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Subtle Cyber Attacks Could Tilt Global Economies 51

Posted by Soulskill
from the rounding-fractions-of-cents dept.
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?"
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Subtle Cyber Attacks Could Tilt Global Economies

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  • by unity100 (970058) on Friday February 11, 2011 @05:30PM (#35181214) Homepage Journal
    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.
    • 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 (??) simultaneo
      • by unity100 (970058)
        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.
    • by nedlohs (1335013)

      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 impa

      • 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 massiv

        • by nedlohs (1335013)

          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 int

    • by khallow (566160)
      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.
  • Umm... (Score:5, Insightful)

    by fuzzyfuzzyfungus (1223518) on Friday February 11, 2011 @05:32PM (#35181230) Journal
    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...
    • by cayenne8 (626475)
      Yeah..but this was about the "European Emissions Trading Scheme"....I mean, this carbon trading shit is a scam to begin with.

      I say...more power to someone or a group fucking that up.

    • by Anonymous Coward

      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...

      fuzzyfuzzyfungs, the problem with the "lack of regulation" narrative is that government power is what helped politically connected market actors to screw others. With the pre-crisis regulations in place, connected special interest groups from Wall Street were more easily served. See the government central bank policies, guarantees of certain kinds of debt, government enforced accounting standards regarding risk, various tax incentive programs and government sponsored programs, as well as the massive moral

      • Regulations work (Score:5, Insightful)

        by spun (1352) <loverevolutionary&yahoo,com> on Friday February 11, 2011 @06:20PM (#35181736) Journal

        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.

      • Wow. I didn't even mention regulation or deregulation...
  • by HongPong (226840) <hongpong.hongpong@com> on Friday February 11, 2011 @05:39PM (#35181314) Homepage

    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/ [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.

    • by Anonymous Coward

      You have obviously never traded equities on an open market. Your view is conjecture, based on someone else's flawed opinion of reality. It only seems like there is no 'rationally allocated captial' to you because you don't have any.

  • slowly disrupting and degrading confidence in their entire national economic well-being...

    Ask Ben Bernanke. He seems to be gifted at the latter.

  • 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".

    • by jbezorg (1263978)

      Are you talking about electronic rape rape or just electronic rape?

    • by Anonymous Coward

      Stocks and commodities markets are not Ponzi schemes, you just don't get it. Here is an example to help you understand: You sell your time to your employer for a given amount. Your goal is to prove to your employer that your time is worth more than he offers, He counters your offer assuming that he can get the same thing for a better price. Sometimes you win, sometimes you lose, and vice-versa. Meanwhile, "rape" means more than forcing someone to have sex against their will, and even in that context i

  • by Animats (122034) on Friday February 11, 2011 @05:53PM (#35181474) Homepage

    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.

    • by khallow (566160)

      We need a backup plan for a "slow exchange".

      We already have the much better example of the old pre-electronic stock exchanges. You can do a lot better than one round of trading an hour.

    • by Anonymous Coward

      You already have to wait three days to 'redeem' your funds. At least in the US. Forcing markets to trade at given intervals wouldn't make anything any better, rather open them to predictability, which in turn would make them more susceptible to attacks.

  • 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)
  • by Dogtanian (588974) on Friday February 11, 2011 @06:58PM (#35182120) Homepage
    "We're All Missing the Point on Computer Security" [everything2.com]

    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.
  • by eepok (545733) on Friday February 11, 2011 @07:08PM (#35182210) Homepage

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

  • Probaly they will avoid the next market crash with their interference.
  • 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?
  • 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.
  • The only people to disrupting the world's economies are the traders in such places as Solomon Brothers [wikipedia.org].

  • ecent cyber-attacks on the European Emissions Trading Scheme shut down that exchange's carbon market just a few weeks ago.

    That's "subtle"?

  • 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."

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