April 9, 2014
- “Heartbleed” news making your head spin? Here are three things to do…
- Stocks bounce (snore)… IMF forecasts 0.1% chance of global recession (uh-oh)
- Stephen Petranek on the biotech shakeout… and a “mass spec” play he’s eyeing
- From the bottom of the ocean to the Royal Mint… “I expect more from you” and other reactions to our video of “The Putin”… Tax Freedom Day delayed… and more!
It’s not only the NSA that’s made the “secure” Internet anything but.
Last fall, we learned via Edward Snowden that the NSA has cracked most of the Internet encryption protocols we take for granted.
As we put it in our virtual pages seven months ago today: “That little padlock symbol in the corner of your Web browser that you see when you check your Yahoo mail? Or when you log into your bank’s website to balance your checkbook? Doesn’t really mean anything. The NSA can get in there.”
As it turns out, the NSA wasn’t alone…
IT departments around the world are furiously patching their systems today, hoping to stamp out a bug called “Heartbleed.”
Researchers at Google and the cybersecurity firm Codenomicon uncovered it on Monday. Heartbleed takes advantage of a two-year-old flaw within OpenSSL — a set of encryption tools used on two-thirds of the world’s Web servers.
“Websites increasingly use encryption to mask data such as usernames, passwords and credit card numbers,” explains The Wall Street Journal. “That prevents a hacker lurking at a coffee shop from grabbing personal information out of the air as it travels to a wireless router… When a website is using these forms of encryption, a padlock appears with the Web address in a browser.”
If the Web server is infested with the Heartbleed bug, it can wind up storing important data — i.e., your passwords — unprotected. Hackers can grab it… and then impersonate the website of your bank, Web email provider, etc., the next time you try to log on.
Yeah, it’s bad.
But misery loves company: OpenSSL is so widespread, both the Pentagon and Homeland Security rely on it. Heh…
What can you do about it? Three things…
First, don’t panic. Just because a site is/was vulnerable is no guarantee your data were stolen.
Second, don’t go changing all your passwords until you’re sure 1) there’s been a problem and 2) it’s been fixed. “Security experts suggest waiting for confirmation of a fix,” according to CNET, “because further activity on a vulnerable site could exacerbate the problem.”
Curious about a site? You can plug in the URL here and get an instant report. If you’re curious about us, it confirms Agora Financial is good to go. (Our crack IT team was on the case early and had things fixed even before the news went viral yesterday afternoon…)
Third, get cracking on cybersecurity investing. “The data corruption problem is global and getting worse by the month,” says our Byron King. “Our government and other foreign governments will be spending like crazy on security measures.”
Codenomicon, the firm that helped Google discover Heartbleed, is privately held, so that’s a nonstarter. But several other firms working the same space are public… and with the market pulling back, they’re attractively priced.
In fact, this morning, Byron told readers of his premium advisory Military-Tech Alert to start accumulating shares in a company he clued them into three months ago. Then, the price was too steep. Now it’s down 40% in the last month. “This stock is way off of its recent highs,” he says, “and seems to have found a nice support level for a targeted buy. If this company does what I expect, it won’t stay down for long.”
For access to all of Byron’s Military-Tech Alert recommendations, follow this link.
The broad market is limping along today, all the major U.S. indexes slightly in the green. Once again, the Nasdaq is outperforming, up more than half a percent.
Of yesterday’s action, The Rude Awakening’s Greg Guenthner is unimpressed: “Yes, stocks (for the most part) finished the day higher. But the bounce we saw wasn’t exactly cause for excitement for the bulls.
“Many of the momentum stocks that had sold off violently over the past couple of weeks offered gains. Yet I didn’t see a lot of high-volume squeezes that would characterize a true snapback rally.”
Traders looking for an excuse to buy or sell are standing by this afternoon for the release of minutes from the Federal Reserve’s meeting three weeks ago.
From the “Now we’re screwed” department: The International Monetary Fund says the risk of a global downturn is now nearly zero.
The IMF’s World Economic Outlook assigns a 0.1% probability of a global recession this year — down from a guess of 6% last fall.
The IMF’s forecasting record is, uh, suspect. Said its chief economist on Sept. 2, 2008: “If the price of oil stabilizes, I believe we can weather the financial crisis at limited cost in terms of real activity.”
Two weeks later, the Panic of 2008 was in full swing…
“A movement back toward a mean after an incredible year of gains,” is how our Stephen Petranek describes the slump in biotech stocks.
“My experience with biotech stocks,” he wrote in our virtual pages on the first business day of 2014, “is that it’s not wise to think of them as a group. As is true with most things, generalizations don’t offer good information — specifics do.”
“I still think that’s a good thing to keep in mind,” he wrote his Breakthrough Technology Alert readers yesterday. When the sector got whacked good and hard last Friday, one of his first recommendations from last fall was up 3% on good news from the FDA.
By the way, ever since Stephen put out his guidance about being selective, he’s steered clear of biotech. “We’ve veered to a course that pursues tech plays, especially hardware.”
That includes the newest idea on his watch list…
If you’ve never heard of a mass spectrometer, it’s about time. “It can tell you exactly what’s in anything, atom by atom,” Stephen says.
“Archaeologists need it to carbon-date rocks in the field. Toothpaste companies need it to determine if Chinese manufacturers are adding toxic sweeteners to the product. Fish wholesalers need it to determine if they’ve got contaminants in their catch. NOAA needs it to sample air quality in hundreds of locations. Drug researchers in the Amazon need it to analyze biological samples on the spot. Anesthesiologists need it to determine the health of a patient by analyzing what they are breathing out. Geologists need it to sample rock for oil precursors.”
You get the idea…
“When I was in college,” Stephen goes on, “the ‘mass spec’ in the physics lab that I used was the size of an office, was incredibly complicated and sucked up massive amounts of power.” The company he’s eyeing has a model that weighs 12 pounds, is the size of a box of detergent and runs on a 12-volt battery.
He figures it’s a long-term — two years — speculation, and he’s not ready to pull the trigger yet. But when the time comes, his readers will be the first to know.
Five days ago, Britain’s Royal Mint began striking a limited edition made possible only by our friends at Odyssey Marine Exploration.
If you’ve been with us for a while, you know the story of the SS Gairsoppa — a British cargo ship sunk by the Nazis in 1941 off the coast of Ireland. It’s believed to contain the largest stash of underwater precious metals ever.
The company located the wreckage three miles beneath the ocean surface in September 2011. “Odyssey recovered 2,792 silver ingots, or more than 99% of the insured silver reported to be aboard the Gairsoppa when she sank,” Mineweb reports. That’s about $251 million at today’s prices.
Some of that silver will end up in a limited edition of 20,000 quarter-ounce silver coins the Royal Mint will put on sale April 21.
And don’t worry: Odyssey is getting its cut, having learned its lesson the hard way after the Black Swan fiasco. The company negotiated a contract with the British government guaranteeing 80% of the haul after expenses.
[For collectors only: The Royal Mint committed a royal blunder on one of its recent silver coin issues.
As you know, minting errors are rare — which makes the product of those errors extremely valuable. Our friends at First Federal have gotten their hands on a supply of “Britannia Mules”… and you can get yours for $350 less than many British collectors are paying. Seriously — check ’em out before they’re gone.]
“All right, guys,” a reader writes, “cute video about Putin, but a little too forced and childish. I expect more from you.
“And keep your cotton-pickin’ hands off the Bach Cello Suite No. 6 in D major.”
“I thought there would be something I could send my family,” another reader writes, “because it met a Presbyterian standard. NOT!”
“Does the Presbyterian church really use that many gutter words in their services?” writes a third. “Sure am glad I am a traditional Roman Catholic. We try to please God and not gutter trash.”
The 5: OK, so the video skirts the Presbyterian Standard by way of abundant bleeps. But again, the folks who put it together purposely patterned it after the “Honey Badger” video — in which nothing was bleeped.
Ditto the music — again it was imitative. For the record, your editor was not offended on that score, and I was listening to Bach’s cantata Jauchzet Gott in Allen Landen this morning — sung by the incomparable Lucia Popp — before sitting down at the keyboard.
If you missed what the buzz is all about yesterday and your curiosity is getting the better of you, you can scratch the itch below…
“Notice how China is just sitting back, watching Obama run his mouth at Putin, laughing behind their polite hands to the face,” a reader adds to the discussion.
“Putin just takes what he wants and China’s leaders give him tacit support, knowing they are the ones who will ultimately gain the most from whatever happens. And Obama keeps making the U.S. weaker in everyone’s eyes, and weaker, in fact, choosing a battle he cannot win, and that makes him look like an ass.”
“Any chance when you mention Russia in future commentaries,” a reader inquires, “you can include a Star Wars ‘Duel of Fates’ link?
“I strongly feel it would allow us to see the world as Putin does. I’m guessing someone with intimate Star Wars knowledge can draw a nice parallel between Putin and Emperor Palpatine.
“Don’t take that as bash on Putin. I say more power to the guy (pun intended) if he can increase Russia’s global power and influence. Would any of us act any differently in his shoes?”
The 5: Uh… to paraphrase the expression, what do you mean by “us,” kemosabe?
Cheers,
Dave Gonigam
The 5 Min. Forecast
P.S. Hooray for the recovery?
Tax Freedom Day arrives this year on Monday, April, 21. “Tax Freedom Day divides all federal, state and local taxes by the nation’s income,” explains the Tax Foundation — which devised the measure.
This year’s date is three days later than last year because however weak the recovery is, it’s enough to boost revenue from the corporate, payroll and individual income tax.
Of course, your mileage may vary — and with the right set of tools, you can make sure your own Tax Freedom Day arrives long before April 21. To make it as early as possible, take advantage of the completely legal and above-board tips and tricks we’ve outlined in our special report Vanishing Point: How to Disappear From the IRS This Tax Season and Save a Boatload of Money in the Process.
We’d love to put a free copy in your inbox. Learn how to get yours here.