Saturday, 12 May 2018

Weekend Update 12/05/2018 The Great Tectonic Rift.


Just because something doesn’t do what you planned it to do doesn’t mean it’s useless.

Thomas Edison

President Trump took aim at Iran this week and set off an earthquake that’s split America off from Europe and the rest of the world. And it’s a great tectonic rift that calls into question the viability or wisdom of partnering with America, or using American components in trade.

The near collapse of China’s ZTE telecoms giant following US sanctions, has set in motion a long term international quest to bypass and replace any and all US choke points. At a stroke there is near universal distrust of American intentions. It is hard to see how America rows back from the course President Trump has set out on.

International agreements involving the USA, are now voidable at the discretion of the US President of the day. US contracts of supply are terminable at the whim of the occupant of the White House. At a stroke, President Trump turned America into an unreliable and dangerous trade partner. The long term damage is only in its infancy. Wherever possible, the rest of the world is incentivised to replace US technology and parts.

Up first, a shocked Europe reels from the Trump earthquake.

May 11, 2018 / 2:01 PM

Europe moves to safeguard interests in Iran after U.S. pullout

BERLIN/PARIS (Reuters) - Europe’s largest economies lobbied to protect their companies’ investments in Iran on Friday, seeking to keep the nuclear deal with Tehran alive after Washington pulled out and threatened to impose sanctions on European companies.

Germany and France have significant trade links with Iran and remain committed to the nuclear agreement, as does Britain, and the three countries’ foreign ministers plan to meet on Tuesday to discuss it.

That is part of a flurry of diplomatic activity following Tuesday’s unilateral withdrawal from what U.S. President Donald Trump called “a horrible, one-sided deal”, a move accompanied by the threat of penalties against any foreign firms doing business in Iran.

German Chancellor Angela Merkel said ways to save the deal without Washington needed to be discussed with Tehran, while France’s Finance Minister Bruno Le Maire said EU states would propose sanctions-blocking measures to the European Commission.

“Do we accept extraterritorial sanctions? The answer is no,” Le Maire told reporters.

“Do we accept that the United States is the economic gendarme of the planet? The answer is no.

“Do we accept the vassalization of Europe in commercial matters? The answer is no.”

British Prime Minister Theresa May and Trump agreed in a phone call that talks were needed to discuss how U.S sanctions on Iran would affect foreign companies operating in the country.

May’s spokeswoman said May had told Trump that Britain and its European partners remained “firmly committed” to ensuring the deal was upheld as the best way to prevent Iran from developing a nuclear weapon.

Both Le Maire and Germany’s finance minister Olaf Scholz had spoken to their U.S. counterpart Steven Mnuchin, urging him to consider exemptions or delays for companies already present in the country.

Le Maire said he was seeking concrete exemptions for countries already present in Iran, including Renault, Total, Sanofi, Danone and Peugeot. Scholz had also asked for concrete measures to help German companies, Handelsblatt newspaper reported.

The 2015 agreement between major powers and Iran set limits on its nuclear activities in exchange for the lifting of sanctions. Europeans fear a collapse of the deal could intensify conflicts in the Middle East.

Germany, France and Britain want talks to be held in a broader format to include Iran’s ballistic missile programme and its regional military activities, including in Syria and Yemen.

“The extent to which we can keep this deal alive ... is something we need to discuss with Iran,” said Merkel, who earlier spoke with Russian President Vladimir Putin on the issue.

----French exports to Iran doubled to 1.5 billion euros ($1.79 billion) last year, driven by sales of aircraft and automobile parts, according to customs data.

Exports of German goods to Iran rose by around 400 million euros to 3 billion euros. Around 120 German firms have operations with their own staff in Iran, including Siemens (SIEGn.DE), and some 10,000 German companies trade with Iran.

“We are ready to talk to all the companies concerned about what we can do to minimise the negative consequences,” Altmaier told Deutschlandfunk radio. “That means, it is concretely about damage limitation”.
More

May 12, 2018 / 3:15 AM 

China's ZTE paid over $2.3 billion to U.S. exporters last year, ZTE source says

(Reuters) - Chinese technology company ZTE Corp 0000063.SZ (0763.HK), which this month suspended its main operations after a U.S. Commerce Department ban on American supplies to its business, paid over $2.3 billion (1.7 billion pounds) to 211 U.S. exporters in 2017, a senior ZTE official said on Friday.

ZTE paid over $100 million each to Qualcomm Inc (QCOM.O), Broadcom Inc (AVGO.O), Intel Corp (INTC.O) and Texas Instruments (TXN.O), the official said.

As one of the world’s largest telecom equipment makers, ZTE relied on U.S. companies such as Qualcomm and Intel for components.

The extent of the impact of the Commerce Department ban on U.S. suppliers was noted by the ZTE official, who was not authorized to speak publicly, as Chinese and U.S. government officials discuss a Washington visit next week by China’s top economic official.

In March last year ZTE paid nearly $900 million in penalties for exporting U.S. technology to Iran and North Korea in violation of sanctions.

In April this year, the Commerce Department found ZTE had violated the terms of last year’s settlement and banned U.S. companies from providing exports to ZTE for seven years. As a result, ZTE suspended its main operating activities earlier this month.

----The ban also hurts ZTE’s ability to provide services, such as repairs to infrastructure, to customers in other countries and regions in which it operates. ZTE provides services for 100 million users in India, 300 million users in Indonesia, and 29 million users in Italy, the official said.
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In EUSSR news, Brussels is about to get the new Italian government from hell. But can Brussels really bully Italy the way it can small upstarts like Hungary, Poland and the Czech Republic?  My guess is that we will shortly find out.

May 11, 2018 / 3:27 PM 

Wanted - Italian prime minister, as 5-Star and League negotiate

ROME (Reuters) - Italy’s two anti-establishment parties, the 5-Star Movement and the far-right League, are drafting a programme for a new government in the hope of ending almost 10 weeks of political stalemate, but are still seeking someone to lead it.

To address concerns that their pledges to raise welfare spending and cut taxes will undermine the economic stability of the heavily indebted country, 5-Star leader Luigi Di Maio said the administration would not be a threat to Europe.

Di Maio met with League leader Matteo Salvini for a second consecutive day, and afterward they signalled there had been progress on policy, but still offered no names for the top job.

Asked about the premiership, Salvini told reporters: “When we have something to say, we’ll say it.”

The two party leaders will meet again in Milan on Saturday, and a 5-Star source said the aim was to offer a candidate to President Sergio Mattarella on Sunday.

Vincenzo Spadafora, a close aide to Di Maio, said the two parties were looking for someone outside both parties who “has a high profile and is trusted by Italian citizens and Italy’s international partners”.

Di Maio insisted after the March 4 election that he should be the next prime minister, but dropped this demand last week to help clinch a deal with the League.

5-Star won 32 percent of the vote, making it the largest party in parliament, while the League got 17 percent to become the second-largest. Salvini said weeks ago he would not insist on leading any government his group was a part of.

The parties said meetings to agree a programme to cut taxes, hike welfare payments and bolster efforts to stop irregular immigration had made progress.
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In other news, Mexico just got cyber hacked, but by whom?  America’s NSA to pay for Trump’s wall? The Russians? The Ukrainian mafia?

May 12, 2018 / 12:47 AM

'Unauthorized transfers' siphon funds from Mexican banks: central bank

MEXICO CITY (Reuters) - An as yet unknown amount of funds were sucked out of at least five Mexican financial groups through “unauthorized transfers” in recent days, a top central bank official said on Friday, while stopping short of calling it a cyber attack.

Lorenza Martinez, head of Banxico’s payment system, told Reuters that it was still unclear how much money had been fraudulently transferred and she refrained from naming the affected institutions, which could include banks and brokers.

“These unauthorized transfers were originated in the system that connects the institutions to the payment system,” Martinez said in a telephone interview, noting that banks had to migrate to an alternate, slower technology to process payments.

Slow interbank transfers since the end of April and terse statements by authorities have fed concerns in social media that Latin America’s second biggest economy could be the latest victim of cyber attacks that have hit central banks and financial groups around the world.

Martinez said that the central bank’s SPEI interbank transfer system was not compromised but that the problem had to do with software developed by institutions or third-party providers to connect to the payment system.

Mexico’s SPEI system is a domestic network similar to the SWIFT global messaging system that moves trillions of dollars each day.

Hackers have used SWIFT connections to target banks around the world, but the Brussels-based company has not disclosed the number of attacks.

Martinez refrained from calling the incidents in Mexico a cyber attack. “At this time, we cannot reject any hypothesis,” she said. “It was something done on purpose, but how it was done, we are in the process of finding out.”

Martinez said that no clients had been affected since the transfers hit accounts of financial institutions in the central bank.

The funds had been wired to accounts that appeared to be false, she said.

Local banks were carrying out their own investigations with security experts and were in the process of filing charges with authorities after the incident that also involved cash withdrawals from the bogus accounts, she said.
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Finally, modern technology’s latest Trojan Horse. If researchers can do it in the lab, “five eyes” and Russian, Chinese, and Israeli spooks can do it too. How did that incriminating evidence get on your computer?

Technological progress has merely provided us with more efficient means for going backwards.

Aldous Huxley

Alexa and Siri Can Hear This Hidden Command. You Can’t.

Researchers can now send secret audio instructions undetectable to the human ear to Apple’s Siri, Amazon’s Alexa and Google’s Assistant.
May 10, 2018
BERKELEY, Calif. — Many people have grown accustomed to talking to their smart devices, asking them to read a text, play a song or set an alarm. But someone else might be secretly talking to them, too.

Over the last two years, researchers in China and the United States have begun demonstrating that they can send hidden commands that are undetectable to the human ear to Apple’s Siri, Amazon’s Alexa and Google’s Assistant. Inside university labs, the researchers have been able to secretly activate the artificial intelligence systems on smartphones and smart speakers, making them dial phone numbers or open websites. In the wrong hands, the technology could be used to unlock doors, wire money or buy stuff online — simply with music playing over the radio.

A group of students from University of California, Berkeley, and Georgetown University showed in 2016 that they could hide commands in white noise played over loudspeakers and through YouTube videos to get smart devices to turn on airplane mode or open a website.

This month, some of those Berkeley researchers published a research paper that went further, saying they could embed commands directly into recordings of music or spoken text. So while a human listener hears someone talking or an orchestra playing, Amazon’s Echo speaker might hear an instruction to add something to your shopping list.

We wanted to see if we could make it even more stealthy,” said Nicholas Carlini, a fifth-year Ph.D. student in computer security at U.C. Berkeley and one of the paper’s authors.

[Read more on what Alexa can hear when brought into your home]

Mr. Carlini added that while there was no evidence that these techniques have left the lab, it may only be a matter of time before someone starts exploiting them. “My assumption is that the malicious people already employ people to do what I do,” he said.

These deceptions illustrate how artificial intelligence — even as it is making great strides — can still be tricked and manipulated. Computers can be fooled into identifying an airplane as a cat just by changing a few pixels of a digital image, while researchers can make a self-driving car swerve or speed up simply by pasting small stickers on road signs and confusing the vehicle’s computer vision system.

----Courts have ruled that subliminal messages may constitute an invasion of privacy, but the law has not extended the concept of privacy to machines.

Now the technology is racing even further ahead of the law. Last year, researchers at Princeton University and China’s Zhejiang University demonstrated that voice-recognition systems could be activated by using frequencies inaudible to the human ear. The attack first muted the phone so the owner wouldn’t hear the system’s responses, either.

The technique, which the Chinese researchers called DolphinAttack, can instruct smart devices to visit malicious websites, initiate phone calls, take a picture or send text messages. While DolphinAttack has its limitations — the transmitter must be close to the receiving device — experts warned that more powerful ultrasonic systems were possible.

That warning was borne out in April, when researchers at the University of Illinois at Urbana-Champaign demonstrated ultrasound attacks from 25 feet away. While the commands couldn’t penetrate walls, they could control smart devices through open windows from outside a building.

This year, another group of Chinese and American researchers from China’s Academy of Sciences and other institutions, demonstrated they could control voice-activated devices with commands embedded in songs that can be broadcast over the radio or played on services like YouTube.
More

It has become appallingly obvious that our technology has exceeded our humanity.

Albert Einstein

The monthly Coppock Indicators finished April.

DJIA: 24,163 +255 Down. NASDAQ: 7,066 +282 Down. SP500: 2,648 +188 Down.
All three slow indicators moved down in March and continued down in April. For some a new bear signal, for others a take profits and get back to cash signal. 

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