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Sunday, November 08, 2009

Terrorists and Hackers? Or Amateurs?

The November 8 edition of 60 Minutes included a sensational story on the state of cybercrime and cyberterrorism in the world and our preparedness for it.


The story had some examples of a theoretical test in which a generator at an electrical facility had its control systems altered in ways which destabilized and burned up the generator and an actual attack that caused a complete power outage for two days in Brazil.

More disconcerting were the examples of ATM network hacking and financial network hacking. In one case, hackers working from three different locations (China? Russia? The Americas?) worked together over two days to steal --- are you sitting down? -- ten million dollars.


Wow. Ten million dollars.

Ten million dollars is a rounding error on the amounts stolen from world financial institutions by CEOs, executives and board directors entering and leaving the facility by the front door in luxury SUVs and limousines. Bernie Maddoff destroyed $65 billion with a single AS-400 computer that probably didn't even have an Ethernet card in it.

Who do you think is more likely to wipe out your bank account or retirement savings? A teenaged Boris Badanov toiling away somewhere in his mom's basement in a suburb of Kiev? Or a bank executive in Charlotte, NC or Treasury Secretary / regulator in Washington DC? It's no contest. The bank executive and Treasury Secretary have already destroyed TRILLIONS. Or, stated more accurately, they fostered a climate that created TRILLIONS in phantom wealth then subsidized the big boys as they cashed out then stuck everyone else with the worthless debt.

If our country melts down, it won't be because of cyberterrorists and cybercriminals working from unseen basements in remote countries. Our country will melt down because of decades of short term thinking fostered by distorted compensation schemes and corrupt regulators that allowed trillions of phantom profits to generate hundreds of billions in bonuses for those at the top while starving key industries and infrastructure of investment dollars needed to protect the keys to the kingdom.