Sunday, November 23, 2014 06:11am
North Adams, MA now: 36 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
The Independent Investor: Cyber Attacks: Who Is On The Frontline?
By Bill Schmick On: 04:56PM / Thursday May 10, 2012
Important
2
Interesting
2
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0
John McClane (Bruce Willis): Hey, what's a fire sale?

Matt Farrell (Justin Long): It's a three-step ... it's a three-step systematic attack on the entire national infrastructure. Okay, step one: take out all the transportation. Step two: the financial base and telecoms. Step three: You get rid of all the utilities. Gas, water, electric, nuclear. Pretty much anything that's run by computers which... which today is almost everything. So that's why they call it a fire sale, because everything must go."

'Live Free or Die Hard'


There is a war being waged today in this country, one that could have severe repercussions for each and every one of us. It is costing us billions of dollars a year and yet neither business nor government wants to spend the money necessary to fight back.

This week on Capitol Hill lawmakers are getting down to debating the pros and cons of passing one of several versions of a cyber-security bill. Everyone hopes the eventual legislation will launch a counterattack on an army of highly sophisticated hackers bent on some serious mayhem. The debate boils down to who is going to pay for a defense system that will prevent the bad guys from accomplishing a "fire sale," a la the last "Die Hard" film.

The Obama administration backs a Senate bill sponsored by Sens. Joe Lieberman, I-Conn., and Susan Collins, R-Maine, that would implement new rigorous standards and require companies to notify the government when their networks have been breached. The business community opposes it as just more intrusion into the private sector that will mean more costly regulations on top of more regulation. Instead, they would prefer a bill promoted by Sen. John McCain, R-Ariz., which wants the government to issue alerts about imminent cyberattacks but would not require a company from acting on the information unless they thought it was a threat to their business.

Unlike other wars the United States has fought, this one is on our territory and the frontline troops are increasingly the IT departments of American corporations. To date, those troops have been both outnumbered and outfought by the enemy. The rates of infiltration by organized gangs or state-sponsored hackers are escalating. In a multinational study by the Center for Strategic and International Studies, the three countries ranked as most vulnerable to attacks were the U.S., Russia and China, while the biggest potential source of attacks was our own country.

Today, we only hear of the biggest cyber-attacks such as the 2011 theft of over 200,000 customer names, account numbers and contact details from Citigroup or the 100 million accounts pilfered from Sony Online Entertainment's PlayStation Network. I was on the receiving end of the Citigroup theft, and believe me, it drives home the danger like nothing else.

These attacks are costing American companies big money. It costs on average over $7.2 million in costs (lost business, legal defense and compliance) or $214 per customer record in costs. If it is a first time breach, it can cost 30 percent more, not to mention the inconvenience to its customers like me. Yet, the real danger is not in the consumer sector. It is in the potential for a breach in the nation's infrastructure system.

As you read this, for example, our natural gas pipeline companies are currently battling a major cyber-attack from a single source, which was launched in December 2011. Don't dismiss this threat. As early as 1982, the CIA managed to blow up a Siberian gas pipeline by using what was called a "logic bomb" involving the insertion of a portion of code into a Russian computer system overseeing the pipeline.

Those involved in cyber security worry that our infrastructure companies (power, water, nuclear, etc.) do not realize how vulnerable their systems are to outside invasion. Computer systems and safeguards that were originally installed years ago are out-of-date. But managements are loathed to upgrade their systems simply on a bet that someday, maybe, their company might be targeted by hackers. It is a persuasive argument since to safeguard a company against all possible dangers — earthquakes, tornados, floods, nuclear fallout, to name a few — would be cost prohibitive.

On the other hand, no one wants another 9/11. Maintaining a head-in-the-sand attitude until something happens is just the kind of strategy that has organizations such as Homeland Security experiencing perpetual nightmares. It is a tough one but somewhere in the debate lurks a compromise. I just hope we can find it.

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at (toll free) or email him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.




0 Comments
     
News Headlines
Louison House 25th Anniversary Fetes Namesake
New Clark Exhibit Marries Contemporary, Traditional Art
Adams Hires New Town Administrator From Maine
Clarksburg Considers Two Possible Solar Arrays
Pittsfield Schools Grapple With Enrollment Drop
Williamstown-Lanesborough Tri-District Picks Interim Superintendent
Williams Volleyball Falls in NCAAs, Women's Basketball, Hockey Win
Mt. Greylock Announces First Quarter Honor Roll
Friends of St. Mary's Tour Endangered Pittsfield Church
Luma's and New Creperie May Open in North Adams

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (151)
Independent Investor (204)
Archives:
November 2014 (3)
November 2013 (3)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
March 2014 (6)
February 2014 (6)
January 2014 (8)
December 2013 (8)
Tags:
Stock Market Economy Interest Rates Fiscal Cliff Debt Ceiling Housing Europe Rally Fed Markets Bailout Crisis Debt Commodities Election Energy Federal Reserve Japan Stimulus Europe Oil Taxes Euro Jobs Selloff Stocks Banks Metals Deficit Congress Recession Pullback Retirement Greece Currency
Popular Entries:
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: The Pipeline Made Simple
@theMarket: Markets Are in Half Time
The Independent Investor: U.S. and China Square Off
The Independent Investor: Workers Get to Save More in 2015
@theMarket: All Clear
The Independent Investor: The Elephant in the Room
@theMarket: So far, So Good
The Independent Investor: OPEC's Oil Ploy
@theMarket: Are We There Yet?
The Independent Investor: Why Is This Recovery Different?


View All
Wizards at Hoosac Valley
The Harlem Wizards faced off against Hoosac Valley staff...
St. Mary's Church Tour in...
Residents, business people, elected officials and Friends...
Williamstown's Mather House...
Traffic came to halt for several hours Wednesday morning as...
Girls Soccer: Nipmuc vs...
Although the Wahconah girls' season ended on Tuesday, its...
Boys Soccer: Belchertown vs...
Belchertown Downs Mount Greylock Boys in PKs
Football: Pittsfield vs...
Shade himself ended up taking it in from the 1 on third and...
Football: Turners Falls vs...
After completing the first-ever undefeated regular season...
Festival of Trees 2014
The Berkshire Museum kicked off its Festival of Trees...
Farmers' & Artisans' Harvest...
organic and handcrafted goods were sold at the special...
Football: Agawam vs Wahconah
The Wahconah football team was down eight points heading...
Girls Soccer: Granby vs...
Wahconah girls soccer over Granby, 1-0, for WMass Div. III...
Girls Soccer: Lee vs Gateway
The No.3 Lee Wildcats fell to No. 2 Gateway 4-0 Wednesday...
Girls Soccer: Sabis vs...
After coach Pat West called a timeout with 3 minutes, 19...
Hopkins Stops Lenox Boys in...
After getting through the rugged Berkshire County North...
Kershaw, Hirsch Lead Mount...
Down a goal midway through the first half of their Western...
Pittsfield Veterans Day 2014
Pittsfield observed Veterans Day with a parade and...
Wizards at Hoosac Valley
The Harlem Wizards faced off against Hoosac Valley staff...
St. Mary's Church Tour in...
Residents, business people, elected officials and Friends...
Williamstown's Mather House...
Traffic came to halt for several hours Wednesday morning as...
Girls Soccer: Nipmuc vs...
Although the Wahconah girls' season ended on Tuesday, its...
Boys Soccer: Belchertown vs...
Belchertown Downs Mount Greylock Boys in PKs
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved