Rubénerd!

An interesting (or at least, I thought it was interesting!) report from the Guardian:

The Bundesbank plans to bring back to Germany some of its 1,500 tons of gold stored in the vaults of the Federal Reserve in New York, and the 450 tons stashed with the Bank of France in Paris, reported the German newspaper Handelsblatt.

Economics aside, why was it all there?

Most of Germany’s gold reserves have been stored overseas since the cold war amid fears of a Soviet invasion.

While a fascinating idea, the official press release from the Bundesbank website makes no mention of the cold war or the Soviet Union as a reason.

The image above is of the Deutsche Bundesbank building in Frankfurt, by MBisanz on Wikimedia Commons. A classic Brutalist design. The building in the photo, not the photographer. You're weird. KRQRG636ED2W

Got a replacement bank card in the mail today with PayPass. For those interested, here is my letter I sent to Westpac this morning!

Sean Livingstone
Bank Manager, Westpac Surry Hills
547 Crown St
Surry Hills NSW 2010
Australia

Dear Mr Livingstone,

Replacement card without PayPass

I recently received a replacement Debit MasterCard in the post. Unfortunately, I was disturbed to read this in the welcome letter:

Your new Westpac Debit MasterCard with PayPass has arrived

Your current Westpac Debit MasterCard is due to expire at the end of the month, so we're plaesed to present you with its replacement which now includes the security of CHIP technology and the added convenience of the latest in contactless payment technology.

As an IT student and developer with experience in wireless technolgies, I have informed and severe reservations about bank cards with embedded antennas, let alone one that's tied to my daily checking account.

I would like to request a new replacement card without the SmartPay antenna, as you issued me with previously. Otherwise, I suppose a delicate scalpal job to sever the antenna from the CHIP may be in order.

I appreciate your understanding,

Ruben Schade

For some reason I got into the habit years ago of using Kallen to hold legal letters. I think it started with this in 2009!

My previous Bitcoin post drew some ire from those saying it was a viable alternative to the broken financial system. From Slashdot:

"A fortnight ago the Bitcoin financial website Bitcoinica was hacked and the hacker stole $87,000 worth of Bitcoins. At the time the owner promised that all users would have their Bitcoins and US dollars returned in full, but one of the site developers has just confirmed that they have no database backups.

So the alternative is to run a deflationary currency off vulnerable servers without database backups. Ah but the existing banking system gambles with our money too, so it's fine!

An eyebrow-raising story just published on ZDNet Australia made me realise I'd never commented on Bitcoin here before!

The story

Written by Luke Hopewell less than an hour ago:

The ABC has caught one of its own trying to mine Bitcoins using its infrastructure.

The Australian Broadcasting Corporation (ABC) looked set to become a haven for Bitcoin virtual currency mining last year, after a so-called "miner" placed a piece of code in the production environment, which could have potentially netted to thousands of dollars. The ABC's security systems, however, had other plans.

I thought Bitcoin was an interesting concept when it first came out, but I had reservations. I wasn't alone; while it clearly appealed to certain Libertarian minded people eager to escape the clutches of taxation and runaway government defecits that could devalue "real" money, there were those who claimed it would fail for the same reason every other online currency has. Such a discussion is beyond the scope of this post!

I like to say I'm a reformed Libertarian!

No, for me the concern was about energy. To introduce scarcity into a system of abundance, Bitcoins are manufactured through a computationally intensive and complex program. Referred to as "mining", people would be awarded at random for their efforts. Well no, people with more powerful and more expensive setups are statistically more likely to be awarded stuff, and those who can't afford them wouldn't. Libertarianism in a nutshell ;).

The problem for me is, while the Bitcoins mined with this program are virtual, their impact is real. Thousands of CPU hours burning real energy most likely produced from dirty fossil fuels created this stuff. If you're going to run a program on your computer 24/7, the least you could do would be to have it do something useful, like finding cures for diseases. If that doesn't rock your boat, spare the planet your extra energy use and put your machine on standby when not using it!

Which brings us back full circle to this article in ZDNet. This worker at the ABC, a government owned company and therefore owned by Australians like me, were using our computers and money to power them to generate Bitcoins for themselves. To me, that goes beyond what we'd normally describe as misuse of property.

I'll be interested to read the outcome of this investigation as more details emerge.

Remember all those DBS ATM skimmer problems I talked about earlier this year? Seems that it hasn't affected their bottom line:

SINGAPORE - DBS Group, Southeast Asia's largest bank, posted a record quarterly profit that beat analysts' expectations due to higher loan margins and trading income, and was bullish in its outlook.

The money is all in Asia now folks!

Ironically, I'm thinking of moving to OCBC. During some recent family adventures with a handful of banks, they've been by far the most tolerable. As far as banks go, that's high praise!

I know this is rather beyond the scope of a weblog of nerdish interests, but this story really grabbed my attention over the last few days. It also gives me an excuse to an impromptu book review!

Artsy image of the Goldman Sachs headquarters by Quantumquark on Wikimedia Commons.

The story

For those of you who don't follow this kind of thing (and I don't blame you!), a former worker at the investment bank Goldman Sachs has publicly come out describing the firm with some... rather choice words.

From a Reuters report by Douwe Miedema and Lauren Tara LaCapra, which you can tell because the first word of the report is "Reuters":

(Reuters) - Goldman Sachs faced an unprecedented assault from one of its own on Wednesday after a banker published a withering resignation letter in the New York Times, calling the Wall Street titan a "toxic" place where managing directors referred to their own clients as "muppets."

Disgruntled staff talking bluntly about their previous place of employment is hardly new, but these comments from Greg Smith made me raise an eyebrow. If I were capable of raising a single eyebrow. I tried my best to teach myself as a kid, but I never could do it. Perhaps I should have spent that time studying finance. But I digress.

The book review

One of the first books I read when I procured a Kindle was "Money and Power". In the book, William D. Cohan outlined in painstaking detail the history of Goldman Sachs, paying particular attenton to the course of events that led to what the firm is today, how they bundled and marketed all their derivatives into "products", as well as opinions internally and externally about the firm. I find myself shaking my head in disbelief at times, but there was no doubt it was fascinating.

The recurring theme from the book was the idea senior management (the "partners" everyone strove to be) wanted to give the impression that the firm only succeeded when their clients did. There were some glaring examples of where this clearly wasn't true; such as their numerous conflicts of interest.

Still, the press release from Goldman Sachs in response to Greg's comments seemed to reinforce this sentiment. Good heavens, that was a long sentence.

"We disagree with the views expressed, which we don't think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves."

Hmm, wait a minute!

This is where it gets interesting though. Read this report much further, and towards the end we get this comment from a banker at a competing institution:

"In my experience ... client success and firm success can peacefully coexist; in fact thrive," Harris Private Bank Chief Investment Officer Jack Ablin said in an open letter.

Note the wording. Mr Albin didn't say client and firm success "always coexist", or "needs to coexist", he said "can coexist". That suggests the capability to coexist, but whether or not that's what happens in the real world is another point entirely.

Perhaps I'm reading a little too far into a single word, but it sounds like political speak to me. You don't want to admit your firm is doing something, but on the other hand you don't want to deny it and later be called out for it.

In any case, Jack Albin doesn't work for Goldman Sachs, but I think he spoke an untold truth of the whole investment banking community with that comment. No doubt Goldman's PR department would be far too sharp to let such a comment slip ;).

From the Australian @ABCNews:

Big four banks warned they may be downgraded by Fitch because of reliance on offshore funding

The Coalition and its sympathisers regularly take credit for the reforms instituted by Hawke and Keating, but what's really kept the coal-fired Australian juggernaut moving are mineral exports to booming markets, and a ready pool of cheap foreign credit. Banks could take money from depressed markets with low interest rates, then charge Australians local rates. Obviously, this disparity fuelled a gravy train like... a train powered by gravy. Mmm, gravy!

As for ratings agencies: well, I've voiced my opinion of them before, especially with regards to Ireland.

Not strictly speaking a journalistic endeavour this time, but one that still deserved to be added to the collection:

Wikipedia: Big Four (banking)

Big Four is the colloquial name for the four main banks in several countries, where the banking industry is dominated by just four institutions and where the phrase has gained currency.

Oh you! Reminds me of that Westpac campaign in 2009, where I also suggested a possible followup to. I was so witty in those days.

I didn't intend for this to be a series, but here we are again! We heard of the skimmer problems with DBS ATMs, and the response the bank garnered from customers. Now we're finding out what DBS is going to do about it.

Photo from the DBS 2010 Annual Report. I'll bet their 2011 report will mention losses incurred from this incident. Maybe!

Prevention is good, but...

Channel NewsAsia reported on the basics, but for the real story we turn to the DBS Newsroom which inexplicably needs JavaScript enabled to work. How terribly frustrating!

If you're a cardholder you'll want to read the full report, but this seems to be the primary action they're taking:

All customers who have made overseas withdrawals using their ATM/ Debit cards at any point in time on or after 1 July 2011 will be able to continue to use their cards outside Singapore. However, they can also choose to block the overseas ATM cash withdrawal function at any DBS/POSB ATM, branch or by calling the DBS contact centre. For added protection, they can also choose to lower their daily cash withdrawal limit at any branch

If I'm parsing this correct, DBS are implementing an opt-in approach for overseas ATM banking. This would seem to be the opposite of what HSBC does; I handle some finances for my father, and in the case of his HSBC cards he's informed by SMS when overseas transactions occur. I think both serve their purpose, but the opt-in approach would be the most foolproof.

Maybe! Hey, I've said that once before here. No wait, twice. Maybe. Ah, crap.

Yes, but what about the hardware?

While these preventitive measures are valuable, they don't address the underlying hardware issue: that ATMs in Singapore can have skimmers installed which record customer information. To that end, DBS offered some advice:

Be Observant - If something about the ATM does not seem or 'feel' right, then stop your transaction and use another ATM. Do not remove any suspicious devices from the ATM, as it may be under surveillance by fraudsters.

I'll be looking out for another followup press release. In the meantime, I'd better check that I've used my POSB ATM card in Sydney since July last year; I'm pretty sure I haven't!

Two follow-up stories on my post regarding the DBS/POSB ATM saga. Encasing my NETS card in lucite!

Photo by the writer of Some things to Remember.

Notifications

From Channel News Asia, posted yesterday evening:

SINGAPORE: DBS Group Holdings chief executive Piyush Gupta said the bank will provide SMS alerts for ATM withdrawals beyond a certain amount or when it detects unusual transaction activity.

The move comes after 400 customers fell victim to a card skimming fraud where S$500,000 was withdrawn from their bank accounts without their authorisation over two days on January 4 and 5.

On the surface this sounds like great news, and I applaud it.

What worries me are the dates reported. If you'll recall, in my last post the article I quoted said the skimming took place last November. An honest mistake, or have there been more incidents since? And if so, I'm sure other banks have been affected too... are DBS/POSB the only ones fessing up?

Give us better security!

Whatever the case, it seems consumers are starting to demand better security which makes nothing but sense:

SINGAPORE: Most Singaporeans Channel NewsAsia spoke to said they will continue to use ATMs despite the latest fraud which hit 400 POSB and DBS customers this week.

However, they said they expect the bank to beef up ATM security to prevent a similar incident in the future.

Of course, they have reservations about security that should sound familiar to those setting up any secure IT infrastructre:

"Change the PIN number? But I'm afraid I can't remember the number," said one customer.

"Everyone has so many numbers to remember, so many passwords to remember. I think it's difficult," said another.

Leaving aside the issue that unless PINs were changed every single time the precaution wouldn't have prevented the fraud, one can't help but think there has to be a better way.

In the meantime, our old buddy education will have to be employed. The onus should be on banks to inspect their ATMs more thoroughly and regularly for tampering, but consumers should also be made aware of how to spot fraudulent modifications, just as they would look out for suspect email. The fact Singaporeans have largely been spared the onslaught of skimmers in the past may be a fact that works against them.