Reforms at North Korea

Reuters
Friday, Jul 20, 2012

BEIJING – Impoverished North Korea is gearing up to experiment with agricultural and economic reforms after young leader Kim Jong-un and his powerful uncle purged the country’s top general for opposing change, a source with ties to both Pyongyang and Beijing said.
The source added that the cabinet had created a special bureau to take control of the decaying economy from the military – one of the world’s largest – which under Kim’s father was given pride of place in running the country.
The downfall of Vice Marshal Ri Yong-ho and his allies gives the untested new leader and his uncle Jang Song-thaek, who married into the Kim family dynasty and is widely seen as the real power behind the throne, the mandate to try to save the battered economy and prevent the secretive regime’s collapse.
The source has correctly predicted events in the past, including North Korea’s first nuclear test in 2006 days before it was conducted as well as the ascension of Jang.
The changes could herald the most significant reforms by the North in decades. Previous attempts at a more market driven economy have floundered, most recently a drastic currency revaluation in late 2009 which triggered outrage and is widely believed to have resulted in the execution of its chief proponent.
“Ri Yong-ho was the most ardent supporter of Kim Jong-il’s’military first’ policy,” the source told Reuters, referring to Kim Jong-un’s late father who plunged the North deeper into isolation over its nuclear ambitions, abject poverty and political repression.
The biggest problem was that he opposed the government taking over control of the economy from the military, the source said, requesting anonymity to avoid repercussions.
North Korea’s state news agency KCNA had cited illness for the surprise decision to relieve Ri of all his posts, including the powerful role of vice chairman of the ruling party’s Central Military Commission, though in recent video footage he had appeared in good health.
Ri was very close to Kim Jong-il and had been a leading figure in the military. Ri’s father fought against the Japanese alongside Kim Jong-il’s late father Kim Il-sung, who founded North Korea and is still revered as its eternal president.
The revelation by the source was an indication of a power struggle in the secretive state in which Kim Jong-un and Jang look to have further consolidated political and military power.
Kim Jong-un was named Marshal of the republic this week in a move that adds to his glittering array of titles and cements his position following the death of his father in December. He already heads the Workers’ Party of Korea and is first chairman of the National Defence Commission.
The North Korean Embassy in Beijing, reached by telephone, declined to comment.
REFORMS
North Korea’s cabinet has created a “political bureau” which will wrest power from the 1.2 million-strong military to run the economy which has been in shambles after a crippling famine in the 1990s, the source said.
“In the past, the cabinet was empty with no say in the economy. The military controlled the economy, but that will now change,” the source said. Kim Jong-un has set up an “economic reform group” in the ruling Workers’ Party to look at agricultural and economic reforms, the source said, adding that North Korea will learn from its giant neighbour and solitary benefactor, China.
Beijing leaders are thought to have been pressing Pyongyang to do more to reform the economy, worried that a collapse of the North could send refugees streaming across its border and the loss of a strategic buffer to South Korea and the large contingent of US troops which help protect it.
It was unclear who will head the cabinet’s “political bureau” and the party’s “economic reform group”, but change was inevitable, the source said.
In sharp contrast to the austere, reclusive image of his father, state media have shown Kim Jong-un visiting fun fairs, speaking in public and applauding at a rock concert at the weekend.
Women appear to have been more freedoms, including wearing short skirts, although 200,000 people are in prison camps in the impoverished and isolated country.
The source dismissed speculation of any political fallout from the purge, saying: “Kim Jong-un and Jang Song-thaek are in control of the military.”
Jang has long been seen as a proponent of reform of an economy which through mismanagement has entirely missed out on the fruits of dramatic growth of neighbours like China and South Korea.
His push for reform was widely seen as having triggered a period of exile but he was later rehabilitated and given the primary role of supporting Kim Jong-il’s son when he was being groomed to eventually take over the leadership.
North Korea has yet to name Ri’s replacement as head of the army, the source said.
It was unclear how many of Ri’s men have been sacked, but the source said they have not been jailed. An assessment of the changes by the South Korean government seen by Reuters, said that some 20 top officials had been purged since Kim Jong-un began his ascent to power.

Medishield premiums to go up in major revamp

By Lin Wenjian | Yahoo! Newsroom – Wed, Jul 18, 2012
Premiums for MediShield, Singapore’s national health insurance scheme, are set to rise next year even as it aims to provides wider and enhanced coverage for Singaporeans.
The annual premium will rise between S$17 and $251 per year, depending on a person’s age.
For the majority of policyholders aged 65 and below, the raise will amount to no more than S$5 per month.
For those older, their premiums will be largely offset by the annual and one-time Medisave top-ups.
“The important thing is to assure Singaporeans that even with the adjustment in premiums and deductibles, MediShield and healthcare will continue to be affordable for Singaporeans,” said Health Minister Gan Kim Yong on Wednesday at the opening of a new training centre at Tan Tock Seng Hospital.
Explaining the decision behind the revamp, the last of which was done in 2008, Gan said that costs have risen as patients receive better drugs and treatment. Claims by an insured person have also been going up.

The new changes would help “restore the focus of Medishield on larger bills which will impose a much larger financial burden on patients”, he added.
For those that have difficulties paying their MediShield premiums and deductibles despite the assistance given will have avenues such as Medifund to turn to for further help.
Medisave top-ups of up to $450 a year under the GST Voucher scheme can also offset the premium, said MOH.
In the Budget this year, a one-time Medisave top-up of up to S$33 per month was announced to help Singaporeans absorb the impact of the increase.
Among the major changes, the amount hospital patients can claims will also be increased. From next year, patients will be able to claim up to S$70,000 for their hospital bills annually, up from the current S$50,000.
The lifetime claims limit will be adjusted from S$200,000 to S$300,000 to help patients who face large medical bills.
MediShield coverage will also be extended to two groups of policyholders: Those up to 90 years old, from 85 previously; and newly-diagnosed patients who need in-patient psychiatric treatment, with daily claim limit capped at S$100.
MediShield will also cover short-stay wards in the hospitals’ emergency departments.  
Coverage will be extended to include congenital and neo-natal conditions, although this is subject to public feedback.
“For congenital and neo-natal conditions to be covered under MediShield, the population will then have to take into account the premiums that will be associated with this additional coverage. So we want to listen to feedback. It is a process of consultation,” Gan said.
The proposed coverage will cost about S$12 per year, or about S$1 per month, and a public consultation will be launched from 18 July to 15 August 15 to gather feedback. Singaporeans may also send their feedback to moh_info@moh.gov.sg.

Flip properties only if you got plenty of cash

Extracted from Yahoo.com
By Ryan Ong | MoneySmart – Wed, Jul 18, 2012 12:00 AM SGT

Back in ’07, house flipping was the express train to Moneyville. Stock brokers were flipping houses. Pensioners were flipping houses. My dog groomer, whose property knowledge doesn’t extend beyond 72 ways to de-stain a carpet, was flipping houses. Then came the government measures, which derailed the gravy train faster than a budget rail worker. But even with new regulations, is successful house flipping possible? I find out:

What is House Flipping?

Flipping is when someone buys a house, then attempts to quickly re-sell it for profit. While typical property investors wait years for property values to rise, a house flipper re-sells in weeks.
A house flipper secures the option to purchase (OTP), then transfers the OTP to a buyer who is offering a higher price. For example:

  1. A house flipper offers to buy a house for $1,000,000.
  2. The house flipper secures the OTP at $1,000,000. This costs 1% of the price ($10,000)
  3. The house flipper finds a buyer who offers $1,020,000 for the house.
  4. The house flipper transfers the OTP to said buyer. The excess $20,000, minus any legal fees, is the house flipper’s profit.

(And yes, the eventual buyer pays back the 1%).
But wait, isn’t there a Seller’s Stamp Duty? Yes, and a house flipper can bypass this:

Seller’s Stamp Duty

Since 2011, the government has attempted to discourage flipping. This is done through the seller’s stamp duty (SSD). When you sell a property within the first four years of the purchase, the SSD applies as follows:

  • First Year – 16% (of price or value, whichever is higher)
  • Second Year – 12%
  • Third Year – 8%
  • Fourth Year – 4%
The SSD must be paid within 14 days once the OTP is exercised. As such, it is the eventual buyer who must exercise the OTP, not the house flipper.
I can’t stress this enough: If you exercise the OTP, you’ve bought the house. You will incur the SSD upon trying to sell it

The OTP’s Shelf Life

The cost of the OTP is 1% of the price. So the OTP of a $1,000,000 house is $10,000. This must be paid out of the house flipper’s pocket.
In order to flip, the OTP must also contain the words “…and/or nominees” next to where the house flipper’s name appears.
Once issued, the OTP lasts about 14 to 30 days. The more urgently the seller needs the money, the shorter the given time. Within this duration, the house flipper must find a buyer to transfer the OTP to. Otherwise, the house flipper must either exercise the option himself (buy the house) or forfeit the 1%.
Sounds tough?
It is. But there are still ways you can perform a successful house flip:

  • Take Advantage of Fire Sales
  • Flip During an Up Market
  • Flip When You Have Deep Pockets
  • Flip Properties With Scarcity Value

* There is also another type of house flipping, which involves the transfer of the title instead of the purchase option. I will discuss this in a future article. Like us on Facebook to get updates!

1. Take Advantage of Fire Sales

Fire sales refer to situations when a property is sold below market value. This is usually the result of forced foreclosure by a bank.
Properties in a fire sale are sold below their actual market value. A house flipper could secure the OTP at the lower price, then transfer it to a buyer willing to pay market rates.
Watch out for outsized risks: If a property is going for $995,000, and the market value is $1,000,000, the risk is steep. The 1% OTP is $9,950, which outweighs the potential $5000 profit.

2. Flip During an Up Market

Kelvin Daud, who has flipped two properties, times his decisions according to the property market:
I watch for changes in the residential property price index. If the index rises by at least 2% – 3% between one quarter and the next, I might consider making a flip.
…you cannot flip when the bubble has just burst; that’s the danger.”
Kelvin stresses the dangers of attempting a “down market flip”. He mentions that, in a situation where buyers are waiting for the market to bottom out, it can be hard to find a good buyer in 14 days.
In general, ensure that you attempt flips when the property market is resting, or on an uptrend. Never try to flip when prices are going down.

3. Flip When You Have Deep Pockets 

The biggest problem with flipping is the 1% paid for the OTP.
The simplest way around this is to have cash reserves when you flip. Should you fail to secure your buyer in 14 to 30 days, you can just buy the property yourself. You can then treat your purchase as a regular property investment; drop by sites like SmartLoans.sg, and get the cheapest home loan to reduce your costs.
Hey, if you got it in a fire sale or something, it’s still a good price isn’t it? 
Alternatively, your bank account may be so substantial that the 1% is irrelevant to you.
Property investor Charlie Sng didn’t think so:
I bought a property with the intent to flip. My buyer backed out at the last minute, because he unexpectedly got divorced and wanted to settle proceedings first.
Rather than forfeit the 1%, which was around $12,000, I went ahead and bought the property for myself. Today its value has appreciated, so I have no regrets. But if I had very limited capital, I would have cried about that $12,000.”

4. Find Properties With Scarcity Value 

There are opportunities to flip besides fire sales. One of these is when especially scarce property appears on the market. An example would be a unit in a desirable condo, which is otherwise sold out.
How can you tell when a property is scarce? A lot of homework. It involves knowing the district inside out, and tracking the property market every day. And frankly, if you’re not doing this, you won’t be one who spots that scarce property when it goes up for sale.
Charlie Sng says:
Make sure there are no properties nearby that are too similar. For example, in Punggol right now, there are several new developments that are close to the upcoming mall. More than one such development is within walking distance.
This removes urgency in buying any specific unit just because it’s close to the mall. I think you would be hard pressed to flip a property under such conditions.”

Is It Worth Trying? 

If you have the money and the contacts, it’s worth trying to flip some properties. Hey, it’s fast money. But for those who can’t afford to forfeit the OTP, don’t even try.
Likewise, flipping is not for people who lack contacts in the property market. 14 – 30 days is a very short time in which to sell a house. You should have five or six prospects lined up even before you get t
he OTP; if you don’t, just put it down and back off.

If you are truly interested to hold out and sit out your investments, it is better to go for tax breaks for setting up a holding company if you are really trading properties for profits, there are many considerations for your risk appetide, better seek professional advice if you want to venture furthur.

– Contributed by Oogle  

Global insurance poised to take off


BOSTON/NEW YORK | Mon Jun 11, 2012 7:18am EDT

(Reuters) – Last week’s deal by Prudential Financial to take on $26 billion of the retirement liabilities of General Motors has reignited a part of the American insurance market that had been bouncing along the bottom in recent years.
But experts in the sector say GM’s splash was so big, there may be somewhat limited capacity for more mega-sized deals in the market for pension-risk transfers. Still, the market could be in the tens of billions over the next few years, they said.
A Reuters analysis of the pension obligations of the S&P 500 found that almost half of the companies with underfunded pensions have enough cash to spare to do a risk-transfer deal, including Rupert Murdoch’s News Corp and agriculture giant Archer Daniels Midland Co, suggesting there could be a scramble ahead for that limited capacity.
Known as pension terminal funding, the concept is simple: an employer pays an upfront premium to an insurance company for an annuity that covers all the members of a pension plan.
The insurer becomes responsible, via the annuity, for all of the retirees’ pensions and the sponsor gets to wash its hands of the obligation.
“Starting about a year ago it was the chatter, the chatter picked up … in the last six months, even in the low interest rate environment, transactions are starting to happen,” said Mike Devlin, the head of the Boston office for BCG Terminal Funding, which matches plan sponsors with insurers.
For years, plan sponsors have held off on buying single-premium group annuities to transfer risk, hoping that interest rates would rise from historically low levels, boosting the value of their assets and potentially filling pension gaps without extra cash.
Hewitt Ennisknupp, an Aon unit, estimated there were about 200 single premium group annuity deals done last year, worth about $900 million — just one-third of what had been done even four years previously.
MARKET CATCHING UP
But with rates showing no signs of rising – and even declining further because of the euro zone crisis – the need to get the plans off corporate balance sheets has come to the fore.
These deals are quite similar to what Warren Buffett has successfully done with the asbestos market – insurers pay him a large upfront lump sum and he takes their asbestos liabilities off their hands, betting his ability to earn money on that upfront payment will outstrip the ultimate costs.
Up to now, the pension annuity market had been much more active in the UK, with estimates of just $3 billion in total transfer deals in the United States in the last three years, perhaps one-fifth the size of the British market. One of the executives responsible for the GM deal said that has now changed.
“With the GM transaction, in one fell swoop the (U.S.) pension de-risking market has caught up with where the UK is,” said Dylan Tyson, the Prudential senior vice president who runs the company’s pension risk transfer business. “We’re seeing more activity in this market now than we’ve seen in the last three to five years combined.”
Tyson said Prudential did its first pension transfer deal in 1928, with the public library system in Cleveland, and 84 years later it is still paying “six or seven” pensions as a result.
110 PCT OF LIABILITIES
All of that activity has a cost, though. Given the low interest rate environment, insurers have to charge more upfront (GM paid 110 percent of its liabilities) and then put the money into the highest-returning instruments available.
“Clearly when insurers are looking at entering these types of transactions they’re taking today’s rate environment into account when they’re pricing them,” said Ramy Tadros, head of the Americas insurance practice at Oliver Wyman, which consulted on the GM deal.
Tadros said the capacity for these kinds of deals will have to come from traditional participants, as regulators are unlikely to bless the private equity-backed, special-purpose insurers formed in Britain to take on these liabilities.
Such special purpose companies do not provide nearly the same degree of financial strength and stability U.S. regulators have sought.
“I think capacity in this particular area of terminal funding certainly is not limitless,” said Elaine Sarsynski, executive vice president of retirement services and chief executive of international business at MassMutual.
“There is definitely going to be risk-adjusted capital applied to this business,” she said. “It’s a question of making sure you underwrite with an appropriate return.”
Beyond the availability of capital, there are also questions about compliance with government standards for annuities and retirement plans. BCG’s Devlin said at most a half-dozen insurers comply fully with U.S. Department of Labor guidelines, which are intended to ensure plans are financially sound and safe for consumers.
U.S. regulators have good reason to be careful. The Labor Department’s rules were crafted following the demise of California insurer Executive Life in 1991. The company imploded after heavy investment in junk bonds that were ultimately too risky for such a large pension guarantor.
BEST CANDIDATES
Sponsors of underfunded pension plans may have few alternatives to topping up their plans and then paying those higher transfer fees, given an environment in which 10-year U.S. Treasuries are yielding about 1.6 percent.
Accounting rules require companies to value estimated future liabilities based on the amount of money they would have to set aside now, minus the yield they could collect from investing in high quality bonds. Lower yields mean more money has to be set aside. And as this discount rate has pushed continually lower, the chance that rising rates will save underfunded pension plans has declined.
“I think you see less certainty that pension liabilities will be reduced by interest rates rising any time in the near future,” said Sean Brennan, a principal in the financial strategy group at Mercer. “Plan sponsors are exhausted at waiting for rates to rise.”
Some 94 percent of the biggest corporate pension plans in the U.S. are underfunded, according to the Reuters analysis. At the close of their 2011 financial years, 322 of 343 S&P companies that report their pension status indicated their plans didn’t have enough assets to meet future pension obligations, to the tune of $363 billion.
GM, with a huge cash pile after its government bailout, was in the unusual situation of having the ability to make up for the underfunding in its salaried workers plan plus pay for an annuity. The company said it was using $3.5 billion to $4.5 billion of cash in the deal.
But even GM might be hard pressed to annuitize its remaining U.S. obligations, which are underfunded by an estimated $12 billion to 13 billion, according to Stephen Brown, senior director at credit agency Fitch Ratings. “It’s a hefty up-front cost,” he said. “And many other companies with
underfunded pensions wouldn’t have this much cash lying around.”
The best candidates for future termination deals would be plans closer to full funding that are run by companies with cash available to cover the premiums, Brown said.
The Reuters analysis looked for companies with at least twice the cash needed to do a deal similar to GM’s. The analysis turned up 150 companies with the flexibility to potentially conduct a pension transfer.
Software giant Oracle, semiconductor maker KLA-Tencor and gas producer EQT had among the highest ratios of available cash to the amount needed for a pension deal but all three have relatively tiny pension obligations. Companies with larger plans, like News Corp and Archer Daniels Midland, also made the cut.
“Almost any company could do what GM did,” said John Ehrhardt, principal at actuarial consulting firm Milliman in New York, who reviewed Reuters’ analysis. But because interest rates are at historic lows, pension liabilities are at historic highs, making a potential deal more costly. “That’s the balance the CFO has to make: even if you have the cash on hand, is it worth the hit to de-risk your portfolio?” he said.
KLA, News Corp, Oracle and ADM declined to comment, and EQT did not respond to request for comment.
To be sure, companies that did not make the list could terminate a portion of their pensions, as GM did. And not every company with enough cash to do a termination will do so. GM competitors Chrysler and Ford have both said in recent days that they prefer to use cash for other purposes.
(Additional reporting by Cezary Podkul in New York; Editing by Steve Orlofsky)

Seasonal slowdown until August 2012, nothing to fear

Monday, Jun 11, 2012
AFP

BEIJING – China’s commerce minister said in comments published Monday that the country faces a “severe” trade situation this year, as the Asian powerhouse continues to feel the pinch of global economic woes.
“Foreign trade still faces quite a severe situation going forward,” Chen Deming said in a brief statement carried by the official Xinhua news agency and posted on the central government’s website.
But he said that “with luck”, China would still achieve 10 per cent growth in foreign trade – which combines imports and exports – as per predictions made earlier this year.
The forecast growth for the year ahead is far slower than the 22.5 per cent growth achieved in 2011, as the debt crisis in Europe – China’s biggest export market – rages on.Official data released on Sunday showed exports rose 15.3 per cent on-year in May to US$181.1 billion (S$231.7 billion) and imports grew 12.7 per cent to US$162.4 billion, slightly widening the trade surplus for the third consecutive month to US$18.7 billion.
However, the better-than-expected trade figures failed to downplay concerns that the world’s second largest economy is slowing, after China put in a poor economic performance in May.
Chinese Premier Wen Jiabao last month said greater priority should be given to growth, which slowed to 8.1 per cent in the first quarter of 2012 year-on-year – its slowest pace in nearly three years.
Authorities have been easing monetary policy for some time in an effort to stimulate growth, cutting the amount of money banks are required to keep in reserve three times since December last year.
On Friday, the central bank also cut interest rates for the first time in more than three years and allowed banks more flexibility to set rates, introducing greater competition in the market.

SINGAPORE – The Monetary Authority of Singapore has cautioned that the global economy is set to see slower growth in the near term, amid rising uncertainty from the euro zone crisis and a cloudy outlook for the US economy.
“Renewed uncertainty stemming from the euro-zone debt crisis, a flagging recovery in the US, and deepening slowdowns in China and India pose significant headwinds to near-term global economic growth,” the central bank said in a report on recent economic developments.
“The trade-oriented Asian economies are likely to see activity moderating for the rest of the year, although resilient domestic demand will provide some support.”
Barring a major dislocation in the global economy, the Singapore economy is set to grow by between 1 per cent and 3 per cent this year, MAS said.
The local construction sector is expected to be supported by a strong pipeline of building projects. And this will help provide a boost to construction-related lending activities.
At the same time, tourism-related industries are expected to continue their growth path – thanks to firm visitor arrivals from the region.
The central bank also cautioned that inflation is likely to remain elevated and volatile, and kept its forecast at between 3.5 per cent and 4.5 per cent for this year.

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It is Eurocup 2012 season now and there will be a seasonal slowdown where most economies are having June school holidays so there is nothing to fear, things will definitely return to normal after end July so you must be prepared for it to ride the global wave of recovery, where factory orders for the year end will double in many sectors due to festive seasons and once there is a certain clearity after November US elections, things will take off. Therefore, this season is bad timing for IPOs and other investment decisions like a major launch of products unless you want to capture the school holiday crowd. The only risks is a major God caused event like an earthquake, tsunami or typhoon where the results are devastating, which has less than 1% of happening.
– Contributed by Oogle.

Central Bank can monitor inflows and outflows of funds daily and clean up NPLs, merge banks

By Cat Barton | AFP News
Vietnam’s drive to restructure its troubled banking sector is being derailed by powerful interest groups as the political will needed to force through painful reforms falters, experts say.

After a decade of rapid, chaotic bank liberalisation, Vietnam has ended up with too many domestic banks (42) — many of which are overloaded with toxic debt — and poor governance across the system, economists warn.
Last year, faced with persistently high inflation and critical liquidity conditions at many of the weaker banks, the government announced aggressive restructuring plans.
But as inflation has fallen — from a high of 23 percent last August to 8.3 percent in May, allowing the central bank to increase monetary supply and easing banks’ liquidity problems — so too have appetites for reform.
“Things have calmed down a bit because of falling inflation. So now they’re thinking ‘OK we don’t have to be so aggressive’,” said economist Nguyen Xuan Thanh, director of the public policy programme at the Fulbright School in Ho Chi Minh City.
“The second factor (slowing reform) is the resistance from the banks, from the owners of the banks… the political economy doesn’t allow the government to act decisively by taking over a bank and cleaning it up to sell.”
Aside from five fully-foreign owned banks, such as ANZ and HSBC, the sector is dominated by large state-owned banks and dozens of smaller joint stock banks owned by public or private investors.
After years of rapid credit growth, the balance sheets of many of these banks are weighed down with toxic loans — the majority of which went to badly-run state-owned enterprises and speculative property investments.
While the larger state banks benefit from an implicit government guarantee and continued investor confidence, many of the joint stock banks have serious liquidity problems and can barely stay afloat, experts say.
This has hit the broader economy — credit lines have all but dried up which has affected small and medium businesses particularly badly with some 18,000 going bankrupt this year alone.
Unless there is decisive restructuring, the system will remain unhealthy “and the economy as a whole will suffer”, said Thanh.
What the government needs to do is “take over the weakest banks, merge them, sell off the bad debt and then resell the merged bank”, said Jonathan Pincus, a HCMC-based economist from the Harvard Kennedy School’s Vietnam programme.
“It would be quicker and less risky for the system as a whole. But bank owners would resist this,” he said.
To have a banking licence in Vietnam, one Hanoi-based diplomat said, you have to be “very well connected”. Bank ownership brings benefits — the possibility of kickbacks, access to cheap credit.
Many small joint stock banks are owned by subsidiaries of state-owned enterprises or well-connected groups of investors who own multiple banks, evading regulations with accounting tricks.
The sector is riddled with complex cross ownership patterns which are proving “politically difficult to unwind”, Pincus said.
The government’s reform plan relies on private sector voluntary mergers to improve systemic liquidity by having those with healthy balance sheets absorb those in trouble.
But many banks are hiding the true state of their balance sheets and finding ways to hide their non-performing loans (NPLs), Pincus told AFP.
“They loan money to customers of other banks, who use the money to close out their loans with others. Customers of other banks do that with them. It keeps everyone’s NPL rate down,” he said.
The government has divided the banks into four categories with different credit growth ceilings for 2012 — in effect, identifying the weaker institutions and banning them from lending.
Five to eight of them will be merged this year, the government has said, although it now appears “embarrassed” and is backing off from this pledge, said Le Tham Duong from the Ho Chi Minh City Banking University.
With the first merger of three weak banks in December, rather than the government taking over the institutions, writing off bad debts, and seriously restructuring, the banks were simply rolled together, experts say.
Vietnam’s central bank chief Nguyen Van Binh has said that “in the near future there will be more voluntary mergers and acquisitions under the State Bank’s strict supervision”.
But what is needed is serious state-led restructuring not private sector mergers, said Fulbright’s Thanh, adding that this would require huge resources and a clear admission of the scale of the bad debt problem.
“Politically and legally if you do that it is very risky,” he said. “First there needs to be political will which is still lacking.”

Increased security to deny access to cyberattack

“Ubuntu 11.10 Desktop(32bit) installation CD has been compromised where the folder contains ram0-15 and tty0-62 where they sent screenshots to a maximum of 62 terminals with total control of your keyboard and mouse although it does not contain a key logger which will give it away. Windows desktops seem to be hit with an unknown virus which is even higher than flame virus capabilities and I am still trying to track it down. It seems the creators are targeting me and my research, accessing even my contact lists in my mobile.  The flame virus needs to hop from pc to pc, so it will leave a trail behind even if it deletes all traces from the attack pc, so with network monitoring tools, I can capture and isolate it. The problem I found is attack from suspicious websites which uses code to activate your browser plug-in, sending all activities to a specific website. – Contributed by Oogle.”

IMRWorldwide.com is suspected of possibly being a scam or site engaged in fraudulent activity. Although this has not been verified, below are some community projects watching fraud that may have further information about IMRWorldwide.com.

– Contributed by Oogle.”

Posted: 08 June 2012 1350 hrs
TALLINN: Quick advances in cyber war technologies could soon lead to a new generation of so-called “intelligent cyber weapons” which top global IT defence experts warn could be virtually unstoppable.
“Rapid developments in cyber (technology) might lead to intelligent cyber weapons that are hard to control and it’s practically impossible to use formal methods of verifying the safety of intelligent cyber weapons by their users,” Enn Tyugu, IT expert at Tallinn’s NATO Cyber Defence Centre said at its fourth annual conference on Thursday.
He also warned that programmes developed to counter attacks by malwares like Stuxnet can act independently and could possibly themselves spark conflicts.
“They are quite autonomous, and can operate independently in an unfriendly environment and might at some point become very difficult to control… that can lead to cyber conflict initiated by these agents themselves,” Tyugu said.
“Stuxnet and Flame have shown the side of cyber of which the average user does not think of but which will bring a lot of challenges to all experts who deal with critical infrastructure protection issues – IT experts, lawyers, policy makers,” Ilmar Tamm, Head of the NATO Cyber Defence Centre told AFP on Thursday.
“The number of cyber conflicts keeps rising and it is important to understand who the actors in these events are, how to classify these events and participants, and how to interpret all that,” Tamm said, noting Western leaders have been slow to become aware of even existing cyber threats.
Experts at the conference noted that both China and Russia have significantly upgraded their cyber-defence capabilities in recent years by creating new IT units.
“But the most powerful weapon today in cyber space is still the propaganda, the chance to use the Internet to spread your message,” Kenneth Geers, US cyber defence expert told some 400 top IT gurus attending the meeting Thursday.
Keir Giles, head of Oxford University’s Conflict Studies Research Centre, noted that some Russian leaders seemed to “sincerely believe that the recent opposition rallies after the presidential elections in Russia were initiated by the US in cyberspace.”

– AFP/al
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You can protect against the risks of cyberattack by securing these access;
1) No mobile access for places where security is vital, even using jaming devices to create a field where no mobile devices can be used.
2) Secure powerlines using encryption where even the power supply to computers is restricted and also internet access by encryption of all access. Do not use wireless.
3) A gateway monitoring software eg the latest firewall technologies
4) Point-to-point encryption software
If you cover all of the above, there is virtually zero chance of a cyberattack, if someone is trying to access thru the internet to your pc, then just cutoff your internet access temporary by employing monitoring software.
The greatest security breech is that using powerlines via your computer power supply, someone can access your computer even if you do not have internet access. It is using an unknown technology via an unknown protocol. That is the reason you can run but you cannot hide, only this way you can erase every evidence of breech, if you attack by the internet, you will leave your trail, because you need to hop from pc to pc, even if you erase everything on your compromised pc. The easiest attack is to overheat your computer, cause a blue screen, and insert malicious code into your computer. Therefore there will be a great demand for an IT firm to produce encryption software to tunnel your communications from point to point.

Homeplugs (Only the link between Homeplug devices is encrypted) Manufacturers should redesign the Homeplug to even protect the power supply to the PC

Since signals may travel outside the user’s residence or business and be eavesdropped on, HomePlug includes the ability to set an encryption password. The HomePlug specification requires that all devices are set to a default out-of-box password — although a common one. Users should change this password. On many new powerline adapters that come as a boxed pair, a unique security key has already been established and the user does not need to change the password, unless using these with existing powerline adapters, or adding new adapters. Some manufacturers supply adapters with security key buttons on them, allowing users to easily set unique security keys by plugging each unit in one at a time and pressing the button on the front (see more detailed instructions that come with the units).
To simplify the process of configuring passwords on a HomePlug network, each device has a built-in master password, chosen at random by the manufacturer and hard-wired into the device, which is used only for setting the encryption passwords. A printed label on the device lists its master password.
The data at either end (Ethernet side) of the HomePlug link is not encrypted (unless an
encrypted higher-layer protocol such as TLS or IPsec is being used), only the link between HomePlug devices is encrypted. The HomePlug AV standard uses 128-bit AES, while the older versions use the less secure DES.

Since HomePlug devices typically function as transparent network bridges, computers running any operating system can use them for network access. However, some manufacturers only supply the password-setup software in a Microsoft Windows version; in other words, enabling encryption requires a computer running Windows [1]. Once the encryption password has been configured, Windows will no longer be needed, so in the case of a network where all computers run other systems a borrowed laptop could be used for initial setup purposes.
MPPE (Microsoft Point-to-Point Encryption) Shouldn’t it be free bundled with your Windows 8?
Microsoft Point-to-Point Encryption (MPPE) is a protocol for encrypting data across Point-to-Point Protocol (PPP) and virtual private network (VPN) links. It uses the RSA RC4 encryption algorithm. MPPE supports 40-bit, 56-bit and 128-bit session keys, which are changed frequently to improve security. The exact frequency that the keys are changed is negotiated, but may be as frequent as every packet.
MPPE alone does not compress or expand data, but the protocol is often used in conjunction with Microsoft Point-to-Point Compression which compresses data across PPP or VPN links.
Negotiation of MPPE happens within the Compression Control Protocol (CCP), a subprotocol of PPP. This can lead to incorrect belief that it is a compression protocol.

– Contributed by Oogle.