November 13, 2013
- Collateral damage from the Stuxnet computer worm targeting Iran
- How to profit as 100,000 computer systems need to be fortified
- “Ugly” action in gold, Guenthner warns
- How big is China’s new gold vault?
- Obamacare as “extraction”… and as self-parody
- Milestone on the yuan’s way to global currency status… gun control Down Under… The 5 takes some slings and arrows… and more!
Stuxnet: It’s not just for Iranians anymore.
Our occasional foray into the global cyberwars takes a stunning but not surprising turn this morning: It appears the computer worm that wrecked a good chunk of Iran’s nuclear program in 2010 did a number on the Russkies too.
“Developed by military hackers,” Byron King reminds us of the background, “this virus acted like a digital drone that flew into Iran’s network. When the Iranians finally discovered the virus, it was too late. In just a few months, 1,000 centrifuges were completely destroyed. And no one had a clue how it happened.
“Little did anyone know at the time,” says Byron, “that this new cyberweapon was allegedly created by the NSA and CIA in partnership with Israeli intelligence.”
Enter a new revelation by Eugene Kaspersky, whose namesake company is one of the world’s leading cybersecurity firms.
During a recent speech in Australia, he revealed he got a message some years ago from a friend who worked at a Russian nuclear power plant: “Their [computer] network [was] badly infected by Stuxnet.”
Here’s what’s really interesting. Unlike the Natanz facility in Iran, the Russian plant wasn’t connected to the Internet. So someone would have had to physically enter the plant and deliver the virus on, say, a laptop or a portable hard drive.
The official Russian line, by the way, is that no such attack took place. But the story’s nonetheless covered on the website of RT, the Russian government’s English-language TV news network. Go figure.
Kaspersky was careful not to point a finger of blame. What he did say was, “Unfortunately, these people who are responsible for offensive technologies recognize cyberweapons as an opportunity.”
At least the Russians and Iranians are in good company. After Kaspersky delivered his speech, his firm delivered a follow-up press release.
“According to data from the Kaspersky Security Network,” it said, “by the end of September 2010, more than 100,000 computer systems in approximately 30,000 organizations around the world were infected by Stuxnet.”
Ah, the law of unintended consequences. “Everything you do is a boomerang,” Kaspersky said in his speech. “It will get back to you.”
Case in point — the U.S. oil giant Chevron. It was one of those 30,000 organizations infected by Stuxnet, although it kept the matter hush-hush until it got into The Wall Street Journal a year ago. Then the firm came clean: “We’re finding it in our systems, and so are other companies,” said Chevron’s Mark Koelmel. “So now we have to deal with this.”
Probably by buying more of Mr. Kaspersky’s services, no doubt.
Sorry, his firm is privately held. But Byron King has expended hour upon hour poring over the government’s “black budget” to identify publicly held players set to collect waves of cash from the Pentagon’s next wave of cyberwar spending. “For the first time in United States history,” he says, “you and I have been hand-delivered the equivalent of a detailed road map for making money as the new war heats up.” Use it to start planning your route to riches at this link.
Tech issues and small caps are pulling the market train this morning.
The Nasdaq and the Russell 2000 are in the green as we write, though not by much. The S&P and the Dow are in the red — again, not by much.
Gold is recovering from a small nose dive it took around the time we published yesterday afternoon. At last check, the bid is back to $1,274. Silver, however, is slipping further, to $20.58.
Gold remains in a “danger zone,” according to our chart watcher Greg Guenthner. “Both the chart and the price action have been nothing short of ugly over the past couple of weeks. If buyers don’t swoop in to save the day here, gold could very well take the elevator all the way down to $1,200.
“Remember, the $1,200 mark is near the 2013 lows. Ouch. There’s nothing to like about how this chart is shaping up to end the year. Barring some sort of a golden miracle, it looks like gold will end 2013 on the naughty list.
“My long-term target I set earlier this year stands. Look for gold to take its next step toward $1,000- 1,100 very, very soon.”
We’re at the ready, awaiting the next round of “Antichrist” emails…
Well, that’ll be more gold the Chinese can scoop up at bargain prices.
This month, a gold vault opened in Shanghai’s new free trade zone — a vault big enough to store 2,000 metric tons, or double China’s projected gold consumption this year.
“Such a facility is a massive vote of confidence for the Chinese gold market,” Philip Klapwijk tells Bloomberg. He’s managing director at Precious Metals Insights Ltd. in Hong Kong. “The trend for demand has been very strongly positive.”
The rest of Bloomberg’s story is a recitation of things you already know if you read us regularly: China is set to overtake India as the world’s biggest gold consumer this year. Chinese consumption during the first six months of 2013 nearly equaled the total for all of 2012, even as gold is set to record its first annual price drop in 13 years.
Another Chinese milestone has been recorded in Canada. “Canada’s British Columbia province,” according to China Daily, “has completed its sale of yuan-denominated bonds in Hong Kong.
“The issue, known as a dim sum bond, has a one-year maturity and a 2.25% annual return rate. The province has raised 2.5 billion yuan ($410 million) through the issue, the largest deal by a foreign issuer in the yuan-denominated bond market to date.”
About 60% of the buyers were Asian and 40% American. The B.C. government will plow the proceeds into education, health care, transportation and energy.
Year to date, total issuance of yuan-denominated bonds in offshore markets has topped 215 billion yuan — more than last year’s total.
For now, the Canadian deal will have to suffice for signals of the yuan’s arrival on the international currency stage.
A day after the “Third Plenum” wrapped up in Beijing, there are still no announcements about loosening the yuan’s dollar peg or freeing up interest rates. “But that’s not to say we won’t see these things as we go along in 2014 and beyond,” says EverBank’s Chuck Butler, who’s been our patient guide throughout The 5’s coverage since last Friday.
Markets might be impatient for signals, but, “Come on, markets, you know that doing something all at once is not the Chinese way! They prefer to be slow, and steady, and timely. So I fully expect to see these things in the future.
“Remember what Premier Li said earlier this year when he was elected. He pledged to open the economy to market forces and strip power from the government, saying at the time that the process would ‘be very painful and even feel like cutting one’s wrist.'”
You’ll never hear that metaphor from an American politician….
Especially as it applies to Obamacare. We just ran across the following tweet from Dylan Ratigan, he of the epic “extraction” rant, now detoxing from his extended stint as a cable news pundit…
According to the Manhattan Institute’s Avik Roy, more than 4.8 million Americans have been served notice their policies don’t meet Obamacare standards and are being cancelled.
Nothing a follow-up to the “brosurance” ads can’t fix, right?
As we’ve chronicled for several weeks now, Colorado is leading the way in encouraging healthy young people to sign up for overpriced policies to subsidize the care of the sick and old.
First there were the scantily clad models handing out flyers. Then came the “brosurance” ads featuring guys doing keg stands.
But there’s more where that came from. Here’s an entry already earning ignominy on the Interwebs as… “hosurance”:
And there’s much more where that came from…
“We need to reach 20-something women,” says Jen Caltrider of ProgressNow Colorado Education, “and we hope this round of ads will do that.”
Uh-huh.
If they don’t, the entire Obamacare economic model falls apart. And even if they do, it falls apart anyway. You are taking precautionary steps, right?
“I’m always amazed,” writes a reader from Down Under, carrying on a thread that still has a bit of life, “at people who probably couldn’t find Australia on a map but are expert in their oh-so-20th-century knowledge.
“On the subject of Australian gun control,” he writes, “Yes, there was a misguided government intervention after the Port Arthur massacre. I personally suspect that as time passed, it was, ‘OMG, we’ve lost a revenue source!’
“It’s true, the restrictions are more onerous, civilians can’t have semiautomatic rifles anymore (but oh, wait … the Queensland police just petitioned for the right to arm up, apparently being outclassed by ‘outlaw bikie gangs’.) The licensing system takes time and money and police applications, but I have a Rossi Rio Grande .30-30 and a Puma .22LR bolt action after jumping through the hoops.
“And I’m waiting for the handgun safety training course. That category is less restricted.”
“You are promoting war,” reads a brief reader email. “Let’s all get rich off of war. Are you even human?” We’ll spare you the last two words of the email, which invoked carnal knowledge.
We are, frankly, baffled. Below the email was our episode from a week ago today — which had nothing at all about war but was instead a laundry list of government atrocities both major and minor, and directed dear readers to our new manual of “practical liberty,” which is being published tomorrow.
Now… we have, in our assorted publications, proffered the notion of “Making the Empire Pay.” In short, it means recognizing Washington’s empire operates on a logic all its own and that you should invest accordingly. Those investments might well include companies that are profiting from the government’s folly — even defense contractors. (That would include some of the tiny ones set to benefit from cyberwar, as we discussed today.)
If you’re still squeamish, our fearless leader Addison Wiggin made his best case a few weeks ago at The Daily Reckoning. You can review it here.
“I am finding very little actual ‘This is good to BUY stock names’ in your little chats,” writes another reader.
At least this one refrained from vulgarity…
“There are, however, lots of teasers and at the end a big sign up, subscribe, etc. Wondering what and when I am actually going to see anything on the site I did subscribe to that will help me.”
The 5: A reminder to newcomers: Our analysis comes free; the specific recommendations come at a price. You receive those recommendations with the paid publication you signed up for. The 5 is your daily bonus, icing on the cake. You’re welcome.
Cheers,
Dave Gonigam
The 5 Min. Forecast
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