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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!
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
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!
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.
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.
"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.
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Subtle attacks of any type organized on a large scale can hurt anything.