Posts Tagged ‘Finance’


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Excellent piece on the silver run. 

Facts on Silver

Bob Moriarty
Archives
Apr 25, 2011

For those who missed my piece of March 25, 2011, here is the link. I asked the question, “Is Silver Topping?” I may have been right about silver topping, only time will tell. For certain I was dead wrong about the timing and the price. Silver has rocketed from $38 and change when I wrote the piece to over $47 now.
But lots of people get lots of things wrong about silver. So here are some facts.
1. Silver is going parabolic.
According to Jim Rogers all parabolic moves end badly. I have seen similar charts in all kinds of commodities and they always correct. Parabolic charts mark tops. So when silver bugs start suggesting, “This time it’s different” I know better.
Study the chart below. Ignore the commodity. When charts go parabolic, it ends badly. I was an investor in the 1970s in both gold and silver. I started buying gold at $35 and silver around $5 an ounce. I sold out all my silver in January of 1980 a week too early at $35 as it rocketed to $50.25 an ounce at the open on January 21, 1980. It went parabolic and basically that’s all you need to know.

Those investors who want to buy at new all time highs almost always are the same investors who want to sell at all time lows. Naturally as a guy running a metals site, I think $46 silver is wonderful for all my readers that I was telling to buy at $4 and $6 and $10 and $20. Is silver a good buy today? No, it’s a good sale… to those who insist on buying at tops.
2. The actual ratio of silver to gold in the earth’s crust is not 16 to 1.
It’s more like between 20 or 26 or 64 to one. This is not an absolute fact, these are opinions from experts but no experts conclude the ratio is 16-1. Go to Wikipedia and do the math for yourself.
What happens on the web is that one guy starts a rumor saying there are tens of thousands of gold-plated tungsten bars out there. Some other fool adds a few “facts” to the rumor and all of a sudden hundreds of sites are writing about fake gold bars.
Alas, years later not a single tungsten bar has showed up. It was rubbish and anyone who understood anything about metalworking would understand that technically it would be very hard to do. All 400 ounce gold bars are tracked and if by some strange process someone managed to counterfeit one, he would be caught at once. But you can sell a lot of subscriptions to those who pay to have their fantasies catered to.
It doesn’t matter how many people claim the ratio of silver to gold is 16-1, it simply isn’t true.
3. There is no shortage of silver. There never has been a shortage of silver. Until the laws of supply and demand are repealed, there never will be a shortage of silver.
The first person I ever read that claimed there was a shortage of silver was Ted Butler. He claimed in May that according to his figures the world was going to totally run out of silver by December. This was on the Kitco forum. I wrote and told him he was dead wrong, there were billions of ounces of silver above ground. His response was that according to his numbers, we would be out of silver bullion and that would drive the price of silver all by itself to between $50 and $100 an ounce. In a vacuum. Without gold going up or oil or anything else going up because of inflation. Silver was that rare.
My retort was that with billions of ounces around, prices would soon turn Grannie’s silver service into silver bullion. He insisted I didn’t know what I was talking about; he was the silver “GURU.” The exchange took place in May of 2001 and by December of 2001 I had correctly called the bottom in silver while he was insisting that it would be $50 an ounce. One of us was dead right.
But then he was also the guy claiming that silver was the most critical war material and if we ever go into a war, that would drive silver prices to between $50 and $100 an ounce and it was so rare that you should, “never, never, ever sell silver.” With the US engaged in three different wars at the same time, you would think that silver would be $300 an ounce. It’s not.
My question is, “If you were smart enough to buy 100 ounces of silver at $4 an ounce, a 5000-year low in real terms, how much profit have you made if silver goes to $50 or $100 or $300 and you never, never, ever sell? The answer, of course, and ignored by all the silver “GURUS” is that if you buy low and don’t sell ever, you don’t make any profit. That may be the dumbest investment advice I have ever heard.
Silver is a commodity like any other. If you are smart enough to buy it cheap and you are smart enough to sell it when it gets expensive, you will profit. If you want to buy at all time highs, good luck with that.
There are 19 billion ounces of silver above ground today. People talking about silver “bullion” inventories are being misleading. Silver is silver is silver and it only takes a day to turn a few 200 year-old-tea pots into a boring 1000 ounce “bullion” bar.
Just how accurate is the 19 billion ounce figure? We can figure that out with simple logic. I think the figure accepted by more people for total silver production ever would be about 45 billion ounces. A favorite argument of the permabulls is that silver is consumed, not recycled. Let’s think about that. Silver is used in computers, iPhones, aircraft, and lots of commercial purposes where it isn’t recycled. But that use of silver wasn’t common until perhaps 1960. Silver before that time was recycled. Yes, silver coins did wear but they didn’t wear out, they might lose 20% of their original weight.
If 45 billion ounces were produced, it’s more logical that a good percentage of it is still around. I was in my coin dealer’s shop a week ago. He bought 2800 ounces of silver on Saturday. Not a bar of bullion in the bunch but 2800 ounces of real silver in other forms. The numbers on silver are not hard numbers; we simply don’t know how much silver is around. But we do know there is a lot of silver and with the exception of a short period between the end of November of 1979 and January 21 of 1980, a mere six weeks later, silver has been well under $10 an ounce on average for the last 40 years. How rational is $46 silver? Not very.
I’d guess most silver mines have cash costs between $3 and $10. A market price of $46 an ounce will suck silver out of grannies’ closets and out of the ground at the same time. Every silver refinery in the world is running at capacity right now, if you want silver, there is a lot of it around.
4. The most illogical thinking and worst use of “facts” is common among the silver uberbulls and the parrots that follow them.
Someone just posted the most incredible theory on the validity of SLV. That’s the silver ETF that has been trashed for years by a small group of uberbulls with an agenda. One of their supporters came up with a brilliant argument. Since we don’t really know and can’t prove that SLV actually has all the physical silver, the proof that it is a scam is when they deny it being a scam. Read that carefully. The proof that it is a scam is when they deny it.
So, apparently, if you ask the people behind SLV if it is a scam and they admit it, that means we know it’s a scam since they admitted it. And if you ask the people behind the SLV if it is a scam and they deny it, that also means it is a scam because the proof is when they deny it.
I think that’s circular logic. No matter what the people behind SLV say, it’s a scam.
I have said in the past I have reservations about ETFs and I think investors should be aware of those reservations. If we have a total economic collapse and the financial system freezes, all ETFs could be frozen or worse for months. That includes Sprott’s paper silver, the CEF and SLV and all ETFs of all sorts. What happened in Argentina could happen in the US, it could happen all over the world. It’s entirely possible that all banks close for a good period of time, after all they are insolvent now and have been since September of 2008. But a financial freeze would affect all forms of paper silver including Sprott’s silver trust.
The CEF fund and the SLV have done more to improve the price of silver and gold than any other single action in the last 50 years. Silver bugs should be grateful SLV holds 366 million ounces of silver instead they are whining and posting simply absurd articles totally lacking in either facts or logic.
When someone posts something that ridiculous and lacking in logic, you may safely presume they don’t know what they are talking about. That’s real common when people write about silver and it’s going to cost investors a whole lot of money.
The daily bullish consensus on silver is 96% as of Wednesday the 20th of April. On January 21st of 1980, the very day of the top, the bullish consensus was 94%. How many of the silver uberbulls are suggesting that maybe the record high bullish consensus is suggesting a very dangerous time to start buying? The answer is damned few because they have an agenda and their agenda doesn’t involve them knowing what they are talking about. As long as they tell investors what they want to hear, they will be very popular.
5. There cannot be a run on Comex. The rules do not allow the chance for a run.
For years I have watched as each time silver runs up, certain people start spreading rumors that silver is in such shortage that there will be a run on Comex. The only problem with the rumor is that it can’t possibly happen. There cannot be a run on Comex. I repeat, there cannot be a run on Comex.
Part of the reason for the rumor is that most investors confuse the purpose of the exchanges. The purpose of the exchanges is not to exchange commodities. The purpose of the exchanges is to determine price. But certainly the possibility of a run on an exchange is possible so early on the exchanges adopted rules that called for cash settlement if necessary.
Most people don’t know this because they don’t read the small print but if you have a savings account, the bank has the right to withhold payment for up to 90 days. And all mortgages are essentially 90 notes at their heart. That’s right, the bank can demand full payment within 90 days if they wish and during the 1930s that’s how thousands of Americans lost their homes even when they were paying their mortgage.
I don’t write the rules and you don’t write the rules and they are what they are if you like it or not. There cannot be a run on silver, it’s impossible. So anyone writing about it is spreading disinformation. Of course anyone who ever passed a Series 7 exam know this but you will never hear the silver uberbulls mention it. I wonder why.
There are three guys in the mining business that are so smart and have such great track records that for 70% of investors in metals, they should buy into their mutual funds and stop trying to outsmart the market by picking stocks. The top three guys in the industry are Ken Gerbino, Eric Sprott and Frank Holmes. If you like metals and shares in resource stocks, stop trying to be so smart yourself, it’s difficult work. Hand your money to them to invest in one of their funds and you will do just fine.
That said, Eric Sprott seems to have done something that hasn’t happened to the market since the days of Johnny Carson. You have to be getting on in age to remember it but back in 1973 Johnny Carson started a toilet paper shortage that lasted a month. He was making a joke. He said that there was a toilet paper shortage. The next day, millions of rolls of toilet paper flew off the shelves of every store in the US and by noon there was no toilet paper to be had. It was nothing but a joke.
Don’t let anyone convince you that supply and demand doesn’t work. They do work and that’s far more important for you to know than belief in some mysterious manipulation conspiracy theory. I’ve heard all the stories and know all the arguments. No one in history has made a cent from a belief in market manipulation.
If gold has gone up 4100% since 1950, higher than any other commodity, anyone manipulating it down has done a piss poor job. And who cares if 4 guys have sold more silver short than exists in the known universe? Those are all interesting theories but that’s all they are. If you don’t buy low and sell high, you can’t make money. End of story.
Eric Sprott started his own paper silver fund called the Sprott Physical Silver Trust. It’s still paper silver like SLV or the CEF fund. It has some unique features, not benefits but features. He has done a brilliant job of promoting it.
Recently he purchased $300 million dollars more physical silver to put in the closed fund. As a result of his excellent promotion, as of last Wednesday, silver was selling for $46. If you bought the CEF silver fund, you paid $47.88 for silver. If you bought SLV, you paid $46 with no premium but if you bought PSLV, the Sprott Silver Trust, you paid an incredible $57.73 an ounce for silver.
I’d say that Eric Sprott buying $300 million dollars more silver lately was incredible timing. He pocketed probably $60 million in profit. Is Eric Sprott bullish on silver? I’d say so. He has 60 million reasons to be bullish. He can buy at the exact top of silver and watch a 25% decline and still make money.
How wise was it for investors to pay a 25% premium for silver? I’d like to believe my readers are smart enough to figure that out for themselves. Eric Sprott is both brilliant and rich but paying 25% over spot is not wise investing.
The Hunt Brothers investing in silver drove silver to $50.25 an ounce for a few minutes on January 21, 1980. I think it would be fair to credit the silver boom of 2011 to Eric Sprott. He’s not really saying anything new about silver, though, Ted Butler was claiming that we were about to run out of silver 10 years ago and claiming that silver was the most manipulated of all metals long before Eric Sprott bought his first ounce of silver for a fund. But Eric Sprott adds credibility. But we weren’t running out of silver ten years ago. We aren’t running out of silver now.
One of two things is going to happen. Either we are at a top and silver is about to crash both hard and long, or the world’s financial system is about to fall apart. I have been an advocate of a total financial crash for a lot longer than most writers. I was writing about the dangers of derivatives in 2002 when they were 15% of what they are now.
But I don’t believe the world’s financial system is going to crash next week. As in January of 1980, the silver bulls are going to be the ones losing money. You can’t profit if you don’t sell and all the permabulls are screaming “Buy, buy, buy.” As they will at every top. Buying at record high prices is rarely profitable. But perhaps this time it really is different.
Here’s what all potential investors in silver need to know.

  1. The chart of silver has gone parabolic. Parabolic charts mark tops no matter what the commodity.
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  2. The bullish consensus on silver is at a record high. Record high bullish consensus on any commodity is common at tops.
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  3. When the most credible guys in an industry start explaining why supply and demand don’t really work, it’s a top. With 19 billion ounces of silver above ground we aren’t about to run out any time soon.
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  4. When guys start writing about silver that didn’t have a clue as to what it was or what it was used for at the bottom, you are at a top. I’m astonished at both the ignorance and the arrogance of the newly invented silver “Gurus.”
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  5. When the smartest guys in an industry start telling you, “This time it’s different,” it’s not. It’s just a top.
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Bob Moriarty
President: 321gold


>Texas University Takes Cue From Kyle Bass to Hold $1 Billion in Gold Bars

By David Mildenberg and Pham-Duy Nguyen – Apr 16, 2011 11:45 AM GMT+0200

The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.

The fund, whose $19.9 billion in assets ranked it behind Harvard University’s endowment as of August, according to the National Association of College and University Business Officers, added about $500 million in gold investments to an existing stake last year, said Bruce Zimmerman, the endowment’s chief executive officer. The holdings are worth about $987 million, based on yesterday’s closing price of $1,486 an ounce for Comex futures.

The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said at its annual meeting on April 14. Bass made $500 million on the U.S. subprime-mortgage collapse.

“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”

Gold reached an all-time high of $1,489.10 an ounce yesterday in New York as sovereign debt concerns boosted demand for the metal as a store of value. Gold has climbed 28 percent in the past year on Comex.

The endowment, which oversees funds held by the University of Texas System and Texas A&M University, has 6,643 bars of bullion, or 664,300 ounces, in a Comex-registered vault in New York owned by HSBC Holdings Plc (HSBA), the London-based bank, according to a report distributed at the meeting in Austin.

To contact the reporter on this story: David Mildenberg in Austin, Texas, at dmildenberg@bloomberg.net. Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

Texas University Takes Cue From Kyle Bass to Hold $1 Billion in Gold Bars

The MasterMetals Blog


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Scarred by the Dot-Com Bust, Reinvented for Social Media

Thomas WeiselNoah Berger/Bloomberg NewsBeen there: Thomas Weisel scouted technology start-ups in the 1990s and is doing so again.
SAN FRANCISCO — Thomas Weisel doesn’t have much personal experience with social media. He has never opened a Facebook or Twitter account, and he has resisted buying an iPhone.
But Mr. Weisel knows a lot about overheated markets. His firm, Thomas Weisel Partners Group, was a dominant force in taking technology companies public during the dot-com boom and was hobbled when that bubble burst in 2000.
Today, Mr. Weisel, 70, is assessing the industry landscape from his corner office at the Stifel Financial Corporation, the brokerage firm that bought his struggling company in April 2010. Although the current frenzy raises concerns, he says he thinks it is unfair to compare Internet stocks during the late 1990s to social media companies now.
“In a sentence, the big difference is these companies, in many cases, are enormously profitable out of the gate,” he said.
Mr. Weisel, who as co-chairman of Stifel’s board is still out hustling banking business, is among the many heavyweights from the dot-com days who are reinventing themselves in the era of social media.
Mary Meeker, the research analyst who was called the Queen of the Internet, recently joined theventure capital giant Kleiner Perkins Caufield & Byers. Frank Quattrone, the Wall Street investment banker who helped take Amazon.com public in 1997, now has his own boutique advisory group working with technology start-ups and stalwarts, including National Semiconductor on its recent deal with Texas Instruments. Sandy Robertson, previously a founder of Robertson Stephens, a technology banking firm, joined Francisco Partners, a private equity shop that focuses on technology.
Lise Buyer, a former Credit Suisse First Boston analyst who currently advises companies on potential public offerings at her firm, Class V Group, jokes that she is “running into everyone” she knew from the go-go period of the late 1990s.
“Social media is a new frontier,” Mr. Robertson said.These veterans offer a unique perspective, having survived the previous technology craze and now playing a role in the current one.
Mr. Weisel, a Rochester, Minn., native who was once a competitive speed skater, rose to fame during the technology boom. In the early 1990s, he ran Montgomery Securities, one of the boutique banks known as the Four Horsemen that dominated technology underwriting during the decade. During his tenure, Mr. Weisel took Yahoo public and helped orchestrate StrataCom’s sale to Cisco for $4.7 billion, at the time the largest technology acquisition that year.
But like many at the time, Mr. Weisel was swept up in the frenzy. In an interview in January 2000, he declared the tech boom was “the Super Bowl of all Super Bowls.” Just a couple months later, the bubble burst — a crushing blow to his firm.After NationsBank bought Montgomery in 1997, he struck out on his own, starting Thomas Weisel Partners. He quickly landed a number of big assignments, including advising Yahoo on its acquisition of GeoCities.
In the aftermath, Mr. Weisel tried to diversify his firm away from technology, which accounted for more than 80 percent of revenue. He expanded into health care and consumer products. To raise capital, he took Thomas Weisel public in 2006.
But the firm never really recovered from the dot-com bust, and in 2010, it was sold to Stifel Financial.
His experience over the last decade has influenced his view. While he remains bullish on technology broadly, he says social media stocks are far from a slam dunk.
“They have great potential, but they have to continue to produce,” Mr. Weisel said.
After years of managing, Mr. Weisel is happy to play the role of sage counsel. He regularly meets with technology entrepreneurs and executives, to help Stifel Financial land deals.
The notable difference this time is the underlying business models of many companies, he says. Technology costs are minimal, which allows social networking sites to be profitable almost immediately. During the dot-com boom, companies burned through cash and took years to turn a profit — if they did at all.
“For the most part, these are real companies with real revenue and are generating real cash flow,” he said.
Even so, Mr. Weisel says it is critical for companies like Groupon, which is said to be valued at roughly $25 billion, to maintain their leadership position.
“First-mover advantage is key,” Mr. Weisel said. “If they don’t continue to produce, someone next door will come in and build a better mouse trap.”
He points to MySpace as a cautionary tale. In 2006, it was the top social networking site, with users topping 50 million that year, according to the research firm comScore. But it has steadily ceded ground since then to Facebook, which claims 150.7 million users today versus 37.7 million for MySpace. Its current owner, the News Corporation, recently put MySpace on the auction block.
Mr. Weisel is also watching valuations. Companies like Facebook, which is worth an estimated $50 billion, may not be able to justify such numbers unless their strategies evolve and they find new sources of profit.
“Right now, these business models are typically brand new and not fully vetted,” Mr. Weisel said. “They have to figure how to continue to monetize the traffic they are getting or valuations will fall off.”

The Barons of Two Booms

Other major Wall Street players from the dot-com bubble have reinvented themselves.
Sandy Robertson
Sandy Robertson
THEN: A founder of the boutique bank Robertson Stephens, he proclaimed in 1999 that tech companies were the most expensive stocks ever.
NOW: While he wonders if sites like Facebook are the modern equivalent of the defunct citizens’ band radio, Mr. Robertson, an executive at the private equity firm Francisco Partners and a director at the software company Salesforce.com, sees great potential.
Mary Meeker
Mary Meeker
THEN: As an analyst for the investment bank Morgan Stanley, Ms. Meeker was referred to as the Queen of the Internet for her bullish investment calls on technology companies like Amazon.com and eBay.
NOW: Ms. Meeker left her perch at Morgan Stanley in late 2010 to join Kleiner Perkins Caufield & Byers, the venture capital firm based in San Francisco. An investor in the start-ups Groupon and Zynga, the firm recently introduced a $250 million social media fund.
Henry Blodget
Henry Blodget
THEN: Once a high-flying technology analyst at Merrill Lynch whose stock recommendations often moved the market, Mr. Blodget was accused by regulators of issuing positive ratings on stocks in public while deriding them in private e-mails. As part of a settlement, he was barred from the securities industry.
NOW: Mr. Blodget is currently the editor and chief executive of The Business Insider, a gossipy news site that covers Wall Street. He has more than 28,000 followers on Twitter.

Sent from a wireless device.


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New Hacking Tools Pose Bigger Threats to Wi-Fi Users

 

February 16, 2011

You may think the only people capable of snooping on your Internet activity are government intelligence agents or possibly a talented teenage hacker holed up in his parents’ basement. But some simple software lets just about anyone sitting next to you at your local coffee shop watch you browse the Web and even assume your identity online.
“Like it or not, we are now living in a cyberpunk novel,” said Darren Kitchen, a systems administrator for an aerospace company in Richmond, Calif., and the host of Hak5, a video podcast about computer hacking and security. “When people find out how trivial and easy it is to see and even modify what you do online, they are shocked.”
Until recently, only determined and knowledgeable hackers with fancy tools and lots of time on their hands could spy while you used your laptop or smartphone at Wi-Fi hot spots. But a free program called Firesheep, released in October, has made it simple to see what other users of an unsecured Wi-Fi network are doing and then log on as them at the sites they visited.
Without issuing any warnings of the possible threat, Web site administrators have since been scrambling to provide added protections.
“I released Firesheep to show that a core and widespread issue in Web site security is being ignored,” said Eric Butler, a freelance software developer in Seattle who created the program. “It points out the lack of end-to-end encryption.”
What he means is that while the password you initially enter on Web sites like Facebook, Twitter, Flickr, Amazon, eBay and The New York Times is encrypted, the Web browser’s cookie, a bit of code that that identifies your computer, your settings on the site or other private information, is often not encrypted. Firesheep grabs that cookie, allowing nosy or malicious users to, in essence, be you on the site and have full access to your account.
More than a million people have downloaded the program in the last three months (including this reporter, who is not exactly a computer genius). And it is easy to use.
The only sites that are safe from snoopers are those that employ the cryptographic protocol transport layer security or its predecessor, secure sockets layer, throughout your session. PayPal and many banks do this, but a startling number of sites that people trust to safeguard their privacy do not. You know you are shielded from prying eyes if a little lock appears in the corner of your browser or the Web address starts with “https” rather than “http.”
“The usual reason Web sites give for not encrypting all communication is that it will slow down the site and would be a huge engineering expense,” said Chris Palmer, technology director at the Electronic Frontier Foundation, an electronic rights advocacy group based in San Francisco. “Yes, there are operational hurdles, but they are solvable.”
Indeed, Gmail made end-to-end encryption its default mode in January 2010. Facebook began to offer the same protection as an opt-in security feature last month, though it is so far available only to a small percentage of users and has limitations. For example, it doesn’t work with many third-party applications.
“It’s worth noting that Facebook took this step, but it’s too early to congratulate them,” said Mr. Butler, who is frustrated that “https” is not the site’s default setting. “Most people aren’t going to know about it or won’t think it’s important or won’t want to use it when they find out that it disables major applications.”
Joe Sullivan, chief security officer at Facebook, said the company was engaged in a “deliberative rollout process,” to access and address any unforeseen difficulties. “We hope to have it available for all users in the next several weeks,” he said, adding that the company was also working to address problems with third-party applications and to make “https” the default setting.
Many Web sites offer some support for encryption via “https,” but they make it difficult to use. To address these problems, the Electronic Frontier Foundation in collaboration with the Tor Project, another group concerned with Internet privacy, released in June an add-on to the browser Firefox, called Https Everywhere. The extension, which can be downloaded at eff.org/https-everywhere, makes “https” the stubbornly unchangeable default on all sites that support it.
Since not all Web sites have “https” capability, Bill Pennington, chief strategy officer with the Web site risk management firm WhiteHat Security in Santa Clara, Calif., said: “I tell people that if you’re doing things with sensitive data, don’t do it at a Wi-Fi hot spot. Do it at home.”
But home wireless networks may not be all that safe either, because of free and widely available Wi-Fi cracking programs like Gerix WiFi Cracker, Aircrack-ng and Wifite. The programs work by faking legitimate user activity to collect a series of so-called weak keys or clues to the password. The process is wholly automated, said Mr. Kitchen at Hak5, allowing even techno-ignoramuses to recover a wireless router’s password in a matter of seconds. “I’ve yet to find a WEP-protected network not susceptible to this kind of attack,” Mr. Kitchen said.
A WEP-encrypted password (for wired equivalent privacy) is not as strong as a WPA (or Wi-Fi protected access) password, so it’s best to use a WPA password instead. Even so, hackers can use the same free software programs to get on WPA password-protected networks as well. It just takes much longer (think weeks) and more computer expertise.
Using such programs along with high-powered Wi-Fi antennas that cost less than $90, hackers can pull in signals from home networks two to three miles away. There are also some computerized cracking devices with built-in antennas on the market, like WifiRobin ($156). But experts said they were not as fast or effective as the latest free cracking programs, because the devices worked only on WEP-protected networks.
To protect yourself, changing the Service Set Identifier or SSID of your wireless network from the default name of your router (like Linksys or Netgear) to something less predictable helps, as does choosing a lengthy and complicated alphanumeric password.
Setting up a virtual private network, or V.P.N., which encrypts all communications you transmit wirelessly whether on your home network or at a hot spot, is even more secure. The data looks like gibberish to a snooper as it travels from your computer to a secure server before it is blasted onto the Internet.
Popular V.P.N. providers include VyperVPN, HotSpotVPN and LogMeIn Hamachi. Some are free; others are as much as $18 a month, depending on how much data is encrypted. Free versions tend to encrypt only Web activity and not e-mail exchanges.
However, Mr. Palmer at the Electronic Frontier Foundation blames poorly designed Web sites, not vulnerable Wi-Fi connections, for security lapses. “Many popular sites were not designed for security from the beginning, and now we are suffering the consequences,” he said. “People need to demand ‘https’ so Web sites will do the painful integration work that needs to be done.”

New Hacking Tools Pose Bigger Threats to Wi-Fi Users – NYTimes.com: “

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Published: February 16, 2011

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Let the CyberWars begin…


Exchanges on high alert after hacker attack – FT


Nasdaq OMX, the global exchange operator said on Saturday that it had been targeted by hackers. There was a breach but that “at no point” were its trading platforms compromised.
On Saturday, the Wall Street Journal reported that hackers had “repeatedly” penetrated Nasdaq’s systems, and that US officials were investigating the attack.
More recently the operators of Europe’s carbon emissions trading markets suspended business in their spot emissions contracts after the European Union said its carbon trading platform had come under attack from cyber-thieves.

Nasdaq targeted by hackers

By Telis Demos in New York and Joseph Menn in San Francisco
Published: February 5 2011 23:27 | Last updated: February 5 2011 23:27
Nasdaq OMX, the global exchange operator said on Saturday that it had been targeted by hackers. There was a breach but that “at no point” were its trading platforms compromised.
On Saturday, the Wall Street Journal reported that hackers had “repeatedly” penetrated Nasdaq’s systems, and that US officials were investigating the attack.
Nasdaq confirmed that “suspicious files” were detected on Directors Desk, a web application for companies to share documents remotely that is unrelated to its trading systems.
It also said that the US Department of Justice had requested that it not tell customers about the investigation until February 14.
The files were detected late last year, and Nasdaq says it immediately contacted forensic firms and US law enforcement agencies. The files were deleted and Nasdaq says there is “no evidence” that information on Directors Desk was accessed by hackers.
The Federal Bureau of Investigation’s New York cybercrime unit, along with the US Department of Justice’s Southern District of New York is investigating the attack. Nasdaq said it is co-operating with officials on an ongoing inquiry.
Neither agency was available for comment.
Cybercrime against exchanges is a significant concern for government officials, who fear that a significant breach could spark a financial panic.
Nasdaq and other exchanges say their systems are frequently targeted, but have reported no major breaches. Last year, the London Stock Exchange investigated but dismissed the possibility that sabotage was at fault for a trading halt, ultimately blaming “human error”.
More recently the operators of Europe’s carbon emissions trading markets suspended business in their spot emissions contracts after the European Union said its carbon trading platform had come under attack from cyber-thieves.

Read the rest of the article here.

weOctober 03 2010 7:47 AM GMT
Big Mac index gives more than a taste of true worth

By Steve Johnson

Intervention has kept some emerging market currencies artificially weak, at the same time many have raised interest rates to stem inflation. It is only a matter of time before some allow their currencies to appreciate
Read the full article at: http://www.ft.com/cms/s/0/2736d936-cd89-11df-9c82-00144feab49a.html?ftcamp=rss

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