Truth About Computer Security Hysteria
VB2002 part 3: whole economies might die with the InternetRob Rosenberger, Vmyths co-founder
Wednesday, 8 January 2003
THE MUSINGS OF Jimmy Kuo (Network Associates) never got a chance to elevate the discussion at the VB2002 speakers' panel. Vesselin Bontchev (FRISK), sitting in the front of the audience in what I'd call the "mantle" position, grabbed the mic and slapped a timeline on Earth's destruction:
Let's recall a bit of trivia, shall we?
The entire U.S. brokerage industry shut down for four days in September 2001. Many firms lost their Internet connections — oh, plus they lost their filing cabinets and I think some employees died. Experts feared a global price implosion when U.S. markets reopened. It occurred at a time when the industry struggled to (a) reorganize after the Internet bubble burst and (b) save at least some brokers' paychecks from the slaughter of web-based trading. The events of September 2001 gave Wall Street an excuse to lay off even more employees, plus it gave A.G. Edwards an excuse to dump their 115yr-old "no layoffs allowed" tradition.
Yes yes yes, I know it happened a looooong time ago to a minor financial subgroup in a country far far away, but think hard! You may remember it.
So let me see if I get this straight. A chaos-riddled Wall Street survived the complete destruction of zip code 10048 and the loss of four days of trading and massive layoffs in September 2001 — but they'll wail in agony if they lose Internet connectivity as of September 2002?
Man, I can't wait for Bontchev to enlighten a room full of NYC brokers. "You watched the World Trade Center implode? You lost friends in the tragedy? Your brokerage headquarters got squished? Bah! Al Qaeda may take down whole economies with a computer virus in 5-10 years and the antivirus industry can't do a thing to stop it!"
You know full well Bontchev would end up on an episode of Real TV. "Suddenly an angry white-collar mob rises up from their seats to attack him..."
As you continue to read or listen to these transcripts, you'll notice I didn't lose my patience when Bontchev predicted "whole economies" may fall "in the next 5-10 years." He merely confirmed what I've long suspected — his firm can't save us from the ravages of Osama bin Virus! Tsk, tsk.
Let me be the first to offer future condolences to FRISK's entire customer base.
Laugh if you want but I'm serious. FRISK can't protect its customers. Bontchev himself — arguably the antivirus cartel's most decorated cyber-soldier — told a VB2002 audience he can't even stop viruses from invading his own mother's PC. "False prophet! False prophet!"
Memo to Bontchev: I adequately protect my mommy's PC, you know.
Nor will I applaud Nachenberg for asking out loud if I was "writing all this down." Perhaps he simply reacted to the nervous rumble of laughter in the audience. I made a joke about a "blended threat" cocktail and I gave Nachenberg a limited-edition jersey and I'll leave it at that. He did a fine job as moderator.
But Nachenberg did offer
Critics would argue Nachenberg doesn't know what he's talking about. ("Oh, and I suppose you do?" Yes.) Fully 100% of all trading has occurred online for at least two (if not three) decades!
Indeed, the NASDAQ itself only exists in the ethereal plane — its computer network opened for business in 1971 with no trading floor. When you see people "reporting live from the NASDAQ," they're really just standing in a television studio.
Far too many computer security experts think "online trading" got started when brokerage firms added a Java applet to their website. Bah! Serious investors installed a Bloomberg terminal in their home or office looooong before the Internet grew popular. Donaldson, Lufkin, & Jenrette took the concept of direct online trading to new heights in the late 1980s.
"But Rob, an ocean of paper littered the streets on 9/11/01 and you yourself call a broker to execute every trade." Correct. The U.S. Securities & Exchange Commission demands a lot of pulp and a lot of phones; their paranoia dates back to the crash of 1929 and it won't dissipate anytime soon. I can fax or email my broker, for example, but the SEC demands he must hear my voice to confirm it. Then he types my trade into a computer network...
"Okay, Rob, so what did the Internet bring to the brokerage table?" Obviously, a hundred million tulip bulb investors can now place their own trades directly into the computer network. Not so obviously, it removes the professional oversight of your portfolio. My broker's advice keeps me from flushing money down the toilet with the click of a mouse. I honestly believe a cybergeddon will do more good than harm for hordes of clueless micro-investors out there.
Hey! Is that the "25%" Nachenberg speaks of?
Memo to all you toilet flushers: jiggle the handle here instead.
[Continued in part 4:
[continued in part 4: