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The New York Stock Exchange went dark yesterday.
The Wall Street Journal website also shut down, displaying an odd “Oops, 504!” message for a period of time instead.
And for almost two hours, the vast majority of the airplanes operated by United Continental Holdings (UAL) were grounded. Thousands of travelers were stranded around the U.S.
The NYSE blamed a “configuration issue” related to a software update. It took almost four hours to reboot and restart the exchange’s trading systems, forcing investors to re-route orders to alternate systems for one of the longest stretches in history.
United also blamed a failed router and “network connectivity” problems for its massive outage, the second such “glitch” in a month. But that was cold comfort to flyers, since more than 1,150 flights were delayed in the midst of the summer travel season.
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| Cyber problems hit the NYSE, United and the Wall Street Journal on the same day. A coincidence? |
As for the Journal, there’s not much word out there about what caused its home page to go down. It was still under investigation.
Government and corporate officials quickly declared these events unrelated and coincidental. They denied any evidence of a coordinated cyberattack or new cyber war.
But let’s be honest: It sure does look suspicious. And even if it’s nothing more than a sequence of random events, there’s no denying that computer crime, fraud and sabotage is surging like never before.
Protecting YOUR Data … and Profiting, Too
These are precisely the kinds of events we’ve been expecting. That’s why my team and I recently launched a massive research project on cybersecurity. The goal?
- Identify the scope of the problem …
- Explore potential solutions for corporations and governments …
- Determine and explain preventative steps you can take to increase the security of your data and personal information …
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And most importantly, dig into the companies at the forefront of the cyberdefense industry! These are the companies tasked with keeping corporate and government networks, computers, and data safe from intrusion.
| “There’s no denying that computer crime, fraud and sabotage is surging.” |
Many of these firms are making money hand over fist. They’re growing by leaps and bounds. Customers are practically banging down their doors to give them money – precisely to prevent cyber-disasters like we saw yesterday.
Their potential is extraordinary … but there are also plenty of fly-by-night operations you don’t want anything to do with. The trick is separating the wheat from the chaff. We’ve done our dead level best to help you, and I encourage you to click here for the results.
So what do you think about the recent series of technology breakdowns? Coincidence … or something more? Can we expect more massive outages like this, and if so, where do you think they will strike? What steps are you taking to keep your financial and other data safe? Any tips you’d like to share with your fellow investors? Here’s the link to the website where you can share them.
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The volatility is really ramping up in U.S. and global markets, as multiple crises and policy responses buffet stocks, bonds, and currencies. I’ve laid out some of my prescriptions for dealing with today’s turbulent markets here in Money and Markets, and here are some of the comments you had to share …
Reader Chuck B. weighed in on the chaos in Chinese markets, saying: “China’s ham-handed rulers are doing just the opposite of what is needed to inspire confidence in their markets. Halting all trading for a few days to let things settle might have been justified. But not allowing companies and officials to sell stock, perhaps while a small profit is still available, will simply scare those people into rash actions of one sort or another.
“Small investors also will likely be scared into giving up on the markets. After all, they will realize their investments are at the mercy of politicians in Beijing. We should also be aware that our investments are at the mercy of politicians in Washington, both directly and indirectly.”
As for Greece, Reader Frank E. said: “If Greece leaves the euro, and begins again with no international debt, will not their money be cheap, and thus allow them to begin to export more goods made there? Also, it should give a large boost to their tourist business.
“They will suffer a great deal no doubt now. But looking down the road, it seems to me that they no other choice. They cannot pay this huge debt that they have run up, and the countries that gave them the ‘loans’ well knew this.”
Reader Bobby shared this observation about the combined impact of those two crises: “Amazing. These two countries could topple the world economic system … not Greece likely by itself, but in concert with China? Quite.”
As for what to expect next, Reader Billy sounded a grim note: “It is looking clearer and clearer by the day that based on macro-economics, technicals, cyclicals, geo-politics, commodities deflation pressures, and demographics, that a major capital markets correction is in the process of beginning to play out.”
Thanks for all those opinions. We are definitely on a knife’s edge here, and things could go either way. So I hope the strategy guidance I’ve given you in stocks, bonds, and currencies to date has helped, and I’ll continue to do all I can to help you navigate these turbulent waters.
In the meantime, if you haven’t commented on these crazy markets yet, don’t hold it in any longer. Go to the website and make your voice heard soon.
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Are you seasick yet? After plunging by some of the largest margins since the Great Recession, China’s Shanghai Composite soared 5.8% overnight – the biggest one-day rally in six years.
While more than half the stocks traded in Shanghai and Shenzhen remained halted, several stocks that had been halted were re-opened. When they were, their prices surged by the 10% maximum amount allowed. Increased scrutiny of short-selling by Chinese authorities and new steps to boost borrowing for stock purchases helped stem the carnage.
Germany is still digging in its heels and refusing to budge. But the pressure to forgive a portion of Greece’s debt is growing. The U.S. added its voice to the debate, siding with the International Monetary Fund in favor of write-downs on the 317 billion euros worth of debt Greece is carrying.
Greece’s stock and bond markets remain closed, and so does the banking system, according to fresh announcements out of that country. Things could get ugly when they reopen if Greek and European negotiators can’t hammer out a deal.
Hopefully you’re not reading this as you seek to board the London Underground. A massive “Tube” strike has forced commuters to seek alternate transport on buses or their own two feet, snarling traffic all over the city. Workers are feuding with management over working conditions and pay related to the extension of subway service into overnight hours, beginning in September.
So are you anxiously awaiting your chance to load up on Greek stocks when that country’s market reopens? Are you encouraged by what China is doing to stem the chaos there? Hit up the website and let me hear about it.
Until next time,
Mike Larson
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Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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A cyber attack is always possible while some creeps have nothing better to do with their time. But just as much, I worry about another attack on our electric power like what happened in 2003. I am not aware that there’s been much improvement on our electrical grid in the northeast and midwest parts of the U.S. Do you know any more on that topic?
balderdash. not?
After the huge drop in China’s markets, a bounce could be expected, maybe even for a few days, but the weakness “ain’t over ’til its over”, as Yogi Berra would say. Look for more declines in Shanghai and Shenzhen after a bit of recovery. Eventually there will be new opportunities in the Middle Kingdom.
Anyone with a background in software development knows that you don’t make updates to critical systems during your peak usage times. Schedule them for when the markets are shut. If you believe this was a software update, I have a bridge to sell you.
We have built a house of glass blocks. The internet is and always has been a place fraught with danger. Yet we just become more and more dependent upon it every day. There is no way the cyber security firms can stay ahead of the hackers. The best they can do is react when a new vulnerability is discovered. TOO LATE FOLKS! We Americans puff our chests with out technology know-how. The rest of the world (at least significant enemies) has caught up and perhaps surpassed us. And our President thinks he can negotiate with them. They laugh at his Naivety.
After, I have read this email and try to learn more about the stocks. In the economy today seems that very makes people nervous.
I am not an expert and I am glad I got t read and learn more.
The poor person like me when is good time to buy?
Demand and supply up and down manipulated the consumers like this?
Thanks. :)
This was a test for future cyber warfare. I fear that Malaysia Air’s missing flight was stolen right under our noses with those 20 or so cyberware engineers on board. Those engineers have the expertise to do great damage to the system if inclined to do so. We are extremely vulnerable to a cyber attack that could virtually paralyze our financial system and our military. It’s time to enable our cyber computer systems with manual back up to keep us from becoming a 3rd world nation should such an attack occur. The same applies to our energy grid and to our transportation system, primarily that of aviation. We need to be pro-active and pragmatic. Any person, company, or nation that doesn’t like us can do irreparable harm to us if inclined to do so.
The only way to stop cyber attacks would be to shut down the world net work and go old school, do away with facebook and other social sites and put down their pride. the other way would be to put every one in jail, so live with it.
I think it was an overload of fast traders. Every major bank of investment banking company is now involved in fast trading. It was an ideal time to trade with the market dropping so precipitously.
Recently the amount of oil in storage in the U.S.has been falling, and some think it means lower production and higher prices in future. WRONG! It is merely following the normal pattern. In early Spring, refineries shut down for maintenance, and to convert to producing summer gas. Storage of crude builds. In June and July, they are busy producing the summer gas, and storage stocks fall, as they have recently. In August and September, refineries shut down again for maintenance and to convert to Winter gas, for which demand is lower. Storage tanks begin to fill again. Overall this country is producing more oil than it is using. Producers have drilled some 3000 wells that are awaiting completion. As production fails in old wells, they complete new ones to make up the difference. With prices down, they must do so to earn enough to pay their bills. This Fall, the storage tanks will fill, and crude will become a glut in the market, which will drive oil prices down even more than last Winter. Look for Obama come up with an emergency order for wells to stop pumping, because there is no place to put the stuff. There is a law, after all, that forbids selling crude to foreign users. Midstream stocks may do very well, though, with all that crude in the pipelines and tanks.
Accurate assessment . It would really help if they would lift the ban on exports. It makes loads of sense which means it probably won’t happen. If it does Targa Resources is well positioned to cash in. Jim
The lower prices will also be very good for the refiners who are snapping up the crude at low prices and selling high price refined products. Valero just had its best quarter in many years. I have also done well with Tesoro. Jim
It is a dangerous time, Uma. If you do buy now….since you have very little knowledge….maybe you should buy very small amounts of mutual funds or ETFs like ticker symbol “SPY” very gradually.
This market has run up for 6 years. I believe It is time for a correction, a big one. I would suggest that you invest only what you can afford to lose at this time. Do not go all in. But in the end……it is your call.
No doubt the Pentagon and the NSA are already going “Old School” by building another communications network besides the Internet. Perhaps they have already done so and the result is a well-guarded, classified secret. Not to worry. I don’t believe the USA is as unprepared as it seems to be….
It has been said that the Chinese have stopped a lot of people from selling and short selling is not allowed. If all of that is true, their market will continue downward. Markets need free reign to find a bottom during corrections. Artificial restraints only add to the panic and make things worse. Gubmint intervention like this sounds good……but it is not.
Once is an anomaly. Twice is a coincidence. Thrice is a Trend! Again, our “esteemed leaders” keep us in the dark when bad things happen that they don’t want us to know about. I can only hope that this was done “anonymously” to warn us of flaws in cybersecurity and not something sinister. Only time will tell.
Can you write a column on the safety of big banks like Wells Fargo? There are ads online saying their bank confiscations will happen soon and yet there are stock websites saying WF is great and we should buy it. I’m confused.
To someone who has spent the last 20 years building public safety networks, these outages are worrisome because they indicate both design flaws (in the case of UAL) and procedural flaws (in the NYSE case). In both cases, I would imagine that cost-cutting measures can be implicated. All critical infrastructure should be designed with no single points of failure and no software code change on a mission-critical system should be made without a tested and effective rollback plan. A three-hour window for a re-load is very problematic in that environment and to me suggests they are running on an inappropriate platform given the nature of the work.
However, over the past decade I have seen increasingly bad engineering that accepts a higher failure rate than we would have accepted in the past. Remember when your phone line would stay alive even during a power outage because it was powered by giant generator-charged batteries at the Central Office? I now experience several dial-tone failures per year due to failure of downstream components installed in little metal cabinets that have none of the controlled environment of the C.O. Many people would say it doesn’t matter because everyone has cellphones anyway but not all of us want to trade reliability for convenience.
And in regards to the comment above about the government developing separate networks that are independent of the Internet – they already exist both in government and to some extent in the private sector.
Regards,
nm
Because of past events, experience and friends close to China markets and the Fed… I would like to offer the following scenario and explanation. You won’t read this anywhere, it’s simply something out of my head. But, it’s probably closer to the bone than anything else you will hear or read until at least 5-10 years goes by.
First, we had an impossible “same time†connection of events. United Airlines flight groundings, Wall St. Journal Website, NYSE down for same 3 hours and a stock market crash in China of their stock market which seemed unstoppable until Wednesday morning.
The broader media explanation is a “computer glitch†of sorts. I can tell you, that this is impossible! Standard industrial computer equipment for Oil and Gas or even a waste water treatment system has double redundancy because of the hazardous condition if a system goes down. I can tell you that NYSE and China stock exchanges has 3 x that!! Why?, the markets failing, even for one day (as you know from 911) can be more dangerous than a well-placed Atomic Bomb. Believe me, it’s all backed up to factor of ten!
Next, everyone that I know way farther up the financial food chain, believed, like me that China melt down, UA flights, and 3 hour flash crash are related. I whole heartedly agree!
I add to this, 25 years in Industrial Computer hardware and software training and promotion.
Know that if the China market continued to collapse beyond the 20-30% and effectively forced into a bear market, the entire connected global markets would very possibly go down with it. (We came very close)
Next, I’m one of the few people who has direct experience with the NSA computer systems and its circuit breakers worldwide. The NSA (national security Assoc) and TAO (tailored Access operations) has incredible access to China network as well as a host of installed software based circuit breakers between the Airlines and the stock market since the terrorist attacks on twin towers and stock market shorting operations thereof. The basis of the NSA computer connection, includes not only the Airlines and Wall Street NYSE but also The Wall Street Journal news casts. Media tends to know things quicker than our own government officials, and NSA uses that.
The probability of all these events happening at the same time on their own is one million to one. The probability of a military style circuit breaker being launched by the NSA either begged by our china friends we owe much or collected information by the NSA/TAO, is the MOST probable explanation in my view. Unfortunately, that circuit breaker is connected to unwanted fallout (UA airlines, journal etc.) There was not time to engineer a precise disconnect of the National Security System. They just pulled it, when China market was going down the tubes.
A military style connection or disconnection in times of swiftly rising trouble is the only way the China Stock Market meltdown could be contained. As we awoke Wednesday morning, a high frequency trading algorithm was surely ready go off, selling China stocks and indexes in the US. That would have been the final blow, to china stock market. Whether this was done as favor to China or our own security protection, matters not. What matters is how fragile and interconnected all our financial systems really are globally and why the US must resort to such measures. Expect to see more in the future….
Under “protecting your data” #3, you used “preventative”. Really? I expect better than that from y’all. The correct word is “PREVENTIVE”! ‘Preventative’ is an alliteration that somehow got into the the vernacular and found itself in somewhat common spoken, then written, usage. A little bit like asking “Where is it AT?”. Argh!!!
As for the simultaneous breakdown of three major computer systems, I think the average Joe, and I include myself in this group since I have no useful technical ability in hardware or software, would accept the explanations given since there are so many thousands of companies out there whose systems could have gone down, and we have all worked for companies which have had at least one catastrophic system failure during work hours. Unfortunately, hearing what an expert with an “insider’s” viewpoint has to say certainly gives one pause….
Sincerely,
Glenn Gates
So, the Communist State is playing “Mindfull” Capitalism; obviously not knowing/studying historic capital policies. Internet rumors have said China was buying massive physical Gold to support their banks and to insure solvency should a crisis occur. Well… Does this recent event suggest that sudden huge gold sales will flood the market and supply will depress market value of the metal also? Hmmmm…..? ! ? !