to let markets increasingly set foreign exchange values, after the weekend summit. The risk of a of currency war seems to have abated somewhat, and the USD is now at a 15-year low.

“The terms on currency policy are relatively vague and may be interpreted differently by each country. It remains to be seen whether actual practises will be changed.”

Camilla Viland


As expected, currencies were discussed at the G20 meeting over the weekend. The finance ministers of the group now pledges to avoid further weakening of currencies, to boost exports and to let markets increasingly set foreign exchange values. This could be interesting…

First of all; there was no decision on the US proposal for current account targets, and this debate will be continued at next months G20 meeting in Seoul.

And second; the terms on currency policy are relatively vague and may be interpreted differently by each country. It remains to be seen whether actual practises will be changed.

“However, it is very positive that they have come up with a joint statement on currencies,” analyst Camilla Viland at DnB NOR Markets writes in Monday’s Morning Report.

Previously this has been avoided in fear of alienating China, she points out.

USD At 15-Year Low

The USD weakened after the G20 meeting, as the risk of tensions in the currency market has abated, according to DnB NOR Markets.

Camilla Viland

“The dollar has, among others, weakened versus Asian currencies on the prospect nations in the region will refrain from intervening in foreign exchange markets,” Ms. Viland  writes.

Expectations of the Federal Reserve announcing another round of quantitative easing next week also helps in bringing the dollar down.

Another currency which has weakened over the weekend is the Swiss franc.

“The currency is normally seen as a safe haven in the currency market and the weakening may be a result of lower risk of a currency war,” the Norwegian analyst says.

 

Biggest Strauss Kahn Statement – Ever?

Dominique Strauss Kahn

The G20 financial leaders also decided that Europe will surrender two seats in the IMF’s executive board to emerging nations, like China, India and Brazil with the intent to give these countries more power.

IMF-chief Dominique Strauss Kahn said that this was the “biggest IMF reform ever.”

Yeah, right!

Mr. Strauss Kahn is about to get a reputation for distributing pompous – and not very well founded – statements.

See also: In The Brigh Minds Of IMF

 

German Economy Still Flying

The German IFO index rose from 106.8 in September to 107.6 in October.

German Economy Recover

This is the highest outcome since May 2007, and better than consensus’ estimate of 106.5 and the outcome signals solid growth for the locomotive of European economy.

However, it is worth noting that this month’s improvement was not only due to better current conditions, but also due to a rise in business expectations.

“The latest developments in the German economy have been positive. However, we do not expect this to last. Due to sluggish international growth and a strong euro, growth will abate going forward. Fiscal tightening will also weigh on German growth,” Camilla Viland at DnB NOR Markets writes.

And Now; The US Housing Market

From the US, figures for existing home sales in September will be released Monday.

The Pending home sales index, which is an indicator for actual home sales, has risen over the last two months.

Mr. Housing Market

And we may see a rise in existing home sales this month, too. (Consensus expects 4.3 million houses to have been sold in September, up from 4.1 million sales in August.)

“Such an outcome is positive. Nevertheless, the levels of monthly house sales are very low seen in a historical context,” Camilla Viland notes.

And yet to come; the impact of the foreclosure scandal…

Scandic Updates

Here in Scandinavia several important events are on the agenda this week.

In the Norwegian, Norges Bank‘s interest rate meeting and the release of a new monetary policy report, will probably get most attention.

“Both we and consensus expect the interest rate to be left on hold at this meeting,” Ms. Viland writes.

In fact, a survey by the financial news agency, TDN Finans, shows that out of 17 participating analysts, no one expects the Norwegian Central Bank to rise its key rate.

(But wouldn’t it be fun if governor Svein Gjedrem pulled one last stunt before he retires in December?)

Anyway – the central banks new interest rate path (a prediction of the key rate level going forward) will probably be the most interesting thing for Mr. Gjedrem & Co.

The interest path rate has been lowered a few times already this year, and the interest rate is currently set to be raised around New Year.

“Given the latest developments we do not see this as likely. Foreign swap rates have fallen markedly since the previous report was released in June and inflation has been lower than anticipated. This indicates that the interest rate path will be lowered,” DnB NOR Markets says.

Adding: “We expect that the new interest rate path will indicate that the next rate hike will not be until March or May 2011.”

Also the Swedish Riksbank meets this week, holding their monetary policy meeting on Tuesday.

“The Swedish economy has performed strongly lately and this is one reason why the Riksbank has raises rates by 50 bps since the bottom. The Riksbank has signalled that more is to come and both we and consensus expect them to raise the interest rate by 25 basis points, to 1.00%, at tomorrows meeting,” the Norwegian money market specialist says.

More from DnB NOR Markets:

OSE Share recommendations. 25 – 29 October 2010.

Weekly FX Update.

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Betting On The FED

European credit indices comfortably outperformed their equity counterparts, Monday, in a session where volumes were diminished by the Columbus Day holiday in the US. Spreads continued to feel downward pressure amid expectations that the next stage of quantitative easing is close to a formality, according to Markit Financial Information.

“The Greek bailout was unpopular with the prudent German public, and Chancellor Angela Merkel would probably be wary of granting Greece any more leeway.”

Gavan Nolan

“An unsatisfactory outcome from the weekend IMF meeting had little impact on spreads. China categorically rejected criticisms of its exchange rate policy, instead highlighting the loose monetary policy of the US. But the prospect of a currency war and beggar-thy-neighbour policies has less resonance with investors than the FED’s liquidity pump, though this may well change if the rhetoric becomes more aggressive.” vice president Gavan Nolan at Markit Credit Research writes in his daily alert.

A weaker than forecast non-farm payrolls report on Friday – not normally a catalyst for spread tightening – only served to firm up the consensus that the Federal Reserve will further expand its balance sheet before the end of the year.

The IMF was also at the centre of the main notable movement today.

Dominique Strauss-Kahn, the IMF managing director, says that the agency might be willing to extend its bailout loans to Greece beyond 2013.

Germany quickly issued a statement that made it quite clear that they would be unhappy with such an extension.

“The Greek bailout was unpopular with the prudent German public, and Chancellor Angela Merkel would probably be wary of granting Greece any more leeway,” Nolan notes.

Nonetheless, the news caused Greece’s spreads to tighten significantly and the sovereign market performed strongly throughout most of the day.

  • Markit iTraxxEurope 97.75bp (-4), Markit iTraxx Crossover 454bp (-15)
  • Markit iTraxx SovX Western Europe 141.5bp (-4.5)
  • Markit iTraxx Senior Financials 119bp (-4.5)
  • • Sovereigns – Greece 695bp (-25), Spain 208bp (-9), Portugal 383bp (-13), Italy 177bp (-7), Ireland 425bp (-5), Belgium 123bp (-1)
  • BP 141bp (-1)

TRADING HIGHLIGHTS:

Name Sector Volume Turnover €
NYSE EURONEXT Financials 134,000 2,767,803
STHREE Industrials 306,519 1,082,256
LONDON MINING PLC Basic Materials 160,995 600,862
MUNTERS Industrials 72,709 594,258
NOVAE GROUP Financials 109,369 434,557
REPOWER SYSTEMS Industrials 3,009 352,655
TOM TAILOR HOLDING Consumer Goods 24,350 339,454
CARL ZEISS MEDITEC Health Care 26,852 327,594
JUMBO Consumer Goods 60,000 318,000
A.G. BARR Consumer Goods 20,377 278,735

Top 10 ETF

Name Volume Turnover €
DJ STOXX 600 OPTIMISED BANKS SOURCE ETF 1,484,920 105,929,455
DJ STOXX 600 OPTIMISED BASIC RESOURCES SOURCE ETF 128,244 41,939,958
LYXOR INTL ASSET MANAGEMENT ETF EUR MTS7-10Y EUR NPV 209,089 25,894,724
DB X-TRACKERS – DJ STOXX 600 BASIC RESOURCES ETF 236,205 21,739,561
DB X TRACKERS – DJ EURO STOXX 50 ETF 683,510 19,329,663
DB X TRACKERS – MSCI EMERGING MARKET TRN INDEX ETF 621,630 18,367,500
DJ STOXX 600 OPTIMISED INDUSTRIAL GOODS & SERVICES SOURCE ETF 151,966 16,723,243
DB X-TRACKERS ETF DJES50 1C EUR NPV 500,000 14,965,000
DB X-TRACKERS II ITRAXX CROSSOVER 5-YR TOTAL RETURN INDEX ETF 104,567 12,241,136
DJ STOXX 600 OPTIMISED CONSTRUCTION & MATERIALS SOURCE ETF 62,001 9,855,144

Top 10 Trades

Name Sector Volume Turnover €
BBVA Financials 30,000,000 298,198,786
BANCO SANTANDER Financials 10,000,000 94,300,003
GECINA Financials 1,000,000 86,000,000
BAYER Basic Materials 627,772 33,410,027
UMICORE Basic Materials 1,000,000 33,410,000
BANCO POPULAR ESPANOL Financials 6,500,000 30,225,001
SNAM RETE GAS Oil & Gas 5,461,000 20,383,183
DEUTSCHE TELEKOM Telecoms 2,000,000 19,827,999
DEUTSCHE POST Industrials 1,500,000 19,755,000
NOKIA Technology 2,500,000 19,400,001

Major Movers

Name Sector Volume Volume (T-1) % Change
BBVA Financials 70,895,504 4,217,845 1581%
BANCO POPULAR ESPANOL Financials 13,864,888 1,397,678 892%
INFINEON TECHNOLOGY Technology 8,062,722 1,363,419 491%
TELECOM ITALIA Telecoms 22,312,682 7,974,433 180%
HIKMA PHARMACEUTICALS Health Care 3,769,365 1,350,926 179%
DEUTSCHE TELEKOM Telecoms 9,896,973 4,574,373 116%
DEUTSCHE POST Industrials 5,059,129 2,665,023 90%
BT Telecoms 6,625,224 3,844,888 72%
ITV Consumer Services 14,370,746 9,156,002 57%
SNAM RETE GAS Oil & Gas 31,393,314 21,017,338 49%

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