Tag: finance

ATMs Globally At Risk Of Hacking And Viruses From April 8 ~~~ 

Today’s AM fix was USD 1,327.00, EUR 962.64 and GBP 802.78 per ounce.                      

Yesterday’s AM fix was USD 1,346.00, EUR 967.16 and GBP 809.72 per ounce.     

Gold dropped $26.10 or 1.93% yesterday to $1,329.30/oz. Silver fell $0.25 or 1.2% to $20.57/oz.

Gold traded near the lowest in almost three weeks today as momentum traders and nervous longs pushed prices lower. Some participants interpreted the Fed’s policy statement as more hawkish than expected. Traders weighed the U.S. Federal Reserve’s indication that it may raise interest rates next year against the crisis over Ukraine.


Gold Bullion Coin and Bar Dispensing ATM

The short term trend and momentum is now down and gold is vulnerable to further falls. Gold had become overbought after its surge to 6 month highs and was due profit taking and a correction. Indeed, gold’s 6 month highs last week had led to a 14% gain so far in 2014 which if it had retained those gains, would have been gold’s best start to a year and the best first quarter for gold since 1985.

Gold is up 11% this year and reached a six-month high of $1,392.22 an ounce on March 17 as turmoil over Ukraine left Russia and the West embroiled in their worst confrontation since the Cold War. The abatement of unresolved tensions between Russia and the West has contributed to gold bullion’s pullback.

Gold fell yesterday after Yellen said that the Fed would cut its monthly bond buying by $10 billion and said they will slow purchases in “further measured steps.” However, Yellen also made very dovish sounds and signalled that ultra loose monetary policies would continue.

Banking operations globally, including ATMs throughout the world, are threatened as support from Microsoft for Windows XP operating system will end from Tuesday, April 8. Windows XP also powers  medical devices, industrial control systems and some of the hardware used for swiping credit cards.

More than 95% of ATMs also run the operating system, according to NCR, the largest provider of ATMs globally. It expects only a third of ATM providers will upgrade before Microsoft’s April 8th cut-off according to the Financial Times.

Banks are being asked to take immediate steps to prevent their ATMs becoming inoperational. The end of support for Windows XP is likely to increase the probability of attacks on such antiquated systems and may affect ATM operations according to Microsoft.

From April 8, 2014, Microsoft will stop issuing updates and patches for bugs in its Windows XP operating systems, which was released in 2001. It may be difficult to defend such attacks in the absence of Microsoft support. Microsoft themselves and experts have said that the probability of attacks is 100%.

Many banks have failed to upgrade their systems, including ATMs, and may still be working on Windows XP. They are being advised both by Microsoft and indeed by some central banks to take immediate steps to implement appropriate systems and controls.

The financial system remains vulnerable with much unappreciated technological and systemic risk. Owning non digital, physical bullion coins and bars in segregated, allocated accounts in Singapore is now one of the safest ways to own precious metals. Protect and grow your wealth by reading The Essential Guide To Storing Gold In Singapore

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It’s mid-March, which means it is time for the annual confidence boosting theatrical spectacle known as the Fed’s stress test (for those who may have forgotten last year’s farce when Jamie Dimon preempted the Fed by announcing a dividend in advance of the results, can read here). And like in the past, there were absolutely no surprises with 29 of 30 banks passing with flying colors. Of course, since it is a “test”, and someone has the be sacrificial calf, this year that honor falls to Zions Bankshares. Last year its was Citi, SunTrust and MetLife. In both years the results are completely meaningless, as the Fed neither then, nor now, has any methodology for how to calculate capital in case of the same kind of counterparty failure chain as happened during Lehman, and when no amount of capital would have been sufficient to preserve the financial sector. Like we said: theatrical spectacle. But at least everyone’s confidence has been boosted. So Buy stawks, and build your paper wealth!

WSJ summarizes the results:

The Federal Reserve’s annual test of big banks’ financial health showed the largest U.S. firms are strong enough to withstand a severe economic downturn, potentially clearing the way for banks to reward investors with dividends and stock buybacks.

 

The Fed said 29 of the 30 largest institutions have enough capital to continue lending even when faced with a hypothetical jolt to the U.S. economy lasting into 2015, including a severe drop in housing prices and a spike in the unemployment rate.

 

The results will factor into the Fed’s decision next week to approve or deny individual banks’ plans for returning billions of dollars to shareholders through dividends or share buybacks. The Fed’s annual “stress tests” are designed to ensure large banks can withstand severe losses without needing a government rescue.

 

Under its “severely adverse” scenario—which projects a deep recession with surging unemployment, a steep drop in housing prices and a nearly 50% drop in equity prices over nine quarters—the Fed found the 30 banks would suffer loan losses of $366 billion. The Fed said banks are “collectively better positioned” to withstand such losses.

 

…

 

Bank of America was the lowest performer among the big banks, with a Tier 1 common ratio that dropped as low as 6% under the Fed’s hypothetical scenarios. Bank of America would have lost $49 billion before taxes, the highest of any of its peers.

As always, our condolences to the bank that picked the short stick this year:

Only Zions Bancorp, a regional lender based in Salt Lake City, posted capital levels during the two-year downturn scenario that failed to meet the Fed’s minimum standards. The Fed said Zions had a Tier 1 common capital ratio of 3.5%, below the Fed’s 5% minimum. Zions has said previously it will likely resubmit its capital plan to the Fed in light of its selling certain debt securities as a result of the Volcker rule, which the Fed and other regulators adopted in December

And here is the truly funny part: in the baseline stress test scenario, the Dow Jones “plunges” to 11.4K in Q3 2014, and then somehow surges back to all time highs by Q4 2016! Does the Fed understand the word Stress?

 

Full CCAR below:

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Treasuries ended the day practically unchanged. Gold, despite some early weakness, ended the day unchanged. The USD ended higher onthe day – extending post-Yellen gains but was esentially flatlining aside from concerted buying pressure from 3ET to 7ET. Copper kept falling (as did silver) and oil prices slipped lower. VIX pressed lower as stocks rallied out of the gate but VIX diverged notably after Europe's close to end the day almost unchanged near 15%. So, given all of that, where do you think stocks closed? Thanks to a pre-CCAR ramp in US financial stocks (which notably diverged from financial credit spreads), US equities managed to clamber their way back up to pre-FOMC levels before giving some back inthe late-daye (with a mini-melt-up into the close). AUDJPY ruled the 'fundamental'-driven US equity markets from open to close.

 

Spot The Odd One Out…

 

US financials led the post-Yellen re-exuberance…

 

Which dragged the blue-chip indices up to unch from FOMC before fading into the close…

 

And while much of this rampaging recovery from Yellen's mis-step is due to US financial stocks jerking higher into tonight's CCAR results – but credit wasn't buying it…

 

Of course AUDJPY ruled stocks all day…

 

And VIX diverged notably…

 

FX markets have been trading in fits and jumps – total flatline then chaos –

 

Copper crapped out again… (but wasn't yesterday's ramp the end of the problems? – That's what we were told?)

 

Charts: Bloomberg

Bonus Chart: The chart explains why Shinzo Abe should be stockpiling "Depends" (via Brad Wishak of NewEdge)

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Following the default of 2 more corporations last night, Hang Seng’s index of China Enterprises plunged to 8-month lows and officially entered bear market territory. Overnight angst in the Chinese currency markets (which saw the Yuan trade back to 1-year lows) has sparked broad commodity weakness (as CCFD unwinds en masse) with copper giving back most of yesterday’s major short squeeze gains back. Chinese corporate bond prices also tumbled to one-month lows.

Hang Seng’s China Enterprise Index (the most liquid vehicle for trading Chinese stocks for foreigners) has entered a bear market

 

as cash-for-commodity financing deals continue the unwind,

 

Charts: Bloomberg

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Back in 2011, when as part of the Arab Spring one after another regime were toppled in North Africa following violent coups, not without substantial support by the US foreign service and the CIA, the local population was delighted – after all there is nothing quite like the specter of Hope and Change to lift one’s mood, and murder the reigning dictator. Unfortunately, what is usually not discussed, is that within a very brief period of time, usually within a year or two, the post-coup nations promptly reverted to violence and kicked out the ascendent coupy rulers themselves. Hardly new, this is process has been observed in history throughout time, most notably with the French revolution, where the concept of the Thermidorian Reaction was first penned. Most recently, this was best captured by events in Egypt in the past year, when the Hillary Clinton-blessed regime of Morsi was toppled last summer with even more violent witchhunts organized against its Muslim Brotherhood supporters. No wonder one hardly hears a peep about this particular US success story.

So where should we look for the next such process? Why in Ukraine of course. Only right now the general population is still in its euphoric Hope and Change phase. Understandable – the evil regime has been toppled and the new and pure (even though in reality they are just as corrupt as the old ones) politicians are in charge, so why not look to the future with rose-colored sunglasses?

Alas, Ukraine’s honeymoon period with its new rulers may end far sooner that most expect, and it will be certainly accelerated with news such as this. A few hours ago, Interfax reported that Ukraine expects to increase domestic gas prices by 40% once discounted import prices from Russia expire, the country’s Energy Minister Yury Prodan told journalists in the European Parliament on Thursday.

Just as we warned a few weeks ago when we were discussing the creeping capital controls gripping the crisis-riddled country with the foundering currency and its rapidly depleting reserves, the first thing that usually happens, with or without foreign aid, is runaway inflation. And a 40% jump in one of the core staples will certainly dent much of the quite brief and tenuous hope and change the population may have had as a result of recent events. Because once the downstream effects of nat gas funnel through the economy, we wouldn’t be surprised if Ukraine ends up with hyperinflation of all goods and services within the year.

What is certain, is that the struggling population, most of whom never wanted the recent political overhaul and were quite happy with life as it was, will suddenly demand a return to the living standards under the old, if “horrible” regime, and demand an even quicker overhaul of the current administration.

Something Putin knows all too well.

Why does he know it? Because current events are a carbon copy of what happened in 2007 that led to the infamous 2008 Ukrainian political crisis.

What happened in 2007? This:

Ukraine agreed to pay close to $180 for every thousand cubic meters of natural gas it gets next year from Russia, Russia’s state-run gas monopoly said, marking a nearly 40% increase over current prices.

 

The deal, which comes after months of negotiations between Moscow and Kiev, is part of what Russia describes as an effort to stop giving energy supplies to former Soviet republics at cut-rate prices.

 

That effort escalated into a full-blown dispute two years ago, when Russia cut supplies to Ukraine. The dispute affected some European countries, raising concerns about Russia’s reliability as Europe’s main energy supplier.

 

OAO Gazprom said Ukraine agreed in a deal signed by Ukrainian Energy Minister Yury Boiko to pay $179.50 for every thousand cubic meters it buys from Russia next year. Gazprom said transit prices would be set at $1.70, the price for gas shipping across Russia.

 

Ukraine currently pays $130 for every thousand cubic meters of gas from Russia.

 

In October, Russia urged Ukraine to make good on what it said was a $1.3 billion debt for gas shipments, a demand described by some Ukrainian officials as an effort to influence Ukrainian politics after September’s parliamentary elections.

 

The deal comes a week after Gazprom said it would pay as much as 50% more next year for natural gas from Turkmenistan. Russia controls nearly all gas exports from the Central Asian nation.

Funny how history not only rhymes, but sometimes repeats itself. Verbatim.

via Zero Hedge http://ift.tt/1lTNoUG Tyler Durden

Having warned of Putin’s blind-spot (and Merkel’s position of potential leadership) in the Europe-US-Russia debacle, billionaire investor George Soros has some ideas on how to punish Russia (and some warnings on the consequences)…

• *SOROS SAYS PUTIN ‘ACTING OUT OF WEAKNESS’
• *SOROS SAYS UKRAINE CRISIS IS LEADERSHIP CHANCE FOR MERKEL
• *SOROS SAYS MERKEL’S LEADERSHIP HAS GROWN IN UKRAINE CRISIS
• *SOROS SAYS U.S. SELLING OIL RESERVES WOULD HURT RUSSIA
• *SOROS SAYS U.S. HOLDS ‘STRONGEST SANCTION’ WITH OIL RESERVE

Via Bloomberg,

Russian President Putin sought to prop up flagging support at home in a move that “turned him adventurous abroad and repressive at home,” billionaire investor and Chairman of the Open Society Institute George Soros said today during a podium discussion in Berlin.

Soros also said:

Putin “acting out of weakness” following sag in domestic popularity since beginning second term as president

 

On Merkel: Ukraine crisis “an opportunity for the chancellor to emerge as the leader of a united Europe, not just a chancellor preoccupied with the national interests of Germany.”

And added that the US still holds the biggest bazooka…

“Strongest sanction” against Russia “is in the hands of the United States” because U.S. could sell crude from the Strategic Oil Reserve and depress prices, investor George Soros says during panel discussion in Berlin.

 

Says Russia needs oil at $100/bbl “to balance the budget”

The problem, Soros notes, is…

“Task is to help Ukraine rather than just punishing Russia because just punishing Russia will push Putin further into a corner and as a wounded animal he would strike back and it would be a lose-lose proposition.”

So will Obama shoot himself in the foot?

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Submitted by Simon Black of Sovereign Man blog,

Truth can be a damn difficult thing to digest sometimes.

Some of us have been there. You get that news from the doctor that you, or a loved one, has just been diagnosed with a serious disease, and it hits you like a ton of bricks.

Several years ago my father was diagnosed with a brain tumor known as a Glioblastoma (GBM). A GBM diagnosis is essentially a death sentence– it’s one of the most aggressive tumors in existence, and it grows in the part of the body that modern medicine understands the least.

I clearly remember the neurosurgeon telling us, “There have been some miraculous advances in medicine over the last 20-years related to the treatment of cancerous tumors. Unfortunately, this tumor is not one of them.”

It was a tough pill for everyone to swallow… especially my father.

Our natural defense mechanism as human beings is to deny reality. These sorts of things happen to other people, not to us.

It’s this same defense mechanism that leads people to ignore the obvious fiscal realities of their home country despite overwhelming objective evidence.

After all, debt-fueled collapse happens to other countries. Not to us.

We go our entire lives being told that our country is different. We’re special.

We have televised ‘experts’ going on TV explaining why our debts and deficits don’t matter. And Nobel Prize-winning pseduoscientists complaining that our debts and deficits aren’t big enough.

But deep down you know the truth.

In the Land of the Free, the Government Accountability Office (GAO) recently released its 2013 Financial Report of the United States government.

This is the government’s best attempt at an honest accounting of its books. And even though they use a different accounting system that gives them special advantages, the picture is still remarkably bleak.

We all know that the US government has racked up a substantial debt; as of this morning, total outstanding public debt is $17,546,814,482,078.90. ($17.5 trillion)

But it’s not all about the debt. Debt is not necessarily evil… and it’s important to look at the situation qualitatively in addition to quantitatively.

Let’s drop a few zeros and consider this in terms of personal finance.

Assume you had $1.75 million in total debt. That sounds like a lot to most people.

But if you had $3 million in liquid assets to offset the debt, plus $500,000 in annual income to pay interest, living expenses, and just about any contingency that could come your way, you’d be in great shape.

It would be even better if that $1.75 million in debt financed a lucrative real estate investment which was generating a 25% cash-on-cash return for you.

But that’s not the case for the US government.

Despite the Obama administration touting a budget deficit of “only” $680 billion in 2013, the GAO’s more accurate accounting shows a total government cost of $3.8 trillion on total revenue of $2.8 trillion.

In other words– the administration wasn’t exactly honest with the American people– the deficit was more like $1 trillion, not $680 billion. But it gets worse.

The GAO added up ALL the US government’s assets in 2013. Aircraft carriers. The highway system. Land. Cash and financial assets. The total is $2.97 trillion.

The liabilities, on the other hand, total $19.88 trillion. This includes the official public debt, plus all sorts of IOUs and loan guarantees.

This means the net EQUITY of the US government is minus $16.9 trillion.

Moreover, the US government’s cash position is a mere $206 billion… roughly 1.1% of its public debt. This isn’t enough to cover net interest payments for the next year.

Unlike a savvy investor who borrows cheap money to purchase productive assets, the US government borrows money to pay interest.

Quantitatively AND qualitatively, the data point to an inevitable conclusion: despite all the propaganda, this is NOT a risk free environment.

And understanding these trends and consequences is absolutely critical to your long-term financial survival.

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Having been shown yesterday by the all-knowing Federal Reserve that growth expectations are “over-optimistic”, we are sure President Obama will make it clear that the US is growing (but could do better), that jobs are being created (but could do better), and how middle-class opportunity is right around the corner if it wasn’t for them dastardly Republicans…

 

The President is due to speak at 230pmET…

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While the US administration continues to fire ‘sanction’ bullets at Russia and explains how painful these will be, Senator John McCain – in response to his own sanctioning by the Russians – has responded… (as has John Boehner)

Via John McCain’s website,

U.S. Senator John McCain (R-AZ) today released the following statement on being sanctioned by Russian President Vladimir Putin:

 

“I guess this means my spring break in Siberia is off, my Gazprom stock is lost, and my secret bank account in Moscow is frozen.

 

Nonetheless, I will never cease my efforts on behalf of the freedom, independence, and territorial integrity of Ukraine, including Crimea.”

A few more of the exclusive club of sanctioned Americans have commented too…

Proud to be included on a list of those willing to stand against Putin’s aggression http://t.co/AL67mauKqq

— Speaker John Boehner (@SpeakerBoehner) March 20, 2014

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