Month: May 2014

It has been nearly two months since Malaysian Airlines flight MH370 disappeared without a trace on March 8. Since then, despite the endless coverage of CNN, there has been absolutely no progress in uncovering any clues about the fate of the missing Boeing 777. Perhaps the following may provide some clarity on why.

On Thursday, for the first time, 7 minutes of audio recordings of the final conversations between pilots of the missing Malaysian jet and teams of air traffic controllers on the ground were released.

The recording is provided below.

There is one problem: the recordings were “edited” leading many to wonder if the entire conversation wasn’t fabricated on a sound stage, and if so: why? And just what is the Malaysian government (either alone or in conjunction with other countries) hiding.

NBC has more:

Analysts who listened to the recordings for NBC News did not know why they were edited, but discovered at least four clear breaks in the audio that indicated edits.

 

“It’s very strange,” said audio-video forensic expert and registered investigator Ed Primeau of Primeau Forensics, who has analyzed hundreds of audio recordings. He said the beginning and end of the recording are high-quality with a low noise floor, meaning ambient background noise is almost silent, unlike the middle.

 

“At approximately 1:14 (a minute, 14 seconds into the audio, which can be heard here), the tone of the recording change to where to me, it sounds like someone is holding a digital recorder up to a speaker, so it’s a microphone-to-speaker transfer of that information. That’s a pretty big deal because it raises the first red flag about there possibly being some editing,” he said.

 

The next part that raises questions is two minutes, six seconds in, through two minutes, nine seconds in, he said.

 

“I can hear noise in the room, along with the increase in the noise floor. I can hear a file door being closed, I can hear some papers being shuffled. so I’m further convinced that, beginning at 1:14 continuing through 2:06 to 2:15, it’s a digital recorder being held up to a speaker.”

 

Long gaps in the communication throughout the recording also imply some editing, he said.

 

“But yet, at 6:17, there’s a huge edit because the conversation is cut off. It’s interrupted. And the tone changes again,” he said. “The noise floor, when you’re authenticating a recording from a forensic perspective, is a very important part of the process. All of a sudden, we go back to the same quality and extremely low noise floor that we had at the beginning of the recording.”

 

Kent Gibson, a forensic audio examiner with Forensic Audio in Los Angeles, added that there appear to be additional edits at 2:11 and 5:08, and agreed it sounded as though the middle section was recorded with a microphone near a speaker.

 

“You can hear, at 4:07, pages turning or a person breathing, which is unusual,” he said.

 

While it’s not uncommon for the background of a recording to change when a cockpit communication turns over from ground control to air controllers — which happened about four minutes into this recording — that doesn’t explain the noises that are heard.

 

“It’s not unusual that there would be clicks when they push the button on the microphone, but it’s very unusual to have a disturbance. Normally you wouldn’t have any background,” Gibson said.

 

A cut-off word also isn’t out of the realm of possibility, he said.

 

“It wouldn’t be unthinkable to have a truncated word because if somebody let go of the trigger on the microphone, it might cut off their word,” he said. “But it would be very unusual to find a background differential at the same time, suggesting that Malaysian authorities or whoever presented this made edits for whatever reason.”

So why did the authorities fabricate the recording? Simple: the pilot said something the government did not want leaked:

Gibson said it’s possible the tapes could have been edited by Malaysian authorities “if the pilot dropped a hint that they didn’t want to get out, if he said something that doesn’t fit with the Malaysian government’s party line.”

 

But, he said, “It’s more likely to be an inadvertent thing. But it’s not the way to handle evidence.”

 

The recording also could have come from different sources, he added.

 

“You can assume that the recording while they’re still on the ground came from the tower and then you could assume that the communication with air controllers was while they’re in the air,” he said. “They may have just mishandled the cobbling of it together.”

 

This doesn’t necessarily prove anything about the investigation, he added. “Unfortunately, there are no smoking guns, except there are edits. And there are clear edits,” he said.

So no smoking guns, except… there are smoking guns. “There’s things that have to do with timelines and radar that they have available, but they don’t make them available,” said Tom Owen, a consultant for Owen Forensic Services audio analysis and chairman emeritus of the American Board of Recorded Evidence. “They wouldn’t give you anything that would be enlightening for the public to any secretive information. I don’t see that as a problematic issue.”

Considering several hundred people are missing, presumed dead, purposefully covering up critical clues as to what happened is certainly a problematic issue, even if thanks to the government’s botched up handling of the situation, it does impart a significant dose of morbid humor to the following advertisement from Malaysian Airlines.

 

Finally, for all those who have been inquiring and trying to get to the bottom of this mystery, here is the official cargo manifest of flight MH370 – no doubt “edited” as well.

h/t Ro

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Submitted by Mike Krieger of Liberty Blitzkrieg blog,

It appears the status quo may be finally making its moves to getting control over the heretofore free and open internet. As I and many others have noted previously, the internet is one of the most powerful tools humanity has ever devised. It frees information in a way that was simply unimaginable decades ago and empowers each of us to be as informed or uninformed as we desire.

Just last week in my post, Say Goodbye to “Net Neutrality” – New FCC Proposal Will Permit Discrimination of Web Content, I mused that in so-called “first world” countries like the U.S. the illusion of freedom must be maintained even as civil liberties are eroded. Thus censorship must be administered surreptitiously and slowly. The following plan to implement an “Internet ID” will initially only be rolled out as a pilot program in two states (Michigan and Pennsylvania), and will only deal with government services. That said, we can see where all of this is ultimately headed, and the program, called the National Strategy for Trusted Identities in Cyberspace, should be monitored closely going forward.

Vice reported on this a few days ago:

A few years back, the White House had a brilliant idea: Why not create a single, secure online ID that Americans could use to verify their identity across multiple websites, starting with local government services. The New York Times described it at the time as a “driver’s license for the internet.”

 

Sound convenient? It is. Sound scary? It is.

 

The vision is to use a system that works similarly to how we conduct the most sensitive forms of online transactions, like applying for a mortgage. It will utilize two-step authentication, say, some combination of an encrypted chip in your phone, a biometric ID, and question about the name of your first cat.

 

But instead of going through a different combination of steps for each agency website, the same process and ID token would work across all government services: from food stamps and welfare to registering for a fishing license.

 

The original proposal was quick to point out that this isn’t a federally mandated national ID. But if successful, it could pave the way for an interoperable authentication protocol that works for any website, from your Facebook account to your health insurance company.

 

To start, there’s the privacy issue. Unsurprisingly, the Electronic Frontier Foundation immediately pointed out the red flags, arguing that the right to anonymous speech in the digital realm is protected under the First Amendment. It called the program “radical,” “concerning,” and pointed out that the plan “makes scant mention of the unprecedented threat such a scheme would pose to privacy and free speech online.”

 

And the keepers of the identity credentials wouldn’t be the government itself, but a third party organization. When the program was introduced in 2011, banks, technology companies or cellphone service providers were suggested for the role, so theoretically Google or Verizon could have access to a comprehensive profile of who you are that’s shared with every site you visit, as mandated by the government.

 

Then there’s the problem of putting all your security eggs in one vulnerable basket. If a hacker gets their hands on your cyber ID, they have the keys to everything.

 

For now, this is all just speculation. The program is just entering a test phase with select state government agencies only (there are currently plans to expand the trial out to 10 more organizations.)

 

But it’s not far-fetched to think we’re moving toward a standardized way to prove our identity in cyberspace the same way we do offline.

Keep a close eye on this.

Full article here.

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The major currencies continue to trade in fairly narrow ranges. The persistence of lackluster activity renders our trend identification, momentum, and positioning tools less useful.

 

The ECB meeting in the week ahead may be a window of opportunity for more activity. Yet, neither the threat of asset purchases and/or a negative deposit rate nor heightened tensions over Ukraine, or a re-acceleration of the US economy have seemingly provided new trading incentives.

 

Most participants expect the ECB to move in June, but standing pat this week may not be a non-event. Getting past the residual event risk may be important. The event risk includes comments from Draghi, who despite the critics who claim action is necessary, continues to do a fairly good job staying true to the spirit of the G20 “best practices” regarding the foreign exchange market, and checking the euro’s advance. He has not succeeded in pushing it down as remove, or at least greatly reduce, the upside momentum.

 

Over the last three weeks, the euro has been confined to a $1.3775-$1.3890 range. With a couple minor and brief exceptions the dollar has traded on the JPY102-handle for seven weeks. For the last three week, the Dollar Index has traded between 79.55 and 80.00. The narrow price ranges are both the cause and effect of the lack of participation, which is reflected in the minor position adjustments in the currency futures and what appears to be lower volumes in the spot market.

More light will be shed when several central banks report their estimate of foreign exchange turnover covering this period, later in the year.

 

Given the narrow ranges and recognition that our technical tools are less effective in such market conditions, we offer this week, only a brief overview of how we see the price action.

 

Euro: We are more inclined to see an upside than a downside break. There seems to be a reasonable risk of the euro moving above $1.3900, but whether it can break $1.40 now is a different matter. The importance of the $1.37775 area support appears to be growing.

 

Yen: Buying the dollar against the yen now seems to be a bet, if you will on two things. First, that the downside reversal in US equities seen before the weekend is not the start of a significant pullback. Second, that the US Treasury yields and the premium over Japan are near a bottoming. The US premium dipped below 200 bp last week for the first time since early February, when it was a bit of a one-day fluke. Last week premium stayed below that threshold for two consecutive days, the first time since last October. Japanese markets are closed early in the new week.

 

Sterling: New four year highs were recorded last week, but the move does not appear to be complete. The strength of the UK economy, and this quarter it will likely surpass its pre-crisis peak is helping to widen interest rate differentials in sterling’s favor. We look for bulls to continue to absorb the offers ahead of $1.70 and eventually drive sterling through there. The referendum in Scotland poses some political risk (that can have serious economic repercussions) but that is not a near-term consideration. The May 25 EU parliamentary elections may be more important, especially if the UKIP turns in a strong performance, perhaps aided by the European Court of Justice decision not to stop the plans for some members to implement a financial transaction tax. The $1.6780-$1.6800 area is forming an important area. It probably requires a break of $1.6760 to suggest a break out.

 

Dollar-Bloc: The US dollar is supported around CAD1.0940. The upper end of the range, which we favor a test on, is seen in the CAD1.1050-70 area. On a more medium term perspective, we still look for weakness in the Canadian dollar. The Australian dollar staged an impressive recovery before the weekend after testing the $0.9200 area support. A move now above $0.9315-25 would suggest that 1) the pullback from $0.9460 in early April was a correction and 2) that another run toward $0.9500, the measuring objective of an old head and shoulders bottom pattern.

 

Mexican Peso: The dollar closed lower against the peso every day last week, slipping to its lowest level in almost a month. However, the price action did not persuade us that the a breakout is at hand. The dollar’s resilience and ability to hold the low from early April near MXN12.94 and resurface above MXN13.00 suggests some additional upside in the days ahead.

 

 

Observations on speculative positioning in the CME currency futures:  

 

1. For the second consecutive reporting period, the week to April 29, saw minor position adjustments.  The largest gross position adjustment was short Australian dollar position that rose 6.1k contracts to 39.3k.  Second place went to the 3.8k contract decline in gross long sterling positions, bringing them down to 85.9k contracts.  That is the second largest gross long currency futures position, behind the euro’s 102.3k contracts.  

 

2.  It was the fourth reporting period that the net euro position has been largely flat.  The net position in the Swiss franc has been essentially flat for six weeks. 

 

3.  The net short yen position increase to 70.4k contracts from 67.2k.  It is the first increase in four weeks.  It was more a function of gross longs being reduced (2.7k contracts to 13.8k) than new shorts (400 contracts to 84.2k).   

 

4.  The decline in the next long Australian dollar position from 16.4k to 10.7k contracts in the latest reporting period break a seven week streak in which the net shorts were cut or net longs grew.   The gross long Aussie positions were not cut.  Instead they rose by a slight 500 contracts to 50.0k.

 

5.  The net short Canadian dollar position slipped to 30.3k from 35.4k contracts.  This is the smallest net short position since last November. 

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While there may be some confusion about why massive bond buying greeted yesterday’s “better than expected” loss of 209 jobs in the 25-54 age group, dragging stocks down, the answer is actually very simple: there is a war in the Ukraine.

A war which just took a turn for the worst after at least 42 people were killed according to Reuters in street battles between supporters and opponents of Russia in southern Ukraine that ended with dozens of pro-Russian protesters incinerated in a burning building. The riot in the Black Sea port of Odessa, ending in a deadly blaze in a besieged trade union building, was by far the worst incident in Ukraine since a February uprising that ended with a pro-Russian president fleeing the country.

The clip below, not for the faint of heart, shows anti-government protesters jumping from the burning Odessa trade unions house: it appears when Yanukovich was “killing” protesters in February, the west couldn’t get up in arms fast enough screaming for the former president’s overthrow. But now that the acting post-CIA funded coup government is doing the same thing to its own protesters, the radio silence is stunning.

But while yesterday’s tragic events in Odessa were the first time the Ukraine conflict manifested itself in pro and anti-Russian clashes in the Black Sea town, it will hardly be the last: not only does the port city have economic and military significance, it also sits between Crimea and pro-Russian areas in eastern Ukraine and the breakaway Transnistria region of neighboring Moldova.

The admission of the true state of affairs finally came from Kiev itself which said that Ukrainian forces pressed their assault on separatists today, freeing up a regional airport as the head of the country’s anti-terrorist center warned eastern regions are “essentially” at war.

The campaign in the Donetsk region left five dead from the Ukrainian anti-terrorist operation and 12 wounded, said the center’s chief, Vasyl Krutov, at a Kiev briefing, even as military observers were freed by anti-Kiev militants. Government forces have secured the town of Slovyansk as operations in Kramatorsk continue.

“What is happening in the east is not a short-term action, this is essentially a war,” Krutov said today.

War it is:

Open clashes are sweeping Ukraine’s east, from Donetsk near the Russian border to Odessa, about 100 miles from the European Union’s southeastern frontier in Romania, amid signs the industrial and coastal regions are slipping out of the Kiev government’s control. The U.S. and the European Union accuse Russia of being behind the unrest, while Russian President Vladimir Putin is “extremely concerned” and is studying the situation, his spokesman Dmitry Peskov, said today.

There was some good news: military observers from the Organization for Security and Cooperation in Europe who were taken hostage a week ago were freed and will be delivered to the Council of Europe in Slovyansk near Donetsk, the council said today in a statement.

Bloomberg reports further that the U.S. and EU accuse Russia of stirring unrest to undermine Ukraine’s May 25 presidential election. Polish Prime Minister Donald Tusk said at a briefing today in Jezioro, Poland, that officials are “losing hope” about a diplomatic solution to end the crisis.

“This is a war of maybe a different kind, it is a war that’s undeclared,” Tusk was quoted as saying by PAP newswire at a media briefing. “But what we’re really dealing with is de-facto a war. You can clearly see that actions taken by the international community haven’t brought results.”

To be sure, Ukraine and NATO is putting all the blame on Russia – not only for instigating the conflict but arming the separatists, seemingly oblivious of factual evidence that it was the US that was doing precisely the same just over three months ago when it was orchestarting the overthrow of the then government.

Ukraine’s Defense Ministry said the use of advanced weapons showed the separatists were “professional saboteur groups” rather than peaceful protesters. In a statement, it called their tactics “characteristic of foreign military or mercenaries.”

 

Turmoil erupted yesterday in Odessa, where more than 130 people had been detained by police, with 10 criminal cases already started, according to Petro Lutsyuk, the head of the Interior Ministry’s directorate in the city, said on the agency’s website. The Interior Ministry later said on its website that Lutsyuk was fired.

 

The nearby city of Nikolaev hosts much of the country’s defense and shipbuilding industry, as well as Zorya-Mashproekt, a state enterprise that manufactures gas turbines for OAO Gazprom (GAZP), the Russian natural gas producer and exporter.

Meanwhile, the theater by western leaders hit a new peak yesterday when Obama and Merkel did all they could: threaten more sanctions. At their news conference in Washington, Obama and Merkel said Russia must pull back support for the separatists so Ukraine’s May 25 presidential election can go ahead unimpeded. If the vote can’t be held, “we will not have a choice but to move forward” with more sanctions, Obama said. Merkel called the election “crucial” and said she’s ready to support economic sanctions if needed.

Ironically, it is German commercial interests which as we said back in March, are doing all they can to prevent sanctions of Russia as they know well they would be the biggest losers. Germany is Europe’s largest economy and had $127 billion in trade with Russia in 2013, according to the International Monetary Fund, making Germany is Russia’s second-biggest trading partner. Putin has threatened to escalate economic warfare if further sanctions are imposed.

“When we will reach a particular tipping point is very hard to say in advance,” Merkel said. “But all I can say is that the elections on May 25 are a decisive juncture for me and if there is further destabilization, things will get more and more difficult.”

Expect more furious bluster out of Germany and Obama, hoping that verbal escalation will finally cause Putin to pull back. It won’t. Meanwhile Putin is keeping quiet. Which is the second good news because as we showed yesterday, all Putin has to do is give the command.

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Submitted by Zachary Zeck via The Diplomat,

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