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Subtle Cyber Attacks Could Tilt Global Economies
wiredmikey writes "A subtle, yet powerfully destructive force of electronic attacks may be working slowly and silently to disrupt elements of the world's market-based economies. Recent cyber-attacks on the European Emissions Trading Scheme shut down that exchange's carbon market just a few weeks ago. Along with the fear of lights-out DDoS attacks that has traditionally stalked electronic markets, and logically still does, new types of attacks by subtle manipulation could slowly turn electronic markets on their heads by corrupting their very legitimacy. What's worse? Attacking someone's borders, or slowly disrupting and degrading confidence in their entire national economic well-being?"
stock market has gone way ahead itself, and now has a life on its own, loosely tied to real economy thats going on. money is made there without making any real impact on anything on the economy, money lost. appallingly, when money lost, it affects the economy through morale. when big gains are made, everything goes as it is. not to mention the horrible scam of 2008 and its effects.
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It seems as though, given a little time, the markets do an excellent job of corrupting their own legitimacy, and taking the entire national economic well-being with it. Just ask Iceland, or Ireland, or the US...
Doesn't really matter for the purposes of this argument (that nefarious persons are subtly manipulating the market to sow fear, uncertainty and doubt). If the various markets move enough money, then manipulating the markets can cause problems.
My problem with the supposition that 'hackers' are trying to destabilize western economies by mucking with electronic markets is that it's too uncontrollable - unless you plan on doing something organized like take down the NYSE and the Nippon index (??) simultaneously, simply screwing around ala knocking out the European Carbon Market trading doesn't do a whole lot. Especially in light of the fact that the organizers of said markets seem to be hell bent on destroying everything by themselves.
If you live in a pen with a herd of psychotic rhinoceroses, does the fact that there are angry Jack Russel terriers wandering about make a difference?
Faster! Faster! Faster would be better!
*cough*
Very funny
For justice, we must go to Don Corleone
The majority of stock activity is exactly this electronic noise, it's the rule, not the exception. The whole equities market (and other ones) is a turbo-hyperactive instant messaging system of bid/ask channels and they are all basically crapflooded now at about 60-70% of daily trading volume. The "Carbon Market" is another huge scam handy for passthru moneylaundering & fraud operations. Unknown binaries have been lodged in key NASDAQ systems. The messaging "order flow" is arbitrarily frontrun (i.e. man in the middle message intercept).
The real question is what miserable slice of the activity actually represents rationally allocated capital, rather than this message crapflooding. My fave site for this topic http://zerohedge.com/ consistently nails so many anomalies, flash crashes, order stacking rule loopholes (which bids are bumped off to 'dark pools' under less than optimal logic) etc.
It would be better if there was a 5ms 'quanta' for market prices, at least that would set a minimum time-to-live for price quotes. It becomes less 'rational' as the time horizon asymptotically approaches zero.
--hongpong.com
slowly disrupting and degrading confidence in their entire national economic well-being...
Ask Ben Bernanke. He seems to be gifted at the latter.
Service guarantees Citizenship! Questions Guarantee GITMO.... Amerika Uber Alles!
With cyber attack, you mean the money printing machine of the Federal Reserve?
Flipping a few bits of the banks has tilted the economy of the US a lot.
Not even close.
While there are similarities (helplessness, humiliation, ...) between an electronic attack like identity theft and assault by an invading army, most of us are already assaulted in that way by the sanctioned Ponzi schemes called the stock/commodities markets.
No woman has ever had her body literally ripped into by an electronic "invader".
I'd argue the opposite. When money is made it gives a false impression of the well being of the economy and hence that morale you talk about is too high and we get huge bubbles that self sustain for a little while. Then some trigger causes people to notice it's all fantasy and it comes tumbling down - which resets morale back to being in line with the actual state of the economy.
So that "making money" part has a huge impact on the economy, it screws it up completely. The "losing money" part also has an impact but for the good - it restores some sanity (though of course it hurts). Well unless the government socialises the losses then it also screws over the economy on the way down - double the fun!
markets are already being exploited at all costs by the people in those western economies themselves. to the point of wall street not refraining from a global scam, peddling fake bonds. taking down a stock market for a day to ward off cyber attack is one thing, poisoning the world finance supply with 600 times overvalued, 599 units of fake assets, is another. the latter is not fixable.
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We need a backup plan for a "slow exchange". Something where the price of each stock changes every hour, after an hourly auction. The classic London Gold Fixing and the PJM electricity market work something like that. Such a market wouldn't need that much of an infrastructure, and it would be just enough to maintain liquidity.
This would be hard on exchange-traded funds, so we'd need a rule that, in emergencies, ETFs would be priced daily, like regular funds, and you can redeem them only on a daily basis.
The rules and infrastructure for this should be put in place, with dedicated, hardened computers in several locations idling on standby.
What's worse? Attacking someone's borders, or slowly disrupting and degrading confidence in their entire national economic well-being?
Given that we already have the latter (it's called "conservatism"), I'd say it's way worse. At least the people attacking the borders wouldn't insist on being smug pricks the whole time.
The true subtle force here is the Internet and all of its ramifications. Concepts like "European Emissions Trading Scheme" and "Egyptian Government" have yet to come to terms with it. It gives the ability to groups of people to create ad-hoc organizations that may or may not have more power than the established organizations. Welcome to the new global consciousness.
People's economic well-being is much more important than government borders. Government borders are just lines on a map, created by territorial monopolies of law enforcement and defense. This is in contrast to voluntary markets, which while they aren't perfect, provide pretty much all of people's prosperity.
about the Cyber Attackers: "Bad sportsmanship. A ruthless minority of people seem to have forgotten good old-fashioned virtues. They just can't stand seeing the other fellow win. If these people would just play the game... " - Brazil (Somewhere in the 20th century)
L'esperienza de questa dolce vita (The experience of this sweet life) - Dante Alighieri, The Divine Comedy
Anonymous coward, the problem is not regulations, it is misuse of regulations. If regulations were a sure-fire way for the rich and powerful to gain and retain control over an economy, they would not be fighting them tooth and nail. But they are. Without regulations, they will do as they please, using market and extra-market forces to corrupt and control the market. With regulations, they may attempt regulatory capture, but they are always at the mercy of an informed and engaged electorate.
They already have power. Regulations do not concentrate power, they distribute it among the electorate rather than concentrating it in the hands of the rich and the ruthless. These ultra-rich would love nothing more than for you to do away with the one thing keeping them in check: government regulation.
If the government is giving power to certain groups, it is up to We, The People to correct that and take back control over our government.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Doesn't look to me like you get what a market is. It's just a place to buy and sell stuff. Stock market is that, hence, stock market is a market. Doesn't matter if it's loosely tied to reality or is a place where scams occur. Being a market doesn't imply only good things happen there.
Translation:
"Don't worry, our economy is fine, it's really the nasty underwear gnomes screwing everything up with their secret tricks.. seriously, nothing to see here.."
Yes "nefarious persons are subtly manipulating the market "
IT"S GOLDMAN SACHS !!!
and yes, they are trying to bring down or own the whole western world
"We're All Missing the Point on Computer Security"
Yep- that article was written ten years back, but it couldn't be more insightful and ahead-of-its-time in the context of this discussion.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
Subtle attacks of any type organized on a large scale can hurt anything.
Probaly they will avoid the next market crash with their interference.
The "Carbon Market" is a scam. The DDoSers have good will.
+1, Very good read.
What's worse? Attacking someone's borders, or slowly disrupting and degrading confidence in their entire national economic well-being?
Attacking someone's borders.
We've got banks operating with completely ineffective oversight, leveraging themselves completely irresponsibly, and when things get ugly everyone gets bailed out for the sake of "The System". What system? No accountability = no system. Did even one bank executive get fired specifically for tanking the market? No, instead most got big bonuses from the bailout money. Think we're better off now, or worse?
War as we knew it was obsolete
Nothing could beat complete denial
- Emily Haines
I'm all for such attacks myself, those 'elements of the market economy' do plenty of harm and are in dire need of some counter-force.
That's a joke, right? Well, if it was a real market, there'd be a reason to care about it.
This is just what we need to get that internet kill switch thing passed!
Recent cyber-attacks on the European Emissions Trading Scheme shut down that exchange's carbon market just a few weeks ago. ...slowly disrupting and degrading confidence in their entire national economic well-being?"
Isn't that the whole purpose of the Carbon credits market?
The only people to disrupting the world's economies are the traders in such places as Solomon Brothers.
Stability is de-stabilising
Hyman Minsky
That's the "normal" business cycle. Coming out of a crisis, conservative projects are put forward, are funded, and succeed. This raises confidence and encourages more leverage. Over time less conservative projects are put forward, leveraged to the hilt. Eventually proposed projects get too shonky and fail, triggering another crisis. And the cycle repeats.
However with each of these smaller cycles, the overall level of debt in the system increased. And over time the economy looked more and more like a massive ponzi scheme. The economy can no longer recover by simply encouraging more leverage since there aren't enough people left who are willing to take on more debt.
09F91102 no, 455FE104 nope, F190A1E8 uh-uh, 7A5F8A09 that's not it, C87294CE no. Ah! 452F6E403CDF10714E41DFAA257D313F.
"If you live in a pen with a herd of psychotic rhinoceroses, does the fact that there are angry Jack Russel terriers wandering about make a difference?"
You can use the dogs to distract the rhinos!
It would be the normal business cycle, except that the government has stepped in and "stopped" the downside part, with the pretty obvious result that the bubble based booms get larger at each step and the next downside is even bigger and hence requires more to "stop" it. And it's getting pretty close to being big enough that it won't be able to "stopped" at which point we get the cumulative downside of all those busts we avoided (well avoided the bulk of) all at once. On the bright side it's going to be interesting to watch...
ecent cyber-attacks on the European Emissions Trading Scheme shut down that exchange's carbon market just a few weeks ago.
That's "subtle"?
The higher the technology, the sharper that two-edged sword.
Aliens from outer space. They’ve been here since before the New Sun. You and I saw them in the Dark. The lights in the sky, remember?
--Sherkaner
When you have a market based on an imaginary construct (Al Gore's book and the the folks at East Anglia U.), it is ripe for any form of fraud. Or, as the English sailor in Holland put it, "That's a funny tasting onion."