Mish's Global Economic Trend Analysis

"Regin" World's Most Advanced Cyber Snoop Hits Russia, 4 Other Countries; Western Intelligence Agency Likely Responsible

Posted: 23 Nov 2014 09:18 PM PST

Telecom companies in Russia and Saudi Arabia have been hit by the world's most sophisticated hacking software to date.

Symantec believes a Western intelligence agency is responsible.

Please consider World's Most Advanced Hacking Spyware Let Loose

A cyber snooping operation reminiscent of the Stuxnet worm and billed as the world's most sophisticated computer malware is targeting Russian and Saudi Arabian telecoms companies.

Cyber security company Symantec said the malware, called "Regin", is probably run by a western intelligence agency and in some respects is more advanced in engineering terms than Stuxnet, which was developed by US and Israel government hackers in 2010 to target the Iranian nuclear programme.

The discovery of the latest hacking software comes as the head of Kaspersky Labs, the Russian company that helped uncover Stuxnet, told the Financial Times that criminals are now also hacking industrial control systems for financial gain.

"Nothing else comes close to this . . . nothing else we look at compares," said Orla Cox, director of security response at Symantec, who described Regin as one of the most "extraordinary" pieces of hacking software developed, and probably "months or years in the making".

Symantec said it was not yet clear how Regin infected systems but it had been deployed against internet service providers and telecoms companies mainly in Russia and Saudi Arabia as well as Mexico, Ireland and Iran.

The security software group said Regin could be customised to target different organisations and had hacked Microsoft email exchange servers and mobile phone conversations on major international networks.

"We are probably looking at some sort of western agency," Ms Cox said. "Sometimes there is virtually nothing left behind – no clues. Sometimes an infection can disappear completely almost as soon as you start looking at it, it's gone. That shows you what you are dealing with."

Do Dirty Work Then Leave

The software somehow attaches itself, does the dirty work of stealing files or whatever, then vanished without much of a trace, apparently deleting its presence.

It's unknown who did this but I side with Symantec, more specifically willing to suggest the NSA.

Whether or not my suspicions are correct, it's no wonder people want encryption that no one can beat.

Regardless who is responsible, I cheer developments like this development courtesy of Harvard and MIT students: Easy to Use Email So Secure NSA Cannot Break It; What About NSA Other Attacks?

This is what it had to come down to. Government nonsensically spying on everyone led to a more-secure service that freedom lovers and criminals alike will embrace.

By the way, the encryption might be secure, but that will not stop the NSA from hijacking entire computers.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Wrong Three Ways: Europe Not at Risk of Full-Blown Deflation Says ECB Vice President

Posted: 23 Nov 2014 10:54 AM PST

Statements from various high-ranking central bank officials prove they are totally clueless.

For example, please consider an announcement today by European Central Bank (ECB) Vice President Vitor Constancio: Europe not at risk of full-blown deflation.

During a debate in central Italy, Constancio said he did not think "that in Europe there is the risk of falling into full deflation" because nominal salaries would have to fall in all member countries "and this cannot happen".

Cannot Happen?!

One really has to wonder about what is in these central banker's heads. Constancio is wrong at least three ways.

Wrong Three Ways

Even if nominal wages and salaries rise, consumers can choose to deleverage, paying down debt, rather than spend.
It is not impossible for aggregate wages and salaries to drop in all or nearly all member countries, and indeed I expect just that when the European recession hits Germany.
Advantage of inflation grossly misstated.

1. Can consumers choose to deleverage rather than spend? Sure, why not? Demographically speaking, Europe is in such bad shape, one might even expect just that.

2. Europe is clearly flirting with recession (see France Private Sector Output Drops 7th Consecutive Month, Orders Stagnate in Germany, Eurozone Flirts With Contraction).

And in a European recession, one would normally expect aggregate wages and salaries to drop in all (or nearly all) member countries. Parts of Europe are already in deflation and recession. All it takes is Germany to join the party and it will be deflation across the board.

3. Inflation isn't all that it's cracked up to be.

Consider Nominal Wages vs. Real Wages Japanese Style as depicted by Japan's Ministry of Health, Labour and Welfare.

.

Is it possible for prices to rise more than wages? Certainly. Especially if the ECB gets it inane wish of trashing the euro to create inflation.

Bear in mind that "real" does not include the effect of tax hikes. If Europe embarks on a plan to hike taxes, one might expect similar results as recently happened in Japan (See Abe Makes "Grave Grave" Decision to Delay Tax Hike, Gambles on Snap Elections, Seeks "Better Ideas")

Japan is out of deflation, but consumers are far worse off. All Japan has to show for its decades-long effort is debt approaching 250% of GDP.

The statement by Constancio was so superficial, and so wrong, in so many ways, one might wonder if it was purposeful misguidance or if he is really that much of a blockhead.

I suggest the latter.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Economy News

23.11.14

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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