pub 521E/43FE956C542CA00B created: 2012-10-07 expires: never usage: SC
sub 521e/063FC02F1BFDEAA8 created: 2012-10-07 expires: 2013-12-30 usage: E

Why do I expect such a long migration path?

This key is an Elliptic Curve Public key following RFC6637. It is using a NIST curve of an ECC strength that is 521 bits, which relative to an RSA key should be about 15,360 bits. My RSA key that is this length apparently isn’t supported in newer versions of GnuPG (version 2.1, that is using GPG Agent for storing the secret keys)

Currently the only implementation I’m familiar with that accept ECC keys is GnuPG 2.1, which is still in Beta. The SKS keyservers handle this type of key since version 1.1.4 and the sub-pool hkp://subset.pool.sks-keyservers.net require servers to be at this version, and is as such ECC safe .

The new key might also turn out to be replaced if we get an OpenPGP standard of versions 5 within a reasonable timeframe. Until then, contact me using whichever key you want – as long as you consider the value of your own privacy and is using one of them.

Some servers for various reasons need to have another certificate installed signed by another authority. In order for this to be handled properly, Server Name Indication is used to properly map the request with the virtual host and the certificate to present to the client.

My crawler use curl as the basis for the requests, and as I connect using the hostname found in server-discovery, it use the HTTP Host: header for the pool. The issue with vanilla curl, is however, that there is no way to manually set the SNI hostname to use, and it will default to the hostname of the request.

As such I added a patch that will use the Host header presented instead. I’m adding it here in case it is useful for anyone else.

As a result of the switch sks-keyservers.net is now also encryption-enabled, using a self-signed certificate that can be verified through the Web of Trust of OpenPGP using Monkeysphere.

One thing I am missing in mod_gnutls is however a way to require certain file paths to be encrypted. Ok, this can be done using configuration directives in the VirtualHost settings for the non-TLS enabled host, but I find it much cleaner to be able to append this on a per-directory basis (.htaccess). As such, I’ve written a small patch that add the “GnuTLSRequireSSL” directive to mod_gnutls. This take one argument that can have the values “On” or “Off”. Download the patch here

I started off with some Salmon fishing, granted only got a small one of 1.5kg;

The area is great, and we were lucky with the weather. Below is a picture of the Mardøla streak.

As for computers, I’ve gotten around to implementing support for Elliptic Curve public keys in SKS , and played around with an updated version of pks2wot to allow interaction with SKS for the wot generation, hence called sks2wot.

Most of the vacation was left to relaxation, and reading up on books and magazine subscriptions.

The actual calculations are described in more details in this PDF document.

In addition, the IDEA implementation I wrote for libgcrypt / gnupg back in 2006 has finally been included into the main codebase (with some modifications, mainly by Alon and Ullrich), See [1] and [2].

That comes in addition to the publication of my book on sending secure emails. Is 2012 the year of cryptography for me? I certainly hope it continues to involve a lot of it going forwards as well.

The book itself is, as most I’ve written, prepared in a Document Preparation System called LaTeX. Ok, so the name might bring up some wrong associations, but the fact is, this is quite probably the best environment to write any scientific papers. In addition to having a very nice bibliography system called BibTeX for referencing, it is superior for equations, hence heavily used in particular in scientific academia. This, in addition to being built on the base of the typesetting system TeX, makes it far superior in terms of typesetting matters such as kerning, hyphenations and ligatures, something other writing tools (in particular MS Word) lack completely. As this isn’t supposed to be a LaTeX post, I’ll just stop there and refer to wikipedia and wikibooks.org for more advantages to the curious.

But where greatness ends, trouble arise. As LaTeX is a typesetting system, it is naturally page oriented to either a book or an article format (in addition to other document classes). The Amazon Kindle format, as well as ePub and other generic formats, are on the other hand flow-oriented. That means that line-breaks and handling of hyphenations, that you would normally leave to the typesetter, is handled by the device on-the-run. Due to the limited capacity for resources, and the nature of the flow rendering (in page oriented it doesn’t matter if creating the initial page takes some time, as it will only be done once (write-one-read-many)), the instruction set for flow-oriented documents is more limited.

The underlying format used for these devices is actually the same as used on this website (and any other), HTML (or for the prudent reader, the XML based counterpart XHTML with a subset of CSS). Ok, lets take a stop here. HTML was something I have used to mark up text for what is approaching two decades way too quickly. The simplified nature of it also means that the author is losing a lot of control of how things are viewed, but have to depend on proper formatting by the various devices on the market.

Accepting that I won’t get things as pretty in the Kindle version compared to the PDF I, never the less, continue the conversion process from my .tex source files to the kindle format. First step using LaTexML. At this stage, however, I realize that a lot of the nice packages I’ve used while creating my PDF files, is incompatible with this tool, resulting in a need for defining various dummy commands and post-processing of the output HTML file, both automatically and manually before importing it in the eBook Creator. The sad thing actually is, that for an author that mainly expect to publish using digital media, it is far beneficial to just stay away from more advanced tools and write the HTML by hand, just as we did back in the mid 1990s when first introduced to the Internet. Truly an impressive progress….

An increasing number of the eBooks that are distributed are prepared by lay-men, and the automatic tools for conversion by Amazon is more targeted towards Microsoft Word documents than anything else. But hey, it boost the available products and is cheap for the distributors, so I would probably do the same if I were them, but I still consider it a shame.

In any case, while I’m contemplating other (fiction-related) projects for 2012, at least I’ve gotten around to testing the system a bit and made my first book available at both Amazon Kindle (eBook) and a printed version (certainly no surprise that I’m most satisfied regarding the printed version).

Happy New Years! (and feel free to visit my page on amazon.com)

As Year end draws nearer, the worry is the main positive for 2011 is it’s looking likely to be a whole lot better than 2012…

There is nothing that would indicate the volatility to decrease in 2012. What has changed, however, is the psychology of it all. It is amazing what people, and then in particular market participants, can get used to. An equity index move of 3-5 per cent points is now nearly to consider normal, and at least don’t prompt too much attention. The investors are also a different breed, and trying to learn to take advantage of the volatility to increase earnings, and act counter-cyclically to take advantages of dips in the market.

For the Fixed Income space, the phrases regulatory risk, execution risk and event risk has truly been experienced, and players are adapting to expect to wait for windows for proper transactions depending on the surroundings.

All of this is likely to continue, and the world is bracing for outcome of a break-up of the European monetary union. This coming week the International Swaps and Derivatives Association will hold a webcast with its members next week to discuss what would happen to euro-denominated derivatives contracts in the event of one or more countries leaving the euro zone.

Personally I’m not expecting a full-fledged break-up of the union within 2012 where the Euro completely cease to exist, resulting in a dependence on Lex Monetae for interpretations of contracts, but I do consider it likely to have one or several countries seceding the euro-zone and getting a New National Currency (NNC), which can result in interesting contractual effects and monetary flow control (prohibition of exporting hard cash from a country can result in a foreign governed contract not being enforceable still)

If nothing else 2012 looks to become a very interesting year – but not a year for the weak minded.

The risks to the economy still remains high, but long-term there should be support in possible inflationary pressure (lets be real, the governments needs inflation to get out of the debt crisis) and a possible QE3 (depreciation in USD can only help the US) could contribute to equity buying.

Standard & Poor’s Friday said in a report that for issuers rated at Greece’s level, single-B, a “voluntary” debt exchange would likely be default if creditors received securities with terms less favorable than are available in the secondary market. With 10-year Greek debt yielding 15% in the secondary market and two-year debt yielding over 20%, that is almost certain to be the case under the exchange process planned by euro-zone governments.

At the same time EU politicians are stating that

* DJ Deal Will Avoid Greek Credit Event But Not Necessarily Ratings Downgrade – Officials

Or looking more closely at the article:

“The ECB has opposed more coercive measures aimed at getting Greece’s private-creditors to continue providing financing for the country starting in 2012. But the debt-exchange process envisioned by the governments won’t rewrite existing bond contracts or trigger a credit event, the officials said, partly easing the ECB’s concerns that private-creditors would be forced to contribute financing.”

CDSes are normally written under the ISDA Master Agreement (International Swaps and Derivatives Association) , in which a credit event follows in the situations

• reference entity bankruptcy
• failure to pay,
• obligation acceleration,
• repudiation (When one party refuses to honor its terms in a loan contract. )
• moratorium. 

If we make a note of the S&P statement, voluntary is enclosed in quotes. I suspect this is based on the amount of incentives involved for the current bondholders to participate on a “voluntary” basis. One example of such an incentive would be

The governments are also looking to the European Central Bank to encourage the exchange offer by accepting the new Greek bonds as collateral for lending while refusing to accept the old ones, the officials said.

The argument would then be, if enough (too many) incentives are given to participate on a voluntary basis, it would be a de-facto obligation acceleration and as such constitute a credit event.

Now that prompts the following question from my side. If something would qualify as a credit event for a B rated issuer (and keep in mind the debt has already been down-notched substantially), but could be avoided if the rating agencies further downgrade the rating on a post-hoc basis, as can be inferred from the politicians suggestion. Are they really making a mockery of the CDS market? If this is the situation a credit event would “never” be a reality for sovereign bonds.

Can we really have a situation where that would not happen if the rating agencies would further downgrade the issuer after the fact?

DJ New Greek Plan Would Include Increased External Funding -Reuters
DJ EU Agrees In Principle On New Greek Plan -Reuters
DJ New Greek Plan Would Run 3 Years -Reuters

What I did not expect was for it to be so quick, and the reason why? EU Commission denies the whole thing

Click image for full size

Ended up as one of my definite better trades lately, so a great thanks to the commission.

Click for larger image

EURUSD is currently trading below the option barrier around 1.45 after having enjoyed a revival over the past two weeks (circled), as the sentiment towards the Greek situation has improved. In my opinion, however, the peripheral EUR situation is still so vulnerable (Portugal avaiting a general election shortly isn’t exactly helping) that I expect a reversal of the past few week’s gain, down towards the 1.40 – 1.41 area (38.20 fibb level at 1.4144 and 100 dma at 1.4061).

The uncertainties regarding the peripherals in the eurozone, as well as increasing signals of weaker growth in the economies still support an underweight in equities. This is further supported by expectations of rate hikes which should make bonds increasingly attractive, and could reduce liquidity flowing into equities. In the current yield environment, however, the credit spreads found for higher rated debt instruments supports investments in Floating Rate Notes rather than bonds or equities.

In support of buying OSEBX we have a rising 200 daily moving average, currently at 417 (roughly 4.5 per. cent. down from today’s close) which could prove a resistance level. But the risks in the economy in my opinion still provide a poor Risk/Reward.

Updated technical analysis of OSEBX:

For those who haven’t gotten to know this project, yet, I started it in 2006 when the former random.sks.keyserver.penguin.de round-robin pool by Bjoern Buerger went offline. The SKS Keyservers provide the public key component / certificates in the Web of Trust of which OpenPGP (“Pretty Good Privacy”) is based on. The whole framework is used in order to facilitate digitally signed and encrypted email messages.

In an environment where the governments implement schemes such as the Data Retention Directive (EU), and documentation shows that US used its Echelon surveillance network to promote Boeing’s business (in 1994), one can’t stress the importance of encryption enough. But even for those who don’t feel this need, email is becoming an increasingly important method of communication – and without digital signatures, anyone can spoof an email address. Despite this, surprisingly few have decided to invest any time or effort into securing their digital communication.

That was also the reason for me starting to write my still un-published book in 2008, Sending Emails The Safe Way. I started this with the intention of convincing more people about the necessity and teaching them about the various elements related to proper security. The more I wrote, however, I noticed that my writing got more technical and in the end I concluded that the book was not suitable for the intended task, but was rather aimed at system administrators. Realizing this I never got around to finished the book. However, the parts I wrote during a couple very interesting weeks can nevertheless be downloaded in PDF format. By now all but the cryptography theory and history is outdated, including quite a few of the references found in the footnotes, so any new effort at writing something on the subject would be from scratch. Based on the adoption rate of the technology, it sure seems necessary.

Next year’s season is approaching rapidly and I’ve already secured tickets for

• Die Zauberflöte by Wolfgang Amadeus Mozart
• Macbeth by Guiseppe Verdi
• La Boheme by Giacomo Puccini
• Tristan and Isolde by Richard Wagner
• Den fjerde nattevakt (The fourth nightwatchman) by Gisle Kverndokk and Ivar Tindberg
• Aida by Guiseppe Verdi

Should be a nice season indeed

(click image for full size)

I personally consider this index to be overbought, and with the uncertainty that surrounds the equity markets alongside what looks to be a reduced risk of inflation for the time being, at least myself have already allocated my personal portfolio out of equities into short-term money-market instruments.