DCNS Web site

DCNS Web site

Get used to another term in world of computer hacking: “economic warfare.”

A French firm building multi-billion-dollar submarines for Australia and several other nations says it was the victim of economic warfare after some of its schematics for similar subs being built for India were released online, allegedly by hackers.   The data was published by Australian media

The firm, DCNS, is currently bidding for military contracts in Poland and Norway. For the India gig, it had beaten out German and Japanese firms.

An embarrassing data leak would obviously hurt the French firm’s bid for more deals — in addition to perhaps imperiling the security of its current projects.

“DCNS has been made aware of articles published in the Australian press related to the leakage of sensitive data about Indian Scorpene,” the firm said on its website. “This serious matter is thoroughly investigated by the proper French national authorities for Defense Security. This investigation will determine the exact nature of the leaked documents, the potential damages to DCNS customers as well as the responsibilities for this leakage.”

Right now, there’s only speculation about how much the allegedly stolen data might impact the security of the ships when they arrive in India — and the security of similar DCNS ships in Malaysia and Chile.

But DCNS immediately suggested that rivals might be to blame for the leak.

“Competition is getting tougher and tougher, and all means can be used in this context,” a company spokesperson said to Reuters. “There is India, Australia and other prospects, and other countries could raise legitimate questions over DCNS. It’s part of the tools in economic warfare.”

It’s clearly too early to know, however, if simple corporate espionage is to blame — or there might be some military advantage to be gained from publication of the documents.  Given that the alleged hackers send the data to a media outlet, it’s also possible their motivation was political.

The incident does highlight the asymmetrical nature of digital “warfare,” however.  A billion-dollar project involving thousands of employees can be derailed by a single person with a digital file and a the e-mail address of a journalist.

“If this was economic warfare as speculated, we can expect more attacks like this on a global scale,” said Scott Gordon, COO at file security firm FinalCode. “Hacktivists are motivated by reputational, economic and political gains from capitalizing on businesses’ and countries’ inability to secure sensitive, critical documents— tipping the scale in favor of other contenders in future military action and contracting situations.”

It also shows how hard it is to keep data under wraps when multiple third-party contractors have to share information in large projects.

“Sharing files, such as the 22,000-plus pages of blueprints and technical details on DCNS’s Scorpene submarines, is a necessary collaboration between government, contractor and manufacturing entities,” Gordon said. “But the exposure of these Indian naval secrets illustrates how lax file protection has opened a door to new data loss risks—and how even confidential military information can be exfiltrated and exposed by a weak link in the supply chain.”

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HousingWire.com image. Click for site.

HousingWire.com image. Click for site.

If young families in New England can’t find a starter home to buy, she might be partly to blame. As a small-time real estate investor, she swoops in and buys would-be starter homes before families can and turns them into rentals. She says she feels badly about it … but she also feels she has to do it, for her own security, and because tax laws nudge her that way. As a single mother, she and her son live in a condo while she bets long on land, and being a landlord is the only path she sees to financial security.

“It is a dog-eat-dog world out there,” she told me.

At Credit.com, we’ve chronicled the disappearance of the inexpensive starter home, and the frustration that’s causing first-time homebuyers around the country. Smaller, cheaper, older single-family homes — and homes in foreclosure — are being snapped up by investors and turned into rentals around the country. According to RealtyTrac, about one-third of all three-bedroom homes purchased in the past year weren’t bought by people who live in them. They were mostly bought to be turned into rentals.

That’s made life harder for families just starting out, and some believe making America a land of renters instead of owners threatens the very fabric of what makes a community.

(This story first appeared on Credit.com. Read it there.)

So who’s doing the buying? Recently, I got some unexpected insight in the form of reader feedback.

Regarding your starter home article, I found it lacking,” the reader wrote. “Sure, there may be fewer starter homes available, but why? You seem to blame institutional investors gobbling them up. But why are they doing that?“

You probably guessed that in the next paragraph, she answered her own question.

“Small-time investors are gobbling them up one by one. I live in a condo with my son. But I own a three-bedroom starter home as a rental — I bought it because it was a good deal, in a good school system,” she said.

So I called the woman to hear her side of the story. She agreed to talk with me on condition of anonymity, lest that interfere with tenant relations.

Her main point: Sure, some landlords gobbling up small single-family homes are big corporations looking to squeeze out quarterly profits in this newly lucrative part of the housing market. But not all of them. Some are small-time, hustling homebuyers trying to make money and save for retirement the old-fashioned way: owning land.

“I’m just trying to take care of myself and my family,” said the landlord. “Employers don’t take care of people anymore. My father has three pensions, and my parents used to say to me in the ’80s, ‘Get a job with a pension.’ Well, there weren’t many then, and there aren’t any now.”

There aren’t many good answers to retirement savings, either. Savings accounts and CDs offer paltry interest rates. Stock market investments come with serious risks. But this New England landlord, who began buying properties about 15 years ago, found if she could suss out the right deal, rent payments could cover the loan payments she makes.

“I do feel bad, somewhat, that I usurped a starter home potentially from a young family,” she said. “There is some ambivalence … The one I feel bad about is my most recent one, which I had under contract three days after the sign went up and one day after it hit the MLS … It is in a cute neighborhood only two blocks [from] a terrific elementary school.”  

She has bought and sold 14 properties. She’s doing well but hardly rolling in cash. By the time repairs and other surprises pencil out, she insists on being in the black with every property – but not much in the black. When she closed on her first rental in 2002, she cleared about $100 in the black every month. Now, that property generates $700 per month. Her others range from $400 to $1,000 per month.

But she figures her future is fairly secure. As a very rough calculation, were all her mortgages paid off, she’d be generating about $16,500 in monthly income. And that figure is probably conservative.

“Cash flow tends to increase over the years — rents tend to increase faster than property taxes and other expenses,” she said.

An Edge on First-Time Home Buyers

Why do small investors like her have a leg up on first-time buyers? That’s easy. The woman described the transaction she completed just a couple of weeks ago to acquire a new single-family home.

As a “strong buyer” who could promise a quick, hassle-free closing, her offer easily beat out families looking to buy the same home. The bank knows her and her financial situation; she knows properties well enough that she feels comfortable waiving inspections if she needs. The implications of that aren’t lost on her.

“I said to the seller, I wouldn’t pick it apart in the inspection. I already had my financing in place. There’s no way a first-time home buyer would be comfortable, or advised, to do that,” she said. “I don’t know what to say. I guess it’s a bit dog eat dog.”

Why did she feel like she had to buy the property? The landlord says that federal and state tax laws encourage people who own property to buy more property. If she sold a property, she’d have to pay capital gains taxes … unless she used the proceeds to buy another property. Ironically, she can’t use profits from a property sale to pay off her debt, for example, without facing a big tax bill. So instead, she and her small-time investor friends are starting to hoard property.

”I really would have liked to sell an investment property — or two or three — and use the profit to pay off student loans, invest for my son’s college, pay off other debt, renovate my 30-year-old kitchen in which the cabinets are literally falling apart, or most of all, pay cash for a single-family house to live in. But I can’t, due to the tax laws,” she said. “Tax laws are designed to keep investors invested. If I do a 1031 exchange and reinvest, I don’t pay the taxes and just ‘park’ my money in another building, that generates some cash flow.”

The landlord began paying attention to the housing market in her late 20s after struggling to find a satisfying career. The germ of an idea for buying properties came from a bit of observation-driven jealousy.

“It occurred to me one day as I saw my landlord walking around my apartment … that he did not have to hold down a real job,” she said. “And then it occurred to me that I was, bit by it, buying that place for him.”

She didn’t act on the feeling until her late 30s, however.

“The real catalyst was when I became self-employed. I was single, 38, [with] no real retirement savings, and I realized I’ve got no backup other than my brains. Luckily, I like real estate and I like old houses.” She also had a law degree and could handle the details of real estate transactions on her own.

When a friend called to ask for legal help with a real estate transaction, she bought the property and rented it right away. She was hooked.

The Costs of Being a Landlord

“People think landlords are just rich and they provide housing for free,” she said. “Tenants have no idea how much things cost … things like taxes, repairs … They don’t realize when they say, ‘Hey, can you send someone over, the oven’s not working,’ I’m looking at a bill of $95 just for the guy to show up, and at least another $50 for time and materials on top of that. A broken screen, minimum $25; re-sanding floors, $2,000; changing locks, $150.”

For one of the “starter” homes she owns, she had to spend heavily before she got her first rent check.

“I put about $14,000 into renovations. Not the fun stuff like a new kitchen but the ugly stuff, like new wiring and fixing a roof and a wall, and fixing the porch and the windows,” she said. “I had budgeted about $6,000, but then the state electrical inspector — because it’s now a rental, and is subject to safety ordinances — required the house to be completely rewired — a shock to me and to the electrician who had inspected the house for me.”

And while repair costs eat into the monthly income her properties generate, she knows the real estate creates a far more secure future for herself and her son.

“A lot of people expect someone to take care of them. A company, a spouse,” she said. “Becoming a landlord got me out of the ‘work at a job and hope and pray that what the employers pay is enough to live on and save for retirement and maybe take a vacation,’” she said. “I am profoundly grateful for the opportunities I have had and the wealth I have built. I just wanted you to know a bit of what might really be going on … as I see the issue with my small-time real estate investor friends … they can’t stop buying or they will get taxed so much that it is unworkable.”

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The Do Not Call list isn't protecting my cell phone, or yours

The Do Not Call list isn’t protecting my cell phone, or yours

If you’re like me, you’re afraid to answer your cell phone. And that’s a bad thing for a reporter.

It wasn’t always this way.  For years, my cell phone number seemed to be out of the public domain, and even businesses that had it were pretty respectful of my need to keep the line free.  But starting a couple of years ago, the spam-like calls began. Initially, they were mostly Microsoft tech support scam calls, or maybe IRS scam calls (I actually welcome those, but I’m weird).

Then, about 18 months ago, the avalanche began.  Five, 10, 20 calls a day. From all over.  Often, gadget-tricked into appearing as if they came from my area code so I might be duped into answering.    Spoofing.

You know the drill.  And so, my cell phone has basically become a voice mail collection system.  I don’t take calls from strangers. And yes, I’ve lost a story or two because of this. And I’ll bet you’ve lost a client or two, or maybe even a friend, over these horrible robocalls.

Finally, it appears *something* is being done about it.

The FCC held a hearing today and announced a Robocall Strike Force of big-name tech firms that have committed to finding a solution.  Apple. Microsoft. Google. AT&T.  Some heavy hitters.

According to Reuters, the group will experiment with place “Caller ID verification standards that would help block calls from spoofed phone numbers and to consider a “Do Not Originate” list.

The group will report back to the FCC in 60 days, according to FCC Chairman Tom Wheeler. In a statement, he said robocalls are a “scourge” and are dominating complaints to the FCC.

He’s right. The Do Not Call list is the msot popular thing the federal government has done since….well, maybe ever.  Hopefully, this industry group can provide a private solution.  But if not, here’s hoping the FCC and other federal agencies are ready to step in and take drastic action because…I want my phone back.

Here is the text of the chairman’s comments:

Good morning, and thank you to all of you who have volunteered your time to spend the next 60 days buckled down on this very important issue.

It is significant that we have not just carriers, not just gateway providers, but also equipment and service providers here at this table, because this is a challenge that is going to require everybody’s commitment.

Thank you to my colleagues on the Commission for joining us today.

I particularly want to thank Randall Stephenson for stepping up to lead this effort.

Americans are fed up.

Robocalls are a scourge. It’s the number one complaint that we hear from consumers at the Commission. We receive more than 200,000 complaints a year.

Americans are right to be fed up with robocalls.

They are an invasion of privacy, and this scourge is rife with fraud and identity theft.

The problem is that the bad guys are beating the good guys with technology right now.

Voice over Internet Protocol calls from scammers in foreign countries rely on networks that aren’t ready to deal with them.

The ability to spoof a legitimate phone number is a downside to a digital environment.

Let me reiterate that this isn’t just a network problem. This is a community problem.

This has to do with those who build and operate networks, those who build and operate equipment, those who build and operate services. And that’s why it’s significant that you’re all collectively here at this table.

The profit motive has driven bad guys to technological innovation that exploits consumers by exploiting networks

It’s not as if good guys standing idly by. But we need more urgency.

Let’s get to  work on real solutions for robocalls.

You’ve got a group that’s going to be working on the tools to allow third parties to develop call filtering options. That starts with open APIs, but let’s give folks the opportunity to get creative and find solutions.

There must also be cross-carrier joint efforts to detect and stop the bad guys. Maybe it’s a “Do Not Originate” list. Maybe you’ll come up with something better.

But this is something that has to be multi-carrier, cross-carrier, and a community solution.

The Commission is committed to being an effective partner. Tell us what regulators need to do to help you achieve your goals.

We’ve already said that there’s nothing in the rules that prohibits carriers from offering call-blocking, but it we need to do more, tell us where we need to do more.

Let me make one last observation.

As in any pressing challenge like this, perfect is the enemy of the good. The nature of software, as you all know, is start and continually improve. Let’s have that philosophy here. Let’s not sit around and wait for the ultimate solution. Let’s start solving the issues immediately. And let’s improve it tomorrow. And then make it even better the day after tomorrow.

Thanks again to all of you for your willingness to come together to attack the robocall epidemic. You set an aggressive schedule. We’re grateful for that. We look forward to the results in 60 days.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list, or click on an advertisement, or just share the story.





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Click above to read the entire list of Olympic lessons at Grow.com

Click above to read the entire list of Olympic lessons at Grow.com

Watching athletes stand on the podium, sniffling as their national anthem plays, it’s easy to get swept up in the romance of winning a gold medal.  It’s also easy to forget that television has the bad habit of compressing time for viewers.  Michael Phelps makes winning gold medals look easy.  His races last only a minute or two while you watch, but what you don’t see are the all the years of early mornings, late nights, and self-sacrifice that lead to these heady moments.

It’s tempting to think, “He’s lucky.”

It’s not unlike the feelings generated by that annoying friend almost everyone has who retires early and spends their days golfing, or traveling, or learning to paint — even though she wasn’t an executive or a start-up CEO.

“She’s so lucky,” you might think.

But that would be a mistake. And a missed learning opportunity. The folks at Grow asked me to write about things people can learn about finances by watching the Olympics, and here’s a taste of what I had to say:

There’s a lot you can learn about setting goals and “winning” from watching the Olympics during the next two weeks.  We begin with the most import lesson of all:

  1. Winning a gold medal takes only a moment. Preparing for that moment takes a lifetime.

Some Olympic competitions last only a few seconds. An athlete’s’ whole sports life is compressed into a single hurl of a javelin, or a vault, or a shot. That “moment of truth” may very well be the athlete’s only chance at sports glory.   This makes for amazing television drama.  But that’s all it is: TV drama.  In real life, the athletes have to eat, sleep, and drink their sport for 10-20 years.  Behind a 9-second 100 meter dash are hundreds of early mornings where the athlete refused to hit the snooze button, and instead hit the day running. Each day is a moment of truth.  Each morning, a well-trained athlete wakes up faced with a question: “Do I want to go back to sleep, or do I want to win a gold medal some day?” Picking tomorrows goal over today’s snooze, day after day after day, is the key to success.

Going for financial “gold” requires this same kind of thinking.  Day after day, monthly budget after monthly budget, you have to stay disciplined at stick to your goals. Your moment of truth comes each time you consider splurging on new clothes and busting your budget. Do you want today’s shiny object or tomorrow’s financial goal? Answering that question correctly, time and again, is one of the keys to financial success.

Read the rest of this story at Grow.com’s website. 

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Sen. Ed Markey

Sen. Ed Markey

Sometimes, a glitch is more than a glitch. Sometimes, that glitch grinds much of the country to a halt. And it gets the company involved hauled in front of Congress to explain itself.

Recent airline techno-disasters at Delta and Southwest — and United last year — have made one thing clear: Systems designed to keep America moving in the air are far too fragile.  Are they just too old?

The outages also raise obvious questions about concentration of power after mega-mergers in the industry, and whether or not it is adequately prepared to defend against cyberattacks.

“As operators in the this critical transportation industry, it is your responsibility to ensure that your IT systems are both reliable and resilient,” wrote Sens. Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn) in a letter to the airlines this week.

Last week, Delta Airlines flights were grounded for at least six hours, and passengers endured a day’s worth of hassle, lost work, and potentially lost wages. Delta blamed a power outage, but in Atlanta, but Georgia Power disputed that claim.

In July, a glitch was also blamed for grounded all Southwest Airlines flights. Last year’s United fiasco was equally as painful, and was blamed on a failed reservations systems router. 

Markey and Blumenthal want a better explanation. They also want assurances that the airlines are working to make sure backup systems are more robust.

“We are concerned with recent reports indicating that airlines’ IT systems may be susceptible to faltering because of the way they are designed and have been maintained,” the pair wrote in letters to various airline CEOs. “Now that four air carriers control approximately 85 percent of domestic capacity, all it takes is one airline to experience an outage and thousands of passengers could be stranded, resulting in missed business meetings, graduations, weddings, funerals, and other prepaid events.”

They have asked the airlines to answer a set of questions by Sept. 16.  Among them:

 

  • Over the past five years, what was the cause of IT outages or disruptions that caused flight cancellations or delays longer than one hour, what safeguards were in place at the time each outage occurred, and why did these safeguards fail to prevent the disruption?
  • What specific safeguards and backups does your company have in place to prevent your airline’s IT systems from failing?
  • What is the state of your airline’s IT system and what specific steps are being taken to modernize it, if needed?
  • In the event of delays and cancellations caused by the air carrier, does your airline rebook passengers on another airline or with a different mode of transportation for no additional charge?
  • What other compensation and recourse, including but not limited to lodging, food, and reimbursement, does your airline provide consumers in the event of delays and cancellations caused by the air carrier?

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MyCreditUnion.Gov. Click for more.

MyCreditUnion.Gov. Click for more.

Americans are doing a little bit better at saving money in an emergency fund — but women, some minorities, young adults, and the less educated are still woefully unprepared for a financial emergency, according to a new study.

Overall, there have been marginal gains in the number of Americans who say they could come up with $2,000 to cover a surprise expense “in the next month,” according to the study published by the Financial Industry Regulatory Authority (FINRA), the financial industry’s self-regulatory board.

In 2012, 40% said they probably or certainly could not so do. In 2015, that number had fallen to 34%, FINRA says. Similarly, in 2012 some 35% said they were certain they “could come up with the full $2,000.” That number is now 39%. The improvements, while narrow, suggest the “financial fragility” of Americans is slowly easing.

(This story first appeared on Credit.com. Read it there.)

Wide gaps among different demographic groups tell a far more pessimistic story, however. Here are some of the findings.

  • Gender: Women are in a much more fragile position. While 28% of men said they probably or definitely could NOT cover a $2,000 expense, fully 39% of women said they could not.
  • Age: Those over 55 are in a far stronger position. While only a quarter of that group said they probably/certainly could not raise $2,000 in a month, 43% of those under 34 said they couldn’t.
  • Ethnicity: Whites are better off than Blacks or Hispanics, but Asians are most prepared. While 30% of Whites said they probably/certainly could not come up with $2,000, only 24% of Asians said so. Hispanics (39%) fared worse than both groups. Most alarming however, is that nearly half of African Americans (48%) said they probably/certainly could not, making them the most fragile ethnicity. In fact, among demographic groups of all kinds, only those with incomes under $25,000 fared worse.
  • Income: Not surprisingly, income levels tracked tightly with financial fragility. Still, 11% of those earning more than $75,000 annually said they probably/certainly could not deal with a $2,000 emergency. One-third of those earning between $25,000-$75,000 said they could not, while 63% of those earning less than $25,000 said they couldn’t.
  • Education: School attainment levels were also a solid predictor of financial fragility. Only 18% of those with a college degree or more probably/certainly could not deal with a $2,000 emergency; but 45% of those with only a high school degree or less said they could not.

“Consistent with previous years, the 2015 NFCS finds that measures of financial capability continue to be much lower among younger Americans, those with household incomes below $25,000 per year, and those with no post-secondary educational experience,” FINRA said in its report. “African Americans and Hispanics, who are disproportionately represented among these demographic segments, also show signs of lower financial capability, making them more vulnerable.”

It’s important to note many of the demographics that appear to be having a harder time saving for emergencies have been found in various studies to earn less income than their counterparts.

Overall, the findings are consistent with plenty of other studies showing Americans are poorly prepared for financial emergencies. In March, for example, the Associate Press-NORC Center for Public Affairs released poll data with even bleaker numbers. Two-thirds of consumers in that study told the center they would have trouble coming up with funds to cover a $1,000 emergency.

Analysts have long wrestled with the problem of understanding Americans’ lack of savings. While the recession clearly made it harder for Americans to save, Americans weren’t great savers back in the boom years, either. In fact, by some measures, America’s overall savings rate fell below zero — the nation was spending more than it was earning — back in 2005.

Saving isn’t sexy, and it isn’t lucrative, either. Most traditional savings accounts offer barely perceptible interest rates, and even most Internet-only banks offer less than 1% returns.

The tax code is at least partly to blame, too. While tax-advantaged retirement accounts like 401K plans heavily encourage saving for the long term, there is no similar nudge to convince U.S. consumers to save for the short or medium term. Both Canada and the U.K. permit 401K-like accounts that encourage saving money to be used before retirement.  Lower-income Americans can participate in “Individual Development Accounts” designed to encourage savings, but no such tax-advantaged plan is available to the general public. The idea has been floated several times in the U.S – President George W. Bush proposed something similar, called Lifetime Savings Accounts, back in 2003 — but the idea has not taken hold.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list, or click on an advertisement, or just share the story.





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People ask why I take my dog on road trips. Here’s why.

August 10, 2016 RoadTrip

People often ask me: “Why travel with your dog?”  It’s a hassle.  It severely limits the hotels I can stay at, and usually costs me more. It slows me down. It’s hot. I have to stop so he can pee. It makes dinner meetings almost impossible. Well, any normal meeting or interview impossible, really. Oh, […]

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Stop what you’re doing and go on vacation, before it’s too late! It’s good for you (and your career)

August 10, 2016 The Restless Project

Go on vacation. Your heart needs it. Really. In the long list of studies I’ve shared extolling the virtue of holidays and warning about overwork, this one is the most important: A massive study published last year showed that employees who put in more overtime had much higher likelihood of heart disease and stroke. Those who […]

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Visa to ease liability pain on merchants, which should help speed conversion to credit card chip readers

August 9, 2016 Cybercrime / Privacy

The switch to chip-enabled credit cards last year came with a serious deadline: New rules went into effect in October making merchants more liable for fraud. As is obvious to everyone who’s swiped when they should have inserted their card at a checkout line, the changeover hasn’t gone as smoothly as hoped. So, quietly, the credit card associations have […]

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#RoadTrip2016: Across the land, Americans don’t want to talk about ‘it’ — and that’s a disaster for democracy

August 8, 2016 Roadtrip2016

SOMEWHERE BEAUTIFUL BETWEEN NEW YORK AND SEATTLE — America, we need to talk.  And not on Facebook. I mean, really talk. I’ll have many thoughts to share from this summer’s cross-country road trip (#RoadTrip201^), but one is screaming at me so loud I have to spit it out immediately.  While seemingly everyone loves ranting about […]

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