Cyber Espionage

Crypto schmypto

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CM is not a fan of crypto currencies. Apart from the fact they are solely backed by greed (when you buy a share or bar of gold you get ownership of  a physical asset in return) there are too many of the damn things. We have approximately 190 fiat currencies in circulation. Of that only a handful trade. US$, GBP, euro, yen, A$, C$ and RMB. After that liquidity goes out the window. Try getting a good rate from the Travelex currency window on Malaysian ringit. If you invest in illiquid coins the same nasty spreads will ruin any thirst for making a fortune

With crypto currencies, there are over 2,000 variants. Bitcoin is the bellwether. It has a net worth of $94 billion. Only a handful of others trade. Many should have realised that when the Japanese started to get all excited over the craze the gig was up. Japanese variety show comedians were responsible for the promotion almost 12 months ago when Bitcoin was at all time highs. Some companies like Rakuten were offering to pay staff  in crypto in lieu of cash salaries.  Now Bitcoin is languishing at 20% of that value.

Take a look at some of the products being invented to become crypto. LivingOffset is a classic case in point. It used Wikipedia as a source for justifying the validity of its findings in its prospectus.  That settles it then. Who wouldn’t buy an asset backed by Wikipedia research?!?

From LivingOffset – “Global concern about climate change is growing rapidly. Five out of every 10 people now consider climate change to be a serious problem. In Chile and Peru the number is over 75%. Interestingly, 69% of Americans are concerned about global warming [if you believe Huff Post], despite their government’s position. There is no doubt demand for our offering is there, and like Airbnb, we can provide the means and the mechanism for easy participation. In just a few minutes ordinary people can start to make a real and meaningful difference.

In January 2017, IPSOS held a global poll asking what each country’s major problem was and climate change didn’t feature a mention.

Apart from the completely bogus stats on ‘69% of Americans being concerned by global warming, SUV sales remain a solid staple in the US. In fact the most popular car in America is the Ford F-150 pick-up truck where customers rank ‘fuel economy’ #28 in terms of reasons they buy it.

Here was the promise at prospectus time around March 2018. The launch was delayed on the basis there was a need to make it more global in appeal. It supposedly launches this month.

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Below lists how some of the other crypto currencies performed overnight. This is before heavy handed legislation has come down to regulate the industry. If you look at a crypto kiosk in Shinbashi, Tokyo you’ll likely see a Rolls-Royce parked out front, presumably owned by someone in the Yakuza. As far as money laundering goes, crypto’s are brilliant.

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In an event, crypto currencies are most at the mercy of cyber fraud. Don’t buy the bomb proof guarantees of blockchain. If state agencies want to destroy these markets, they can do it on a whim. Then again there is little need to do so given the numerous events of hackers breaking into crypto exchanges and costing them huge liabilities l. Coincheck in Japan lost $500mn in one day due to a breach.

In short, crypto is little better than betting on a roulette table. If the benchmark crypto is hemorrhaging like this, why put faith in the illiquid stuff being any better? Fiat currencies may not be good stores of value but there are far more sensible places to protect wealth than parking it in products which are underwritten by nothing more than greed.  If you like a flutter by all means throw some loose change into crypto.

Google’s gaffe only proves the massive opportunity for others

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The publishing of Google’s internal post-election debrief video shouldn’t surprise anyone in the slightest. All the outer appeals to the group’s impartiality were smashed by this leaked video. In a sense Google was the victim of the half-life nature of the very digital media feeds it seeks to control. Even worse it was all the fromage-grande senior management talking about what really goes on. Sunlight is truly the best disinfectant.

Putting the need to respect the “confidential’ nature of the meeting  (it seems employees aren’t all following those protocols) to one side, this video totally backs up the CM piece which spoke of the opportunity to plug the gaping hole in social media.

We shouldn’t forget what this episode makes blatantly clear – how toxic the work environment must be for staff who don’t share the political views of the politburo.

Mark Zuckerberg openly admitted that Silicon Valley is dominated by the far left. Stands to reason only conservatives get blocked, suspended of banned. Poor old #WalkAway activist Brendan Straka was the latest victim. The articulate openly gay hairdresser was suspended for 30 days for highlighting he’d appear on the recently banned InfoWars. Not posting the video.  Just that he’d appear. Talk about the mixed emotions of the Facebook censor who probably required counseling for having to choose partisan politics over LGBT rights?

None of us need a technical overlord determining what they see as fit for us to consume. If it is Icelandic pig racing in winter or dwarf tossing into a mud pool, should demand for it exist and it is legal then who is Google to censor it outside of respecting government mandated maturity ratings??

If Google had half a brain it would publish the “raw” data of trends. Not its selective manipulated subjective view of what it wants to see but what might be driving populism in Europe or the 2016 Trump election victory? If Google had properly recognized the trends it’d have seen for itself the raw power of understanding motivations rather than cast aspersions and skew feeds to support its own narratives. Truth be told it isn’t working. Every person banned (and the hurdle gets lower every time) highlights the agenda based nature of these social media houses. Search impartiality and no social media house should pop up toward the top of the list.

The beauty of social media is that we are free to choose. Switching costs are effectively free. Yet we use Google because it’s the best search engine and there is little in the way of competing product.

Which stands to reason if a social media proposition with more conservative values which didn’t cut off those who didn’t agree with internal biases was built, the servers would probably crash due to the stampede to join it.

Growing numbers of people have become fed up with what they can’t say (even when completely appropriate) on social media. Not bleedingly obvious profanity and senseless racism but reasoned argument. People are also fed up with learning their data has been used without permission to profile them with ads. In all fairness if one openly publishes his/her/xir data on a social platform then there is an expectation that it’s “at risk”.

Still CM has all “location services” switched off yet a social media service asked to rate a Bavarian beer hall CM visited  the very next day. When a help yourself drinks counter in a reception area of a corporate office provided whiskey the ensuing discussion with a fellow delegate brought up his preferred brand – Johnny Walker Blue. The next day were banner ads on that brand on top of unrelated searches. Presumably the mic is being accessed. Or is it a purely freakish coincidence?!?

The market for free speech is being eroded before our very eyes. The big organizations controlling much of our social media are constantly being outed for their double standards. More consumers are not blind to it yet all the while no real alternative exists the social media giants hold all of the aces.

Therein lies the opportunity.  The demand is there. The day a comparable service is offered without big brother controlled censorship the door will be beaten down. Even if we wish to call the actions of Google et al into question we can choose not to use them at any time.

Let Google, FB and Twitter  treat us as mugs.  Let them exercise their questionable moral value sets on us. The more they do, the more they draw the ire of a growing number of  users. An alternative will come and their behaviour will backfire big time. Live by the sword, die by the sword. CM won’t have the slightest sympathy.

The attitude driven by these divine franchises can be felled very quickly. Bring on the alternative ASAP. Then Google execs will really start crying. #biasbackfire

 

NATO – 19 nations may hit 2% promise 18 years after committing to do so

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It is a farce. In 2006, NATO Defence Ministers agreed to commit a minimum of 2% of their Gross Domestic Product (GDP) to defence spending. This guideline, according to NATO,  “principally serves as an indicator of a country’s political will to contribute to the Alliance’s common defence efforts.” In 2017, only 5 of the 28 members outside the US have met the 2% threshold – Greece, Estonia, UK, Romania & Poland in that order. Despite Greece’s economic problems elsewhere, it manages to honour the deal. NATO Secretary General Jens Stoltenberg said “the majority [not all] of allies now have plans to do so by 2024.” 3 more are expected to hit the target in 2018. So for all the good will in the world, is POTUS wrong to call the other 19 members slackers that ride off the US taxpayer when so many of them are only likely to hit the target 18 years after ‘committing’ to it?

NATO commitment in 2017 can be seen as follows.

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Although all credit to the Europeans and Canadians for getting away with it for so long. Previous US presidents have obviously not concerned themselves with getting a fair deal on mutually agreed commitments. Although in what world would American taxpayers be upset to see the rest of the team pick up the slack?

Naturally the media are getting mileage out of the insensitive bully attacking his supposed allies. In fact Stoltenberg said last month on record that, “burden sharing will be a key theme of our summit next month, and I expect all allies to continue their efforts.” He reiterated that to Trump yesterday.

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To be brutally honest, how effective can a NATO force truly be if words aren’t put into action? What good is a promise if it is to be honored 18 years later. Imagine if that is the mindset should NATO be forced to act militarily. Would those meeting their obligations feel within their rights to have a bigger say in how NATO should work?

The problem with such a lack of commitment is that over the 12 years where 23 nations have not come close to meeting their obligations, the sum total of the actual defence capabilities suffers for the duration. The US is 67% of total NATO spend and the UK, France  & Germany make up half of the remainder. Yet building a sustainable capability in defence does not come through half measures or poorly thought out procurement. What is missed on many is that over 70% of defence budgets are allocated to soldier pay, housing, healthcare, training and so forth. Procurement and RDT&E get funded out of the balance. Have a skirmish somewhere and yet more money is chewed out of buying new equipment for the sake of logistics (feeding 10,000 troops and servicing hardware in a foreign land). Then there is the subject of terribly managed procurement programs.

Take the French disaster that is the aircraft carrier Charles De Gaulle. Despite delays because of problems with a retrofit for radiation shields, the naval brass had to add 14 feet of deck because it realized that the E2-C Hawkeye surveillance planes it purchased couldn’t take off and land in its original build spec. Even now the flight deck is not long enough to conduct simultaneous launch and recovery operations. Even worse the blueprints for the CdG‘s propellers had been lost in a fire, which meant that the ship had to be refitted with hand-me down screws from carriers Foch and Clemenceau which meant her speed was cut from 27 knots to about 24 knots—which was unfortunate since her predecessors steamed at 32 knots. Speed to war zones is kind of important to gain a decisive edge. All of the spend to fix poorly thought out designs cuts from being able to procure other equipment and materiel. Scary to think Australia is buying 12 subs from the French! The problems are already revealing themselves despite not one boat having hit the dry dock.

History tells us many things of how NATO type organisations have failed in the past.The Peloponnesian Wars (431BC – 404BC) highlighted how things can change when allies do not keep up commitments and capabilities aren’t maintained.

Athens required her Delian League member states (consisting of city states mainly along the Ionian Sea) to pay tributes (phoros) to the treasury which was used to build and maintain the naval fleet led by Athens. Yet over time the member states relied too much on the wealth of Athens and over the course of the draining war and the costly campaign to Sicily, failed to honour the ever increasing demands to fund the league with the appropriate level of tributes which drove Athens into massive debt. Defence spending by the Athenians had been cut to around 30-60% of the average over the previous decade. The Delian League’s capabilities dwindled as a result and the Spartans, funded by Persia, took advantage of this and crushed it for good, in the very art of war that Athens was renowned for – the navy.

It is not hard to think of Trump feeling like a modern day Pericles. NATO is the Delian League and its projected enemies chip away all the while members dither over commitments, forcing the US to sustain the limited capability. Like the Athenians, the US has the most powerful navy in the world with a fleet bigger than the next 11 countries combined but even it has pared back the number of ships to less than 10% of what it had in WW2. Enhanced capability is one factor in cutting the surface fleet but even the US DoD realised that the conventionally powered US Kitty Hawk consumed 2% of the entire US military fuel bill annually so it was taken out of service to save money.

One can argue the $750 billion annual defence budget is plentiful but the US realises that power projection is an expensive business. Even Japan understands it can’t stay nestled in the bosom of US stationed forces forever without taking a proactive stance to defend itself. That is the same message to the 19 members NATO failing to pull their weight.

Israel to deduct terrorist salaries from PA transfers

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No sooner had Australia announced it would no longer give money directly to the Palestinian Authority (PA) than the Knesset put into law a previous bill that sought to deduct terrorists’ salaries from the roughly $130 million in monthly tax revenues Israel collects on behalf of them. PA President Mahmoud Abbas’ spokesman, Nabil Abu Rudeineh said,

The Palestinian presidency strongly refuses to accept this severe decision, which damages the foundations of the relations since the Oslo Agreement to this day…If this decision is implemented, it will prompt important Palestinian decisions to deal with it.”

How is it that even with the Oslo peace process coming into effect in 1993 that the PLO carried out 4,000 attacks till 1999. The Israelis so desperate (under Ehud Barak of all people) for peace gave the PLO 95% of their territorial demands yet they still kept up the attacks killing more than 1,000 Israelis, a total exceeding the previous 25 years combined. So the foundations of the Oslo Agreement remain flakey at best. 

What Abbas’ spokesman is technically saying is that they openly admit to spending money on terrorist salaries (nothing new) when their very own people want monies to be allocated on services (education, sanitation, water, electricity, healthcare) that benefit the whole. The press doesn’t report the 1,000s of Palestinians treated in Israeli hospitals.

While Israel remains an open, democratic and multi-ethnic society the PA has proven itself to be an intolerant, corrupt and self-serving dictatorship which has little interest in serving its constituents as the comptroller of its first ever audit revealed. International aid money lined the pockets of the leaders of the PLO. The French money laundering authorities discovered that Arafat’s wife’s bank account had amassed $3bn over 20 years. It is ironic that most of the original founders of the PLO didn’t live in the Palestinian Mandate when Israel was created. Arafat was born in Egypt. 

At the time of the founding of the State of Israel in 1948, 90% of Palestinian Arabs lived in Transjordan. At the time there was no movement to create a Palestinian state. It is somewhat ironic that no Arab outrage ensued when Jordan annexed the West Bank (what we know as the occupied territories) in 1950 blatantly disenfranchising the Palestinian Arabs in the process. Even then they never fought for self-determination. In fact it wasn’t until the PLO was first established in 1964, a time the West Bank belonged to Jordan, that they started to pursue it.

The irony of many leaders in Palestine is the blatant hypocrisy. In 2014, during the last conflict, former Hamas leader Ismail Haniyeh sent his daughter across the border to Israel for emergency medical treatment. On what grounds does a father trust his daughter to his mortal enemy to save her? Yahya Sinwar, a prisoner in an Israeli jail for murdering 12 Israelis was given life saving surgery after being diagnosed with cancer. He was released in a prisoner exchange in 2011 and took over from Haniyeh as leader of Hamas yet swears “we will tear out their hearts” of the very people who saved him.

What might have escaped many is that in the last few months terrorists have burnt more than 30,000 dunam (7,400 acres) of land near the border with Gaza. Israel’s honey industry has almost been wiped out. Israel is under pressure to do something to stop such destruction. Iran is the biggest headache for Israel at present. Despite digital diplomacy, the last thing the country wants to invite is a conflict with Iran-backed Hamas.

However do not be surprised if some skirmish kicks off on the border in coming months to contain the fire bombing of farmland. It will have nothing to do with cutting out payments to terrorists and martyrs although don’t be surprised if that pretext is used.

Israelis truly want peace. Yet the PA will only accept one which requires the destruction of the Jewish state. Ask yourself whether you would sign an agreement with that as a clause? Exactly.  Even Saudi Arabia’s crown prince, Mohammed bin Salman, said several months ago,

In the last several decades, the Palestinian leadership has missed one opportunity after the other and rejected all the peace proposals it was given…It is about time the Palestinians take the proposals and agree to come to the table or shut up.”

Scary

Scary. Two computers. No connecting wires or WiFi connection. Transferring commands by heat. Another day at Ben Gurion University! Thank God they’re only toy missiles

How cyber (in)secure is civil aviation?

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If you have a spare 15 minutes it is worth looking at the Israel Aerospace Industries (IAI) video presentation on the state of cyber within the civil aerospace industry. It is not all bad but there is a real need to step up investment to guard against ever more sophisticated attacks. Cyber used effectively can thwart attackers but so many systems within airports are connected – passenger data, baggage handling, airport security. Air Traffic Control (ATC) can be hacked with ghost planes by spoofing messages and pretending the hacker is airborne.

IATA predicts that the number of passengers travelling by plane is set to double by 2035. In the IATA 2017 Annual Report it notes,

In 2016 some 3.8 billion passengers safely took to the air and some 54.9 million tonnes of goods were delivered as air cargo… There was one major accident for every 2.56 million flights using jet aircraft in 2016. While this was a slight step back on the five-year average (one accident for every 2.77 million flights), flying remains the safest form of long-distance travel…Aviation’s importance goes far beyond the 63 million jobs and $2.7 trillion in economic activity that it supports. 

There is no question the quality and advancement of hardware technologies in aerospace has been a large factor in improving safety. Whether the use of carbon fibre composites in fuselages and wings or the growth in ceramic matrix composites in engines to allow higher temps in the engine to raise fuel economy and reduce emissions. If we think that getting drugs approved by the FDA is hard, getting hardware approved by the FAA is even more difficult. A drug can cause side effects. A plane can’t afford to have any problems for the life of it, usually 25 years or more.

Software (e.g. TCAS, automated landing) has played no small part in enhancing safety but providing adequate protection to ensure systems function as intended is the weakest link. As the speaker says in this video, “we need to collaborate“.

We can’t afford to wait for the first aircraft to go down by such cyber attack means before we act. Remember post 9/11 that impregnable cockpit doors were made mandatory. The doors also allowed the pilots to prevent activation of the entry code to prevent would be hijackers from entering by taking a stewardess hostage. In March 2015 a Germanwings co-pilot Andreas Lubitz, activated this function when his pilot took a restroom break  to commit suicide along with 150 passengers. The activation codes used by the pilot did not work. Technology can sometimes have unforeseen consequences.

Slightly off topic, though no less important, alcoholism and flying is also an issue. The FAA sites, a minimum “8 hours from “bottle to throttle.”” Between 2010 and 2015, FAA records show 64 pilots in the US were cited for violating the alcohol and drug provisions, and in 2015, some 1,546 personnel who must ensure airline safety, including 38 pilots, tested positive for one or more of five illegal drugs. In India, between 2011 and 2016, a total of 188 pilots across the country were found to have high blood alcohol levels during checks.

The Plane Truth

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The plain (plane?) truth is that commercuial airlines face a growing risk of cyber attacks. It is a frightening prospect. Airline safety has never been better from an aeronautics perspective. Yet more pilots are switching to iPads to access airport information including runway approaches. No more need for heavy paper flight maps. Cockpits are digital. Air to ground links open up vulnerabilities which could allow nefarious actors to place an aircraft at the wrong height, even if the display tells otherwise.

Think of how politicians or high value targets could be assassinated this way. Hackers could dump the fuel, while sending normal consumption data to the pilots. The black box would record all the conflicting data. Who needs to take a bomb onboard? It could be made to look like an accident. The cockpit voice recorder could be switched off by remote leaving the investigators precious little to go on. The Israeli National Cyber Directive views this as a growing risk.

After a week of visiting Israel’s best cyber companies, many staffed with former members and leaders of the elite military cyber unit 8200, solutions will be found but the game is growing riskier by the day. The lack of adequate protection is evident. The live hacks (from low level amateurs to state sponsored) we were witness to show just how naked so many businesses and government agencies are. The access points to hack are also exposed by the fact less than 1% of people have security on the hand held devices they make so many decisions from.