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Examining Risk in the World of Big Data
Sony Pictures. Target. Home Depot. Anthem. Ashley Madison. JP Morgan Chase. Yahoo. Equifax.
What's the common thread among these companies? They've all been victims of a recent data breach. The latest attack on Equifax, one of the three largest credit agencies in the US, suffered a breach that may affect 143 million consumers. Due to the sensitivity of data stolen
--- including Social Security, driver's license and credit card numbers as well as names, addresses and dates of birth
--- this is being called one of the worst breaches ever.
While it's too early to fully understand the Equifax breach, many people question how, despite thousands of brilliant people developing cybersecurity capabilities, we still have so many data breaches.
According to Risk Based Security, which tracks data breaches worldwide, more than 2,200 data breaches occurred in the first half of 2017 alone. These cyber incidents are so common because our online exposure is vast and a single method of entry can start a chain of events that leads to a data breach. The cost of cybercrime around the world is on the rise (see below).
This is an issue that affects business owners, investors and every day citizens alike.
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Ponemon Institute, Research Report
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Summer Craze Fowler is the technical director of Cybersecurity Risk and Resilience at Carnegie Mellon University's CERT Cybersecurity Division of the Software Engineering Institute. In the wake of Equifax, Summer draws an analogy between how we prepare and recover from natural disasters --- such as Hurricanes Harvey and Irma --- and how we prepare and recover from a cyber-attack.
She says, we are failing to do two critical things in cybersecurity: 1. Prepare for events by applying concepts of basic cyber hygiene (such as inventorying assets and the software running on them), and 2. Stop relegating cybersecurity to the realm of IT, and consider those needs as an integral part of the enterprise. She believes companies must protect assets by assuming bad things will happen, and use methods to sustain those assets despite the eventual disruption or breach. Assuming that nothing will ever penetrate your defenses is a losing proposition --- much like assuming that a hurricane will never strike a coastal area.
While the FBI is actively investigating the incident, some
members of congress are already demanding an investigation into the Equifax breach.
Senator
Mark Warner
of Virginia called the breach "profoundly troubling" and a "real threat" to economic security.
Risk Based Security says the most common method of attack is via "phishing." Phishing is a targeted email that may contain malware or a link to a site that asks the user to enter personal information which is then intercepted by criminals. An average of more than 200 billion emails are sent worldwide every day, and it only takes 1 successful phishing attempt to expose an organization.
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Stocks recorded modest losses last week as headlines were dominated by Hurricanes Harvey and Irma and news that North Korea was preparing another missile launch. Stocks regained some of their losses after President Trump agreed to work with Democratic congressional leaders to fund the government and raise the debt ceiling. In doing so, they also agreed to emergency funding for Hurricane Harvey recovery.
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> Global Growth:
For the first time in a decade, the world's major economies are growing in sync, a result of lingering low interest rate stimulus from central banks and the gradual fading of crises from the US to Greece, Brazil and beyond. All 45 countries tracked by the Organization for Economic Cooperation and Development are on track to grow this year, and 33 of them are poised to accelerate from a year ago.
The exhibit below shows the Purchasing Managers Indexes for 6 major economies and all are above 50, indicating economic expansion.
> Global Bonds:
Next year, global government bond issuance is expected to be positive, something we haven't seen since 2014.
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National Debt:
For the first time in history, the United States officially accumulated over $20 trillion in debt last Friday. The level was broken after the debt ceiling was raised and the White House allowed the Treasury to borrow more money.
The largest budget items are healthcare, social security, and defense. The Congressional Budget Office predicts that if current laws stand,
the deficit will reach 150 percent of GDP in 2047.
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STRATEGIC  DISCUSSIONS LUNCHEON, SEPTEMBER 26
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In our ongoing effort to bring you prominent thought leaders sharing insights on topics affecting the capital markets, we continue our
Strategic Discussions series this fall with:
Seeking Cover:
Current Geopolitical Events
and their Potential Impact on Elevated Market Valuations
Our featured speaker is James Hickey, US Army Colonel, Retired, a Senior Military Advisor to the Senate Armed Services Committee and Leader of Operation Red Dawn, the US military effort that captured Saddam Hussein near Tikrit, Iraq in 2003.
Mr. Hickey has a deep understanding of the international landscape, and extensive knowledge of current political and global security issues. His "boots on the ground" experience will offer real insights into the opportunities and pitfalls we face as a nation, and a methodology for evaluating global events.
Tuesday, September 26, 2017 from 12:00-1:30 pm in Costa Mesa, California.
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New Market Wealth Management offers modern investment solutions backed by extensive research and experience serving the needs of wealthy families. Through our strategic partnership with
Cliffwater LLC
, we have access to institutional-quality research, investment due diligence and asset allocation tools. We believe this level of experience and unique access to in-depth, sophisticated research are essential for success in today's complex world markets.
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