Chinese Hackers Stole U.S. Military Secrets

"Cyber exploitation" campaign obtained information relating to 29 weapon systems and 21 areas of cutting-edge research.

Source: 

Mathew J. Schwartz | May 28, 2013 10:55 AM Advanced weapons systems including the F-35 Joint Strike Fighter and V-22 Osprey, as well as cutting-edge military technology relating to satellite communications, directed energy weapons and missile defense, are amongst the designs reportedly stolen by Chinese hackers from U.S. government agencies and defense contractors. Those findings -- first reported by The Washington Post -- were contained in a nonpublic version of a report prepared in January 2013 for the Pentagon. The "Resilient Military Systems and the Advanced Cyber Threat" report was written by the Defense Science Board, which is a committee of civilian experts appointed to advise the Department of Defense.

All told, information relating to 29 weapon systems and 21 areas of different advanced research was reportedly stolen, according to a confidential version of the report. "The scale is shocking," tweeted information security researcher Alan Woodward, who's a professor in the department of computing at the University of Surrey.
[ Learn the latest on the state of enterprise IT security. Read 2013 Strategic Security Survey. ]
"These are all very critical weapons systems, critical to our national security," Mark Stokes, executive director of the Project 2049 Institute, a think tank that focuses on security issues in Asia, told the Post.
A public version of the report that was previously released didn't include the list of compromised weapons systems and technology. They were named in a table titled "Expanded partial list of DoD system designs and technologies compromised via cyber exploitation." Some of the stolen information relating to weapon systems and military technologies -- such as a 2007 hack that compromised F-35 Joint Strike Fighter information -- had been previously disclosed.
The public version of the published report didn't detail when the information was stolen, how much of it was confidential or whether the information had been stolen from U.S. defense contractors or government agencies.
According to Adam Meyers, head of intelligence for security firm Crowdstrike, China's corporate espionage campaign may parallel the country's five-year plan for modernizing its infrastructure, including building out more deep-sea military capabilities, the New Yorker recently reported. To support deep-sea operations, China would be seeking better satellite technology, torpedoes, naval antennas, radar, electromagnetic aircraft launch systems for carriers and a naval ballistic-missile defense system. All of those technologies are included on the Defense Science Board's partial list of stolen weapon systems and technologies.
What's the risk from the information being stolen? Beyond helping China advance its military capabilities more quickly, the stolen information "may impose severe consequences for U.S. forces engaged in combat," according to the publicly released version of the Defense Science Board report, because it might give adversaries an advantage. For example, reports in 2007 suggested that when Israeli warplanes entered Syrian airspace during an air raid, a computer hack -- perhaps aided by a hardcoded backdoor in the radar systems -- was used to temporarily deactivate Syria's entire radar system, thus allowing the warplanes to escape detection.
The sheer quantity of military weapon system information and technology designs that have been stolen by Chinese hackers may be behind the Obama administration's increasingly forceful denouncements of Chinese hacking operations. But some experts on China believe that diplomacy alone won't solve the problem. Last week, the bipartisan Commission on the Theft of American Intellectual Property recommended that Congress authorize businesses to strike back and reclaim stolen data from foreign networks. Last month, meanwhile, Congress pursued economic sanctions by passing a bill barring government purchases of IT equipment from any organization affiliated with China, without prior approval from the FBI.
In other Chinese hacking news, Australian's ABC Television reported Monday -- without citing any sources -- that an information security attack attributed to China had compromised blueprints and physical security information relating to a new $600 million facility being built by Australian Secret Intelligence Service. According to an Australian security expert, the stolen plans would enable spies to more easily know which parts of the facility to monitor, if attempting to track intelligence activities.
Australia's foreign minister, Bob Carr, said the country is "very alive" to information security attacks, but declined to address the alleged Chinese espionage operation, reported the BBC. "I won't comment on matters of intelligence and security for the obvious reason: we don't want to share with the world and potential aggressors what we know about what they might be doing, and how they might be doing it," he said. 

 

When should you start planning?

It's Never Too Soon to Start Planning Your Retirement 

By TOM LAURICELLA

On the long road to retirement, one basic question repeats itself: What should I be doing now?
Of course, there are dozens of more specific questions that flow from retirement planning. And at any point in time, there are the ups and downs of the financial markets to navigate.
But the major themes are, for the most part, variations of that single underlying question.
At an early age, it's about how to get started and build good saving habits. During peak earnings years, it's about maximizing your potential, such as paying down debt and working toward big goals, such as covering future health-care costs. And on the verge of retirement, the questions revolve around your post-retirement income strategy—especially the important decision of when to take Social Security.
Here are some of the big retirement questions, if you're...

...In Your 20s

In the early years of working, retirement seems an eternity away. And for most people, starting salaries don't allow much room for savings. But at this age, now is the time to start building good saving habits and a base from which a nest egg can grow for decades to come.
"It's the power of compounding," says Allan Roth, a Colorado Springs, Colo., financial adviser.
Young savers shouldn't be discouraged by experts saying they need to put upward of 12% of their income away.
"The main thing is getting used to the idea of saving," says Christopher Jones, chief investment officer at which provides investment advice on retirement accounts.
For those working at companies that match employee contributions to a 401(k) plan, "make sure you're at least getting the company match," says Mr. Jones. "Otherwise, you're leaving money on the table and that's just foolish."
And it doesn't take having a company plan or a big pile of money to start saving in a retirement account. and Vanguard Group both offer target-date mutual funds, which invest in a blend of stock and bonds that are tied to a future retirement date, with minimum investments of $1,000.

...In Your 30s and 40s

Let's face it, raising kids, buying and maintaining a home, paying for college—for most folks it's all they can do to keep their heads above water.
But stay disciplined and keep taking advantage of the company match. Mr. Roth recommends taking a portion of any raises and putting that money away for retirement.

...In Your 50s and
Early 60s

For many people, these are peak earning years and potentially a time when the kids are off the household payroll. It's time to make some serious headway on retirement savings and to look at where you stand compared with your objectives.

More

• 'Should I Pay Off the Mortgage?'

A big question to tackle—have you accounted for health-care costs in your savings goals? Whether it's through long-term-care insurance or through simply putting more money away—also known as self-insuring—it's a question that shouldn't be ignored.
The reality is that unless something significantly changes in the way health-care costs for seniors are managed in the U.S., this can be a big number.
Take a married couple age 65. Last year, the Employee Benefit Research Institute calculated that the couple would need at least $163,000 to stand a 50% chance of covering lifetime out-of-pocket health-care expenses, including Medicare and Medigap premiums, and drug expenses. It would take at least $283,000 to up the odds of covering lifetime expenses to 90%.
For some, a bigger salary may lead to greater comfort with borrowing more money. Ignore that temptation and instead seize the opportunity to reduce big debts, such as mortgages and credit cards, so you'll have more flexibility during retirement.
And for anyone over age 50, tax rules allow for increased contributions to 401(k)s and individual retirement accounts.
For 2013, so-called catch-up contributions are allowed to total $5,500 for a traditional IRA. "You can go into power-savings mode," says Maria Bruno, a senior investment analyst at Vanguard's investment strategy department.

...62 or Over

It's time to make some serious decisions and assess what your income streams are going to look like after collecting that final paycheck.
It's more than just figuring out how to make your savings last.
Among the biggest decisions is when to take Social Security benefits. The underlying question, says Ms. Bruno, "is how can I maximize my payout?"
That includes weighing both the levels of retirement benefits when alive and any survivor benefits after the death of a spouse.
It's a complex calculation, says Financial Engines' Mr. Jones. For a couple, when different ages and benefits are considered, there are some 8,000 different choices, Financial Engines figures.
But there are some rules of thumb. Assuming there is a comfortable nest egg, for a single person in good health, it makes sense these days to defer taking Social Security until age 70, says Mr. Jones.
Here's why: For every year you delay taking full benefits, your eventual Social Security payout will go up by as much as 8%.
While there's always the temptation to collect Social Security simply because it's there now, compare that guaranteed increased benefit to any investment available in the markets today.
"It's a screamingly good deal," says Mr. Jones.
For couples, it's preferable that the higher earner delay taking Social Security as long as possible.
Not only will that boost their payouts while alive, but under Social Security's rules, after the death of one spouse, the survivor gets the higher of the two benefits. Read more...

 

 

Business Needs for Foreign Currency

Accounts Payable and Accounts Receivable

Companies purchase raw materials or component parts for the manufacturing of goods. When the transaction is conducted in a currency other than the local currency, risk increases. In order to control the cost of goods sold and reduce the risk, using some form of hedge is necessary.
Companies that buy and sell in a foreign currency will often use a netting effect. The company will maintain a foreign currency account to deposit funds from sales and to withdraw funds to pay for purchases. The repatriation of funds generally results in the form of profits which are converted and transferred to the home office periodically, thus taking advantage of favorable market conditions.

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Interest rates vary widely from country to country. It often makes sense, depending on the cash position of the company, to take an equal and opposite foreign exchange exposure position to complete a transaction at maturity. The company could take out a loan in the amount of a receivable in the foreign currency, convert it to their local currency and use the proceeds from their receivable to pay off their loan. The company may also buy the foreign currency and place it on deposit with a bank to earn interest and use it to pay off the payable at maturity. This action will enable the company to fix the exchange rate and take advantage of favorable investment opportunities.
A buyer and seller may agree contractually to share the exposure risk. They can establish different parameters based on market conditions to control the risk. Parameters can include payment of goods in the local currency, the splitting of the payment in both the buyer’s and seller’s currency, or the inclusion of a price adjustment clause if the exchange rate changes substantially.
The most common means to control exposure risk is to engage in a forward contract either in the form of a purchase or sale of a currency. The forward contract establishes a fixed price to be paid at maturity on the date the contract is executed. The general requirement is a small security deposit to secure the completion of the trade at maturity. Thus the company fixes the price without using capital until the maturity of the contract. The fixing of the price of the foreign exchange contract also allows the company to make a decision today whether to proceed or not based on current rates. The company can then price the product for sale based on the actual cost of the components.

Balance Sheet Hedging

Foreign currency options protect against adverse foreign exchange fluctuations while benefiting from a positive movement in the exchange rate. The trader is provided with the right but not the obligation to buy (call option) or sell (put option) a specific amount of foreign currency at a fixed price within a set period. Protection is provided. If the rates are unfavorable to the trader, he will just exercise the option; should the rates be favorable to the trader, then there is no need to exercise the option. Because of its advantages, this process for a right to buy or sell can be expensive. It is generally used for large denominations. Contingent obligations resulting from long contract negotiations could make this an attractive means of controlling exposure risk.

Acquisition Activity

Acquisitions take time to conclude and are often in large denominations. The evaluation of an acquisition is difficult enough without the worry of foreign exchange rate fluctuations. Options provide a good hedge against rate fluctuations during the negotiation process.

Foreign Exchange Risk Mitigation Techniques/Market Drivers

Market Drivers

Speculative Trading

Political, economic and technical events are the drivers of change in the foreign exchange markets. Having a broad understanding of these factors provides a practical means of forecasting foreign exchange rates. A forecast is static and not constant and therefore must be monitored and adjusted based on market conditions. Some key factors to consider are balance of payment, inflation rates, investor confidence and intervention in the foreign exchange market. Historically businesses purchased foreign currencies to settle trade-related transactions. Today there are many reasons to purchase foreign currencies. Investing in stock markets, the purchase of manufacturing facilities, holding the currency for interest income or speculation and the purchase of bonds are some of the ways investors utilize foreign currency. Markets are now impacted by market makers as they assume a high level of risk by buying and selling in sufficient quantities to affect market prices.

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Balance of Payments

Payments that flow between one country and all other countries determine its balance of payments. It is defined as the sum of the current account, the capital account and the change in official reserves. A current account is considered more short-term in nature while the other two are more long-term.
Balance of Payments = Current Account + Capital Account + Change in Official Reserves

• The current account is the net of all goods and services between the United States and all other countries. The current account is generally the most volatile. The balance of trade between the United States and all other countries determines whether we are a net exporter or importer. Our need for inexpensive goods over what we could buy locally has caused us to become a net importer with a growing trade deficit. The deficit could be a severe problem if dollars were sold in mass quantities to the extent of lowering the value of the dollar itself.
• The capital account is the purchase of our currency or the repatriation of our currency for direct foreign investment in stocks, capital goods, land, etc. Capital goods are holdings other than cash and have to be converted back to cash in order to remove them from the country. This conversion process takes more time and is less volatile than having a current account.
• Official reserves are the holdings by foreign governments in the US dollar. These reserves can be used to stabilize their currency by selling off the dollars and purchasing their local currency, creating an artificial demand and driving the price of their currency up. The impact of this type of selling, which is generally short-term in nature, is done to prevent wide swings in the value of the local currency.

The balance of payments has a significant impact on the value of a currency. While movements in a current account have the biggest impact, they are often balanced by the other two. The United States tries to entice foreign investors to invest in capital goods; in doing so we repatriate some of the dollars back into our country. We also encourage governments to increase their reserves in the United States. The impact of making similar investments in dollars can offset the fluctuations in the current account. It is only when confidence in all three areas is lacking that the United States dollar will decline significantly.

Inflation Rates

Inflation causes the value of local goods to become more expensive, impacting the ability of other countries to buy local goods and services. It makes products less competitive in a free-market economy. Time combined with market conditions will cause the re-establishment of purchasing power parity between two countries.
Purchasing power parity (PPP), as defined by the Swedish economist G. Cassel in 1918, is that natural market conditions will adjust the exchange rates between the domestic currency and any foreign currency to reflect differences in the inflation rates between them, which means there is a direct correlation between the movement of inflation rates between two counties and their respective foreign exchange rates.

Investor Confidence

The typical foreign business model starts with the export of goods. The eventual success will lead to the establishment of a manufacturing plant with local production. Eventually competition, if unchecked, will force the manufacturing costs to go down so that the once- exporter starts importing goods he exported. The ability to follow this model is heavily dependent upon investor confidence. Foreign direct investment is dependent upon political stability, GDP (economic performance) and government deficits. Investors’ expectations are for higher returns with managed risk. Political stability is a key determinant of investor confidence. Civil strife in the form of strikes, riots or civil commotion and expropriations by governments discourage investor confidence and lower the value of a currency. High tax rates, high deficits and poor overall economic performance by a country contribute to poor investor confidence. Investment will return should investors believe that the country is in a recovery mode and these factors will change to their benefits.

Intervention

Trading in foreign exchange can be very risky. There are arbitrageurs that benefit from price differences based on time and place. Their ability to enter and exit the market quickly can create a temporary price differential. Their objective is to make quick profits; this form of derivative trading is considered the most risky. Governments use their ability to intervene in the market to prevent wide swings in their currency. Their ability to utilize their reserves to buy and sell their currency can stabilize the market temporarily providing time to adjust any other market conditions that impact the value of their currency. Governments also determine interest rates, thus creating an investment option that entices capital into the country. These tools are temporary in nature: in order to keep long-term capital in a country, there must be stability without political turmoil.

Doctor of Technology

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The Doctor of Technology (D.Tech.) degree is conferred upon candidates after having completed a course of study in technology, and a project of lengthy duration in a technologically-related field. Like other doctorates, it is an academic degree of the highest level. The doctor of technology program enables graduates to obtain an advanced level of knowledge in specialist fields and aims to produce graduates capable of advancing knowledge within their industry. The degree focuses on developing practical solutions in the workplace, critical analysis, synthesis, and innovation. In South Africa, the D.Tech is equivalent to other research doctorates and normally awarded by Universities of technology. In the United States, the Doctor of Industrial Technology degree is recognized by the U.S. Department of Education and the U.S. National Science Foundation (NSF) as equivalent to the Ph.D. At the British Columbia Institute of Technology, the Doctor of Technology is an honorary degree. In Finland, the degree tekniikan tohtori (Doctor of Science in Technology) is comparable to a Finnish filosofian tohtori (~PhD), except that it is granted by a university of technology. In Sweden the situation is the same and the degrees are called Teknologie doktor or Teknisk doktor (Tekn. Dr. or Tek. Dr.) and are translated to PhD in English. The same can be stated for Austria, where universities of technology grant the title of "Dr.techn." or "Doctor scientiae technicorum" as an equivalent to the PhD. The Doctor of Technology degree may also be awarded as an honorary degree, that is, given to individuals who have made extensive contributions to a particular field and not necessarily for specific academic accomplishments. It is usual to signify this by adding (h.c.) for honoris causa after D.Tech. or to refer to the award as Hon.D.Tech. The Robert Gordon University in Aberdeen, Scotland is one example of an establishment which awards such a degree.

CNN’s Wolf Blitzer asks atheist tornado survivor: ‘Do you thank the lord?’

By Lindsay Jolivet | Daily Buzz

CNN anchor Wolf Blitzer raised an important journalistic lesson this week while he was live on the air, about making assumptions during sensitive interviews.

We've no doubt he'll be happy to elaborate once he's successfully pried his foot out of his mouth.
During an interview on Tuesday with Rebecca Vitsmun, a survivor of the Oklahoma tornado, Blitzer asked her if she thanked the lord for sparing her, her husband and her infant son.
The answer was awkward, though not entirely unpredictable.

International trade and water

Source: Wikipedia

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International trade and water is a term that is used to describe the relationship between international trade and the water being used by humans. The substantial increase in human population during the 20th century combined with rapid increases in overall global economic development has resulted in rising challenges for the future of public water management. The developing world has been particularly impacted by the lack of access to clean water. Each year, millions of people die due to illnesses, diseases, and lack the capital to create the infrastructure necessary to ^[1] These conditions have increased the global demand for clean water and in turn, have pressured free market economists to suggest that wealthy market players are the most efficient solution to addressing water issues.^[2] Several nations stand to benefit from international trade in water. Particularly nations with excess fresh water and abundant capital are looking forward to making healthy profits from either the export of water to other nations, or are interested in the investment returns they will earn from participation in foreign markets. However, not everyone agrees that market forces are best capable of solving water issues. NGO’s, human rights organizations, and various stakeholders oppose viewing water in economic terms. These individuals accuse international trade agreements and international economic institutions including the World Bank and the International Monetary Fund (IMF) of attempting to privatize a resource that they consider a basic human right.^[3] The lack of a common understanding of whether or not water should be viewed as a commodity or a basic human right has resulted in heated debates among legal professionals and leading members of the academia.

combat the problem.

Water as a commodity

Prior to the industrial period, water had been extracted by whichever local community lived around it. As the industrial period progressed however, this view began to be replaced by a more economic oriented approach. Today, most water goes through a complicated industrial process that begins with its extraction and ends in a complicated process involving pipes, dams, and other sorts of unnatural facilities. Even fresh water that is located in rivers and lakes must somehow be extracted. In general these considerations involve the use of land, labor and capital thereby replacing the notion of a common resource into a value based product. Desalinization and desalinization plants play a major role also.

International institutions, international trade agreements and water privatization

In 2000, out of the 40 IMF loans distributed 12 had requirements of partial or full privatization of water supplies.iv Likewise 50 percent of World Bank loans issued in 2002 to developing countries contained a clause that requested privatization of water services.^[4] In addition to international institutions pushing for privatization, trade agreements in the 20th century have also created the legal framework for allowing the sale of water. The GATS, known as the General Agreement on Trade in Services, operates on a list in approach, meaning it allows privatization in areas that the nation has agreed to open to other members. The Doha Development Round of negotiations aims at changing this stature. During these negotiations it was declared that no sector is to be excluded from the negotiations to the new agreement. If water services negotiations succeed then once a member chooses to open their markets to their own private sector, then will have to afford other members the same rights to invest in that sector.^[5] Many regional trade agreements do not have a list in approach and are therefore subject to the same conditions mentioned above. For example, in the US-CAFTA agreement only Costa Rica directly specified that water services were to be excluded from foreign investment the other nations made no similar request.^[6] Due to the mixed results obtained from privatization of water services and the difficulty of reversing that decision, several actors have strongly opposed the export of bulk fresh water. These actors claim that once such an action is allowed to occur then it will establish a precedent of treating water just like any other export. This in turn will become legally binding and irreversible.

International trade and water legal disputes and politics

Canada is one of the largest owners of fresh water and has for years been engaged in a legal dispute over its possession of the resource. In 1990 an American company named Sunbelt was invited by the government of British Columbia to invest in a water exporting operation. Due to setbacks, the contract never matured and Sunbelt sued the government of British Columbia for failing to meet its obligations. After years of battle the Canadian government declared in 1999 that water in its fresh state as those found in rivers and lakes contains no economic value, and is therefore outside the obligations of its trade agreement.^[7] In addition, the government cited article XI of GATT (G). This article allows for the conservation of a natural resource as long as the action taken by the government is done in a non-discriminatory manner. Sunbelt however, disagreed with the applicability of this clause and claimed that Canada’s actions are in direct violation of several international trade agreements. Particularly, Sunbelt addressed Article XI of GATT which forbids a member nation from imposing measures other than taxes, levies and other charges on the export of its good. Likewise, Sunbelt argued that the water located in British Columbia belonged to US companies just as much as it belongs to Canadian companies. This argument is based on Article 11 of NAFTA known as the investment chapter. Once water is extracted from its natural state for whatever reason that same right must be given to foreign investors. Sunbelt argues that Canadian companies had such extractions in the past and therefore opened the door for foreign investors to come in and do likewise.

Turkey-Israel

In 2002, Israel agreed to buy 1.75 billion cubic feet of water from Turkey every year for a period of 20 years.^[8] The method of transport involved the use of large plastic bubbles that would bring the water to the storage facility. In regards to the talks, the foreign minister of Turkey declared that this agreement will increase the cooperation between the two countries and also lead to peace and stability in the Middle East.^[9] Economically Israel concluded that the cost of importing water would be higher than choosing the desalinization option but chose to import anyway. In addition to hoping to achieve peace the foreign minister also mentioned that the landmark agreement turns water into an internationally accepted commodity, and that Turkey hopes to sell water to other countries. Turkey canceled the deal after the Gaza Flotilla Raid by IDF commandos Gaza Flotilla Raid on May 31 2010. During this incident several Turkish nationals were killed by Israeli armed forces.^[10]

UN declaration

In July 2010, the UN General Assembly declared that access to clean water and sanitation is a human right. The assembly did not specify whether a public authority or the private sector would be best capable of providing this right.

See also

• Gaza blockade
• Shared vision planning
• Spragg Bag
• Water law
• Water privatization
• Water trading

Notes

1. ^ (Segerfeldt 2005)
2. ^ (Saefong 2006)
3. ^ (Overbeke 2004)
4. ^ (Public Citizen.org 2002)
5. ^ (Mann 2006)
6. ^ (Mann 2006)
7. ^ (Dr. Isabel Al-Assar 2008)
8. ^ (US Water News Online 2004)
9. ^ (US Water News Online 2004)
10. ^ Israel signs agreement to buy water from Turkey

References

i (Segerfeldt 2005)
ii (Saefong 2006)
iii (Overbeke 2004)
iv (Shiva 2002)
v (Public Citizen.org 2002)
vi (Mann 2006)
vii (Mann 2006)
viii (Dr. Isabel Al-Assar 2008)
ix (US Water News Online 2004)
x (US Water News Online 2004)