Thousands of protesters from across Europe are taking part in a mass demonstration in Brussels against spending cuts by some EU governments.
Other protests against austerity measures are being held in Greece, Italy, Ireland and Latvia.
A general strike is also taking place in Spain, hitting transport and other public services.
Trade unions say EU workers may become the biggest victims of a financial crisis set off by bankers and traders.
* EU austerity drive country by country
* Food price rises are growing concern
*
Many governments across the 27-member bloc have imposed punishing cuts in wages, pensions and employment to deal with spiralling debts.
In Greece and the Republic of Ireland unemployment figures are at their highest level in 10 years, while Spain's unemployment has doubled in just three years.
In Britain the government is planning to slash spending by up to 25% in some areas, while France has seen angry protests against a planned increase in the minimum retirement age.
The European Trade Union Confederation (Etuc) said it hoped that about 100,000 people would march on EU institution buildings in the Belgian capital.
As the march got under way under a sea of banners, police sealed off the EU headquarters and barricaded banks and shops.
Cuts anger
The protest in Brussels has been described by unions as a day of action under the slogan "No to austerity, priority to jobs and growth".
Labour unions in Spain began a general strike by marching through the capital, Madrid, in an effort to shut down the city.
Continue reading the main story
“Start Quote
We didn't cause this crisis. The bill has to be paid by banks, not by workers"”
End Quote European Trade Union Confederation
Also in the capital, there were mass protests outside bus and metro stations, and few buses were running. Many high-speed trains were cancelled, and only about a quarter of commuter trains were running.
Groups of strikers have been seen in Madrid going into shops and banks trying to force them to close.
The airline Iberia said it expected to operate only 35% of scheduled flights, and there were also protests in Barcelona.
In Ireland, a man drove a cement mixer covered with anti-bank slogans into the gates of the parliament in Dublin, in an apparent protest at the country's expensive bank bailout.
Etuc says the protesters are marching to voice their anger over budget-slashing plans and cuts which "could lead Europe into a recession".
The union warns that the financial crisis - which it describes as the worst in Europe since the 1930s - has already made 23m people across the EU jobless. It fears that the austerity measures being implemented by various EU governments could "result in even more unemployment".
A woman stands in front of a closed shop in Madrid, Spain, on 29 September, 2010. Strikers held a protest in central Madrid, prompting some shops to close
"We didn't cause this crisis. The bill has to be paid by banks, not by workers," Etuc said.
Instead, the organisation urges governments to guarantee workers stable jobs, strong social protection and better pensions.
Workers in many EU countries are frustrated that they are paying for the mistakes of the banks and the financial sector, the BBC's Christian Fraser in Brussels reports.
The recovery is still fragile. In some countries it has not even begun, and many fear the cuts could provoke further trouble, our correspondent says.
He adds that in short, it is a debate on austerity versus stimulus, cuts or spending, and the opinions are deeply and bitterly divided.
Wednesday, September 29, 2010
An alarmed Iran asks for outside help to stop rampaging Stuxnet malworm
Tehran this week secretly appealed to a number of computer security experts in West and East Europe with offers of handsome fees for consultations on ways to exorcize the Stuxnet worm spreading havoc through the computer networks and administrative software of its most important industrial complexes and military command centers. debkafile's intelligence and Iranian sources report Iran turned for outside help after local computer experts failed to remove the destructive virus.
None of the foreign experts has so far come forward because Tehran refuses to provide precise information on the sensitive centers and systems under attack and give the visiting specialists the locations where they would need to work. They were not told whether they would be called on to work outside Tehran or given access to affected sites to study how they function and how the malworm managed to disable them. Iran also refuses to give out data on the changes its engineers have made to imported SCADA (Supervisory Control and Data Acquisition) systems, mostly from Germany.
The impression debkafile sources gained Wednesday, Sept. 29 from talking to European computer experts approached for aid was that the Iranians are getting desperate. Not only have their own attempts to defeat the invading worm failed, but they made matters worse: The malworm became more aggressive and returned to the attack on parts of the systems damaged in the initial attack.
One expert said: "The Iranians have been forced to realize that they would be better off not 'irritating' the invader because it hits back with a bigger punch."
Looking beyond Iran's predicament, he wondered whether the people responsible for planting Stuxnet in Iran - and apparently continuing to offload information from its sensitive systems - have the technology for stopping its rampage. "My impression," he said, "is that somebody outside Iran has partial control at least on its spread. Can this body stop malworm in its tracks or kill it? We don't have that information at present, he said.
As it is, the Iranian officials who turned outside for help were described by another of the experts they approached as alarmed and frustrated. It has dawned on them that the trouble cannot be waved away overnight but is around for the long haul. Finding a credible specialist with the magic code for ridding them of the cyber enemy could take several months. After their own attempts to defeat Stuxnet backfired, all the Iranians can do now is to sit back and hope for the best, helpless to predict the worm's next target and which other of their strategic industries will go down or be robbed of its secrets next.
While Tehran has given out several conflicting figures on the systems and networks struck by the malworm - 30,000 to 45,000 industrial units - debkafile's sources cite security experts as putting the figure much higher, in the region of millions. If this is true, then this cyber weapon attack on Iran would be the greatest ever.
None of the foreign experts has so far come forward because Tehran refuses to provide precise information on the sensitive centers and systems under attack and give the visiting specialists the locations where they would need to work. They were not told whether they would be called on to work outside Tehran or given access to affected sites to study how they function and how the malworm managed to disable them. Iran also refuses to give out data on the changes its engineers have made to imported SCADA (Supervisory Control and Data Acquisition) systems, mostly from Germany.
The impression debkafile sources gained Wednesday, Sept. 29 from talking to European computer experts approached for aid was that the Iranians are getting desperate. Not only have their own attempts to defeat the invading worm failed, but they made matters worse: The malworm became more aggressive and returned to the attack on parts of the systems damaged in the initial attack.
One expert said: "The Iranians have been forced to realize that they would be better off not 'irritating' the invader because it hits back with a bigger punch."
Looking beyond Iran's predicament, he wondered whether the people responsible for planting Stuxnet in Iran - and apparently continuing to offload information from its sensitive systems - have the technology for stopping its rampage. "My impression," he said, "is that somebody outside Iran has partial control at least on its spread. Can this body stop malworm in its tracks or kill it? We don't have that information at present, he said.
As it is, the Iranian officials who turned outside for help were described by another of the experts they approached as alarmed and frustrated. It has dawned on them that the trouble cannot be waved away overnight but is around for the long haul. Finding a credible specialist with the magic code for ridding them of the cyber enemy could take several months. After their own attempts to defeat Stuxnet backfired, all the Iranians can do now is to sit back and hope for the best, helpless to predict the worm's next target and which other of their strategic industries will go down or be robbed of its secrets next.
While Tehran has given out several conflicting figures on the systems and networks struck by the malworm - 30,000 to 45,000 industrial units - debkafile's sources cite security experts as putting the figure much higher, in the region of millions. If this is true, then this cyber weapon attack on Iran would be the greatest ever.
Tuesday, September 28, 2010
Why Obama's diplomacy is flailing
very so often, the sayings of Casey Stengel come to mind. The longtime manager of the New York Yankees, accustomed to a Prussian professionalism, moved over to the astonishingly hapless New York Mets in 1962 and, surveying his new team, uttered an exasperated question: "Can't anybody here play this game?" What applied to those Mets applies now to the Obama administration. In the Middle East, it's no hits and plenty of errors.
The arena of the administration's incompetence is the issue of West Bank settlements. This is something of a misnomer since while some of the settlements are recklessly deep into the West Bank - Ariel (above), for instance - others are indistinguishable parts of Jerusalem. They are all, under international law, illegal. But some, regardless of legality, are going to stay. Even in the Middle East, common sense can play a role. The Jerusalem-area settlements are not going to be abandoned by Israel.
The settlements issue is complicated but not unsolvable. Settlements are how Zionists settled Israel - and the Israel that mattered most to some nationalists and Orthodox Jews is not that Miami manque on the coast, Tel Aviv, but the West Bank areas of Judea and Samaria, the heart of biblical Israel.
As for the average Palestinian, settlements are a poke in the eye. The construction of each one means yet another piece of his land has gone over to the enemy and cannot be a part of a Palestinian state. It is an in-your-face reminder of impotency, of the inability to control life or fate - and of a baleful history that has seen nothing but defeat.
Given the highly emotional nature of the settlement issue, it made no sense for the administration - actually, President Obama himself - to promote an absolute moratorium on construction as the prerequisite for peace talks. The government of Benjamin Netanyahu complied, under extreme pressure, but only to a 10-month moratorium. For Netanyahu, this in itself was a major concession. He heads a right-wing coalition that takes settlements very seriously. Netanyahu had a choice: accede to Obama's terms and have his government collapse, or end the moratorium. On Sunday, with the 10 months being up, he chose the latter. We will see if the end of the moratorium means the end of peace talks. Palestinian President Mahmoud Abbas has not yet ended negotiations. He's going to confer with his fellow Arab leaders. Obama ought to also confer with someone who knows the region.
Trouble is, many experts have told him that his emphasis on settlements was the wrong way to go. As late as last week, it was clear that Netanyahu would not ask his cabinet to extend the settlement freeze. Yet not only did the White House reject this warning, the President repeated his call for a freeze. "Our position on this issue is well-known," he told the UN General Assembly. "We believe that the moratorium should be extended." Well, it wasn't.
From the start, the President has taken a hard line against settlements, refusing to distinguish between an apartment in Jerusalem and a hilltop encampment in the West Bank. He seems not to understand their importance to some Jews. Certain right-wing Israelis have reacted with the same lack of empathy. One settlement leader, Gershon Mesika, called Obama by his middle name, Hussein - a juvenile attempt at insult.
The Obama approach to the Israeli-Palestinian problem has been counterproductive. Either the Palestinians have to back down from their insistence that all settlements be frozen in place or Netanyahu has to back down from his pledge that any moratorium would be temporary. Either Abbas or Netanyahu has to lose credibility, and neither man can afford to.
Obama, too, has to husband his credibility. He foolishly demanded something Israel could not yet give. It was bad diplomacy, recalling neither Metternich nor Kissinger but the Ol' Perfessor and his question about the inept Mets. The answer, so far, is no.
cohenr@washpost.com
Read more: http://www.nydailynews.com/opinions/2010/09/28/2010-09-28_a_strikeout_on_settlements_why_president_obamas_diplomacy_is_failing.html#ixzz10pQBqe1D
The arena of the administration's incompetence is the issue of West Bank settlements. This is something of a misnomer since while some of the settlements are recklessly deep into the West Bank - Ariel (above), for instance - others are indistinguishable parts of Jerusalem. They are all, under international law, illegal. But some, regardless of legality, are going to stay. Even in the Middle East, common sense can play a role. The Jerusalem-area settlements are not going to be abandoned by Israel.
The settlements issue is complicated but not unsolvable. Settlements are how Zionists settled Israel - and the Israel that mattered most to some nationalists and Orthodox Jews is not that Miami manque on the coast, Tel Aviv, but the West Bank areas of Judea and Samaria, the heart of biblical Israel.
As for the average Palestinian, settlements are a poke in the eye. The construction of each one means yet another piece of his land has gone over to the enemy and cannot be a part of a Palestinian state. It is an in-your-face reminder of impotency, of the inability to control life or fate - and of a baleful history that has seen nothing but defeat.
Given the highly emotional nature of the settlement issue, it made no sense for the administration - actually, President Obama himself - to promote an absolute moratorium on construction as the prerequisite for peace talks. The government of Benjamin Netanyahu complied, under extreme pressure, but only to a 10-month moratorium. For Netanyahu, this in itself was a major concession. He heads a right-wing coalition that takes settlements very seriously. Netanyahu had a choice: accede to Obama's terms and have his government collapse, or end the moratorium. On Sunday, with the 10 months being up, he chose the latter. We will see if the end of the moratorium means the end of peace talks. Palestinian President Mahmoud Abbas has not yet ended negotiations. He's going to confer with his fellow Arab leaders. Obama ought to also confer with someone who knows the region.
Trouble is, many experts have told him that his emphasis on settlements was the wrong way to go. As late as last week, it was clear that Netanyahu would not ask his cabinet to extend the settlement freeze. Yet not only did the White House reject this warning, the President repeated his call for a freeze. "Our position on this issue is well-known," he told the UN General Assembly. "We believe that the moratorium should be extended." Well, it wasn't.
From the start, the President has taken a hard line against settlements, refusing to distinguish between an apartment in Jerusalem and a hilltop encampment in the West Bank. He seems not to understand their importance to some Jews. Certain right-wing Israelis have reacted with the same lack of empathy. One settlement leader, Gershon Mesika, called Obama by his middle name, Hussein - a juvenile attempt at insult.
The Obama approach to the Israeli-Palestinian problem has been counterproductive. Either the Palestinians have to back down from their insistence that all settlements be frozen in place or Netanyahu has to back down from his pledge that any moratorium would be temporary. Either Abbas or Netanyahu has to lose credibility, and neither man can afford to.
Obama, too, has to husband his credibility. He foolishly demanded something Israel could not yet give. It was bad diplomacy, recalling neither Metternich nor Kissinger but the Ol' Perfessor and his question about the inept Mets. The answer, so far, is no.
cohenr@washpost.com
Read more: http://www.nydailynews.com/opinions/2010/09/28/2010-09-28_a_strikeout_on_settlements_why_president_obamas_diplomacy_is_failing.html#ixzz10pQBqe1D
Tyler Durden's picture Bill Gross: More QE Will Lead To A "Declining Dollar And A Lower Standard Of Living; Some very troubling observations from Bil
Some very troubling observations from Bill Gross. In summary: "What the U.S. economy needs to do in order to return to the “old” normal is to recreate nominal GDP growth of 5%, the majority of which likely comes from inflation. Inflation is the classic “coin shaving” technique of government since the Roman Empire. In modern parlance, you print money faster than required, pray that the private sector will spend it to generate investment and consumption, and then worry about the consequences in a later decade. Ditto for deficits and fiscal policy. It’s that prayer, however, which the financial markets are now doubting, resembling circumstances which in part are reminiscent of the lost decades in Japan since the early 1990s. If the private sector – through undue caution and braking demographic influences –refuses to take the bait, the reflationary trap will never snap shut. Investors will likely not know whether the mouse has grabbed for the cheese for several years forward...The most likely consequence of stimulative government policies that strain to get us there will be a declining dollar and a lower standard of living. Stan Druckenmiller is leaving, and with good reason. A future of low investment returns, and a heap of trouble for those expecting more, is what lies ahead."
Monday, September 27, 2010
Cyber attack on Iran expands: Tehran threatens long-term war in reprisal
Monday, Sept. 27 it was under full-scale cyber terror attack. The official IRNA news agency quoted Hamid Alipour, deputy head of Iran's government Information Technology Company, as saying that the Stuxnet computer worm "is mutating and wreaking further havoc on computerized industrial equipment."
Stuxnet was no normal worm, he said: "The attack is still ongoing and new versions of this virus are spreading."
Revolutionary Guards deputy commander Hossein Salami declared his force had all the defensive structures for fighting a long-term war against "the biggest and most powerful enemies" and was ready to defend the revolution with more advanced weapons than the past. He stressed that defense systems have been designed for all points of the country, and a special plan devised for the Bushehr nuclear power plant. debkafile's military sources report that this indicates that the plant - and probably other nuclear facilities too - had been infected, although Iranian officials have insisted it has not, only the personal computers of its staff.
The Stuxnet spy worm has been created in line with the West's electronic warfare against Iran," said Mahmoud Liayi, secretary of the information technology council of the Industries Minister.
As for the origin of the Stuxnet attack, Hamid Alipour said: The hackers who enjoy "huge investments" from a series of foreign countries or organizations, designed the worm, which has affected at least 30,000 Iranian addresses, to exploit five different security vulnerabilities. This confirmed the impressions of Western experts that Stuxnet invaded Iran's Supervisory Control and Data Acquisition systems through "zero-day" access.
Alipour added the malware, the first known worm to target large-scale systems and industrial complexes control systems, is also a serious threat to personal computers.
debkafile's Iranian and intelligence sources report that these statements are preparing the ground for Tehran to go beyond condemning the states or intelligence bodies alleged to have sponsored the cyber attack on Iranian infrastructure and military industries and retaliate against them militarily. Iran is acting in the role of victim of unprovoked, full-scale, cyber terror aggression.
Stuxnet was no normal worm, he said: "The attack is still ongoing and new versions of this virus are spreading."
Revolutionary Guards deputy commander Hossein Salami declared his force had all the defensive structures for fighting a long-term war against "the biggest and most powerful enemies" and was ready to defend the revolution with more advanced weapons than the past. He stressed that defense systems have been designed for all points of the country, and a special plan devised for the Bushehr nuclear power plant. debkafile's military sources report that this indicates that the plant - and probably other nuclear facilities too - had been infected, although Iranian officials have insisted it has not, only the personal computers of its staff.
The Stuxnet spy worm has been created in line with the West's electronic warfare against Iran," said Mahmoud Liayi, secretary of the information technology council of the Industries Minister.
As for the origin of the Stuxnet attack, Hamid Alipour said: The hackers who enjoy "huge investments" from a series of foreign countries or organizations, designed the worm, which has affected at least 30,000 Iranian addresses, to exploit five different security vulnerabilities. This confirmed the impressions of Western experts that Stuxnet invaded Iran's Supervisory Control and Data Acquisition systems through "zero-day" access.
Alipour added the malware, the first known worm to target large-scale systems and industrial complexes control systems, is also a serious threat to personal computers.
debkafile's Iranian and intelligence sources report that these statements are preparing the ground for Tehran to go beyond condemning the states or intelligence bodies alleged to have sponsored the cyber attack on Iranian infrastructure and military industries and retaliate against them militarily. Iran is acting in the role of victim of unprovoked, full-scale, cyber terror aggression.
A Silent Attack, but Not a Subtle OneAS in real warfare, even the most carefully aimed weapon in computer warfare leaves collateral damage. The Stuxn
AS in real warfare, even the most carefully aimed weapon in computer warfare leaves collateral damage.
The Stuxnet worm was no different.
The most striking aspect of the fast-spreading malicious computer program — which has turned up in industrial programs around the world and which Iran said had appeared in the computers of workers in its nuclear project — may not have been how sophisticated it was, but rather how sloppy its creators were in letting a specifically aimed attack scatter randomly around the globe.
The malware was so skillfully designed that computer security specialists who have examined it were almost certain it had been created by a government and is a prime example of clandestine digital warfare. While there have been suspicions of other government uses of computer worms and viruses, Stuxnet is the first to go after industrial systems. But unlike those other attacks, this bit of malware did not stay invisible.
If Stuxnet is the latest example of what a government organization can do, it contains some glaring shortcomings. The program was splattered on thousands of computer systems around the world, and much of its impact has been on those systems, rather than on what appears to have been its intended target, Iranian equipment. Computer security specialists are also puzzled by why it was created to spread so widely.
Global alarm over the deadly computer worm has come many months after the program was suspected of stealthily entering an Iranian nuclear enrichment plant, perhaps carried on a U.S.B. memory drive containing the malware.
Computer security specialists have speculated that once inside the factory and within the software that controls equipment, the worm reprogrammed centrifuges made by a specific company, Siemens, to make them fail in a way that would be virtually undetectable. Whether the program achieved its goal is not known.
Much speculation about the target has focused on the Iran nuclear plant at Natanz. In mid-July the Wikileaks Web site reported that it had learned of a serious nuclear accident at the plant. But international nuclear inspectors say no evidence of one exists.
The timing is intriguing because a time stamp found in the Stuxnet program says it was created in January, suggesting that any digital attack took place long before it was identified and began to attract global attention.
The head of the Bushehr nuclear plant in Iran said Sunday that the worm had affected only the personal computers of staff members, Reuters reported. Western nations say they do not believe Bushehr is being used to develop nuclear weapons. Citing the state-run newspaper Iran Daily, Reuters reported that Iran’s telecommunications minister, Reza Taghipour, said the worm had not penetrated or caused “serious damage to government systems.”
Siemens has said that the worm was found in only 15 plants around the world using its equipment and that no factory’s operations were affected. But now the malware not only is detectable, but also is continuing to spread through computer systems around the world through the Internet.
It is also raising fear of dangerous proliferation. Stuxnet has laid bare significant vulnerabilities in industrial control systems. The program is being examined for clues not only by the world’s computer security companies, but also by intelligence agencies and countless hackers.
“Proliferation is a real problem, and no country is prepared to deal with it,” said Melissa Hathaway, a former United States national cybersecurity coordinator. The widespread availability of the attack techniques revealed by the software has set off alarms among industrial control specialists, she said: “All of these guys are scared to death. We have about 90 days to fix this before some hacker begins using it.”
The ability of Stuxnet to infiltrate these systems will “require a complete reassessment” of security systems and processes, starting with federal technology standards and nuclear regulations, said Joe Weiss, a specialist in the security of industrial control systems who is managing partner at Applied Control Solutions in Cupertino, Calif.
One big question is why its creators let the software spread widely, giving up many of its secrets in the process.
One possibility is that they simply did not care. Their government may have been so eager to stop the Iranian nuclear program that the urgency of the attack trumped the tradecraft techniques that traditionally do not leave fingerprints, digital or otherwise.
While much has been made in the news media of the sophistication of Stuxnet, it is likely that there have been many other attacks of similar or even greater sophistication by intelligence agencies from many countries in the past. What sets this one apart is that it became highly visible.
Security specialists contrast Stuxnet with an intrusion discovered in the Greek cellphone network in March 2005. It also displayed a level of skill that only the intelligence agency of some foreign power would have.
A two-year investigation by the Greek government found an extremely sophisticated Trojan horse program that had been hidden by someone who was able to modify and then insert 29 secret programs into each of four telephone switching computers.
The spy system came apart only when a software upgrade provided by the manufacturer led to some text messages, sent from the system of another cellphone operator, being undelivered. The level of skill needed to pull off the operation and the targets strongly indicated that the culprit was a government. An even more remarkable set of events surrounded the 2007 Israeli Air Force attack on what was suspected of being a Syrian nuclear reactor under construction.
Accounts of the event initially indicated that sophisticated jamming technology had been used to blind the radar so Israeli aircraft went unnoticed. Last December, however, a report in an American technical publication, IEEE Spectrum, cited a European industry source as raising the possibility that the Israelis had used a built-in kill switch to shut down the radar.
A former member of the United States intelligence community said that the attack had been the work of Israel’s equivalent of America’s National Security Agency, known as Unit 8200.
But if the attack was based on a worm or a virus, there was never a smoking gun like Stuxnet.
Kevin O’Brien contributed reporting from Berlin.
The Stuxnet worm was no different.
The most striking aspect of the fast-spreading malicious computer program — which has turned up in industrial programs around the world and which Iran said had appeared in the computers of workers in its nuclear project — may not have been how sophisticated it was, but rather how sloppy its creators were in letting a specifically aimed attack scatter randomly around the globe.
The malware was so skillfully designed that computer security specialists who have examined it were almost certain it had been created by a government and is a prime example of clandestine digital warfare. While there have been suspicions of other government uses of computer worms and viruses, Stuxnet is the first to go after industrial systems. But unlike those other attacks, this bit of malware did not stay invisible.
If Stuxnet is the latest example of what a government organization can do, it contains some glaring shortcomings. The program was splattered on thousands of computer systems around the world, and much of its impact has been on those systems, rather than on what appears to have been its intended target, Iranian equipment. Computer security specialists are also puzzled by why it was created to spread so widely.
Global alarm over the deadly computer worm has come many months after the program was suspected of stealthily entering an Iranian nuclear enrichment plant, perhaps carried on a U.S.B. memory drive containing the malware.
Computer security specialists have speculated that once inside the factory and within the software that controls equipment, the worm reprogrammed centrifuges made by a specific company, Siemens, to make them fail in a way that would be virtually undetectable. Whether the program achieved its goal is not known.
Much speculation about the target has focused on the Iran nuclear plant at Natanz. In mid-July the Wikileaks Web site reported that it had learned of a serious nuclear accident at the plant. But international nuclear inspectors say no evidence of one exists.
The timing is intriguing because a time stamp found in the Stuxnet program says it was created in January, suggesting that any digital attack took place long before it was identified and began to attract global attention.
The head of the Bushehr nuclear plant in Iran said Sunday that the worm had affected only the personal computers of staff members, Reuters reported. Western nations say they do not believe Bushehr is being used to develop nuclear weapons. Citing the state-run newspaper Iran Daily, Reuters reported that Iran’s telecommunications minister, Reza Taghipour, said the worm had not penetrated or caused “serious damage to government systems.”
Siemens has said that the worm was found in only 15 plants around the world using its equipment and that no factory’s operations were affected. But now the malware not only is detectable, but also is continuing to spread through computer systems around the world through the Internet.
It is also raising fear of dangerous proliferation. Stuxnet has laid bare significant vulnerabilities in industrial control systems. The program is being examined for clues not only by the world’s computer security companies, but also by intelligence agencies and countless hackers.
“Proliferation is a real problem, and no country is prepared to deal with it,” said Melissa Hathaway, a former United States national cybersecurity coordinator. The widespread availability of the attack techniques revealed by the software has set off alarms among industrial control specialists, she said: “All of these guys are scared to death. We have about 90 days to fix this before some hacker begins using it.”
The ability of Stuxnet to infiltrate these systems will “require a complete reassessment” of security systems and processes, starting with federal technology standards and nuclear regulations, said Joe Weiss, a specialist in the security of industrial control systems who is managing partner at Applied Control Solutions in Cupertino, Calif.
One big question is why its creators let the software spread widely, giving up many of its secrets in the process.
One possibility is that they simply did not care. Their government may have been so eager to stop the Iranian nuclear program that the urgency of the attack trumped the tradecraft techniques that traditionally do not leave fingerprints, digital or otherwise.
While much has been made in the news media of the sophistication of Stuxnet, it is likely that there have been many other attacks of similar or even greater sophistication by intelligence agencies from many countries in the past. What sets this one apart is that it became highly visible.
Security specialists contrast Stuxnet with an intrusion discovered in the Greek cellphone network in March 2005. It also displayed a level of skill that only the intelligence agency of some foreign power would have.
A two-year investigation by the Greek government found an extremely sophisticated Trojan horse program that had been hidden by someone who was able to modify and then insert 29 secret programs into each of four telephone switching computers.
The spy system came apart only when a software upgrade provided by the manufacturer led to some text messages, sent from the system of another cellphone operator, being undelivered. The level of skill needed to pull off the operation and the targets strongly indicated that the culprit was a government. An even more remarkable set of events surrounded the 2007 Israeli Air Force attack on what was suspected of being a Syrian nuclear reactor under construction.
Accounts of the event initially indicated that sophisticated jamming technology had been used to blind the radar so Israeli aircraft went unnoticed. Last December, however, a report in an American technical publication, IEEE Spectrum, cited a European industry source as raising the possibility that the Israelis had used a built-in kill switch to shut down the radar.
A former member of the United States intelligence community said that the attack had been the work of Israel’s equivalent of America’s National Security Agency, known as Unit 8200.
But if the attack was based on a worm or a virus, there was never a smoking gun like Stuxnet.
Kevin O’Brien contributed reporting from Berlin.
More terror looms as direct talks collapse - one up for Hamas, Hizballah
US-Israel
A Jewish West Bank settlement
US and Israel skirted around admitting that direct Israel-Palestinian dialogue had foundered after 26 days Sunday, Sept. 26, as Israel's 10-month moratorium on settlement construction on the West Bank expired. American spokesmen commented that with the resumption of building, a one-year clock had begun ticking for a peace accord. Even Mahmoud Abbas, who staged a walkout over Israel's refusal to extend the building freeze, did not admit to the breakdown. He left this task to Arab League Secretary Amr Mousa of Egypt and his own Fatah party, whom he said he would consult, although they were against the talks from the first.
These talks, such as they were, generated three important Middle East developments - none of them conducting to the comprehensive peace the Obama administration has been striving for: Hamas is preparing to go to the next, expanded phase of its terror campaign which has already claimed four Israel lives; Egypt and Syria are patching up their quarrel and the two terrorist organizations, Hamas and Hizballah, are crowing.
Fatah officials and the Egyptian Arab League secretary put all the blame for the talks collapsing on the Netanyahu government's refusal to extend the West Bank building freeze.
Defense minister Ehud Barak spoke of a 50-50 chance of a deal on the settlements and Prime Minister Binyamin Netanyahu called on the settlers to exercise restraint.
Otherwise there is no indication of Israel's next step on this issue - any more than on Iran's nuclear weapons drive and the Hizballah buildup. debkafile reports that the Netanyahu government and the Obama administration have reached secret regional understandings that include a partial moratorium allowing for new construction in certain places.
Jerusalem expects Washington to lean hard on the Palestinians and their Arab allies to leave the door open for talks to resume within the space of the coming critical year.
Binyamin Netanyahu's opponents claim that the US is squeezing him hard to give in to Mahmoud Abbas' ultimatum, a claim debkafile's Washington sources say is completely unfounded. On the contrary, the White House and the Prime Minister's office are of one mind that so long as the Palestinian leader holds to his demand for a total standstill on building on the West Bank and Jerusalem for the duration of negotiations, Netanyahu is entitled to stay quiet on his intentions either way.
The breakdown of the talks was widely predicted by every seasoned Middle East hand. Many political observers therefore wonder: What was the point of filling the air waves for 26 days with the extravagantly upbeat phrases heard from Barack Obama, Hillary Clinton, Binyamin Netanyahu and Ehud Barak calling the process "a historic opportunity for peace in the region?" The letdown was inevitable and leaves none of them looking good.
Perhaps the last word has not been said. Washington may go back for another try to restart the talks in a few weeks or months, but the process has already had a negative impact in the region, hardening the moderates and strengthening the rejectionists:
1. Israel is bracing for a fresh round of terror in the light of Hamas threats;
2. The feuding Fatah and Hamas are talking again, a process that will force Mahmoud Abbas into continuing to harden his posture;
3. Egypt and Israel have drawn apart on the Palestinian issue;
4. Cairo and Damascus have begun talks to bury the hatchet.
All four developments are a triumph for the Middle East radical camp and strengthen the hands of Hizballah and Hamas.
A Jewish West Bank settlement
US and Israel skirted around admitting that direct Israel-Palestinian dialogue had foundered after 26 days Sunday, Sept. 26, as Israel's 10-month moratorium on settlement construction on the West Bank expired. American spokesmen commented that with the resumption of building, a one-year clock had begun ticking for a peace accord. Even Mahmoud Abbas, who staged a walkout over Israel's refusal to extend the building freeze, did not admit to the breakdown. He left this task to Arab League Secretary Amr Mousa of Egypt and his own Fatah party, whom he said he would consult, although they were against the talks from the first.
These talks, such as they were, generated three important Middle East developments - none of them conducting to the comprehensive peace the Obama administration has been striving for: Hamas is preparing to go to the next, expanded phase of its terror campaign which has already claimed four Israel lives; Egypt and Syria are patching up their quarrel and the two terrorist organizations, Hamas and Hizballah, are crowing.
Fatah officials and the Egyptian Arab League secretary put all the blame for the talks collapsing on the Netanyahu government's refusal to extend the West Bank building freeze.
Defense minister Ehud Barak spoke of a 50-50 chance of a deal on the settlements and Prime Minister Binyamin Netanyahu called on the settlers to exercise restraint.
Otherwise there is no indication of Israel's next step on this issue - any more than on Iran's nuclear weapons drive and the Hizballah buildup. debkafile reports that the Netanyahu government and the Obama administration have reached secret regional understandings that include a partial moratorium allowing for new construction in certain places.
Jerusalem expects Washington to lean hard on the Palestinians and their Arab allies to leave the door open for talks to resume within the space of the coming critical year.
Binyamin Netanyahu's opponents claim that the US is squeezing him hard to give in to Mahmoud Abbas' ultimatum, a claim debkafile's Washington sources say is completely unfounded. On the contrary, the White House and the Prime Minister's office are of one mind that so long as the Palestinian leader holds to his demand for a total standstill on building on the West Bank and Jerusalem for the duration of negotiations, Netanyahu is entitled to stay quiet on his intentions either way.
The breakdown of the talks was widely predicted by every seasoned Middle East hand. Many political observers therefore wonder: What was the point of filling the air waves for 26 days with the extravagantly upbeat phrases heard from Barack Obama, Hillary Clinton, Binyamin Netanyahu and Ehud Barak calling the process "a historic opportunity for peace in the region?" The letdown was inevitable and leaves none of them looking good.
Perhaps the last word has not been said. Washington may go back for another try to restart the talks in a few weeks or months, but the process has already had a negative impact in the region, hardening the moderates and strengthening the rejectionists:
1. Israel is bracing for a fresh round of terror in the light of Hamas threats;
2. The feuding Fatah and Hamas are talking again, a process that will force Mahmoud Abbas into continuing to harden his posture;
3. Egypt and Israel have drawn apart on the Palestinian issue;
4. Cairo and Damascus have begun talks to bury the hatchet.
All four developments are a triumph for the Middle East radical camp and strengthen the hands of Hizballah and Hamas.
Saturday, September 25, 2010
Tehran confirms its industrial computers under Stuxnet virus attack
Mahmoud Alyaee, secretary-general of Iran's industrial computer servers, including its nuclear facilities control systems, confirmed Saturday, Sept. 25, that30,000 computers belonging to classified industrial units had been infected and disabled bythemalicious Stuxnet virus.
This followed debkafile's exclusive report Thursday, Sept. 23, from its Washington and defense sources that a clandestine cyber war is being fought against Iran by the United States with elite cyber war units established by Israel. Stuxnet is believed to be the most destructive virus ever devised for attacking major industrial complexes, reactors and infrastructure. The experts say it is beyond the capabilities of private or individual hackers and could have been produced by a high-tech state like America or Israel, or its military cyber specialists.
The Iranian official said Stuxnet had been designed to strike the industrial control systems in Iran manufactured by the German Siemens and transfer classified data abroad.
The head of the Pentagon's cyber war department, Vice Adm. Bernard McCullough said Thursday, Sept. 22, that Stuxnet had capabilities never seen before. In a briefing to the Armed Forces Committee of US Congress, he testified that it was regarded as the most advanced and sophisticated piece of Malware to date.
According to Alyaee, the virus began attacking Iranian industrial systems two months ago. He had no doubt that Iran was the victim of a cyber attack which its anti-terror computer experts had so far failed to fight. Stuxnet is powerful enough to change an entire environment, he said without elaborating. Not only has it taken control of automatic industrial systems, but has raided them for classified information and transferred the date abroad.
This was the first time an Iranian official has explained how the United States and Israel intelligence agencies have been able to keep pace step by step of progress made in Iran's nuclear program. Until now, Tehran attributed the leaks to Western spies using Iranian double agents.
Last Thursday, debkafile first reported from its Washington sources that US president Barack Obama had resolved to deal with the nuclear impasse with Iran by going after the Islamic republic on two tracks: UN and unilateral sanctions for biting deep into the financial resources Iran has earmarked for its nuclear program, and a secret cyber war with Israel to cripple its nuclear facilities.
In New York, the US offer to go back to the negotiating table was made against this background.
Leaks by American security sources to US media referred to the recruitment by Israel military and security agencies of cyber raiders with the technical knowhow and mental toughness for operating in difficult and hazardous circumstances, such as assignments for stealing or destroying enemy technology, according to one report.
debkafile's sources disclose that Israel has had special elite units carrying out such assignments for some time. Three years ago, for instance, cyber raiders played a role in the destruction of the plutonium reactor North Korea was building at A-Zur in northern Syria.
Some computer security specialists reported speculated that the virus was devised specifically to target part of the Iranian nuclear infrastructure, either the Bushehr nuclear plant activated last month - which has not been confirmed - or the centrifuge facility in Natanz.
debkafile's sources add: Since August, American and UN nuclear watchdog sources have been reporting a slowdown in Iran's enrichment processing due to technical problems which have knocked out a large number of centrifuges and which its nuclear technicians have been unable to repair. It is estimated that at Natanz alone, 3,000 centrifuges have been idled.
This followed debkafile's exclusive report Thursday, Sept. 23, from its Washington and defense sources that a clandestine cyber war is being fought against Iran by the United States with elite cyber war units established by Israel. Stuxnet is believed to be the most destructive virus ever devised for attacking major industrial complexes, reactors and infrastructure. The experts say it is beyond the capabilities of private or individual hackers and could have been produced by a high-tech state like America or Israel, or its military cyber specialists.
The Iranian official said Stuxnet had been designed to strike the industrial control systems in Iran manufactured by the German Siemens and transfer classified data abroad.
The head of the Pentagon's cyber war department, Vice Adm. Bernard McCullough said Thursday, Sept. 22, that Stuxnet had capabilities never seen before. In a briefing to the Armed Forces Committee of US Congress, he testified that it was regarded as the most advanced and sophisticated piece of Malware to date.
According to Alyaee, the virus began attacking Iranian industrial systems two months ago. He had no doubt that Iran was the victim of a cyber attack which its anti-terror computer experts had so far failed to fight. Stuxnet is powerful enough to change an entire environment, he said without elaborating. Not only has it taken control of automatic industrial systems, but has raided them for classified information and transferred the date abroad.
This was the first time an Iranian official has explained how the United States and Israel intelligence agencies have been able to keep pace step by step of progress made in Iran's nuclear program. Until now, Tehran attributed the leaks to Western spies using Iranian double agents.
Last Thursday, debkafile first reported from its Washington sources that US president Barack Obama had resolved to deal with the nuclear impasse with Iran by going after the Islamic republic on two tracks: UN and unilateral sanctions for biting deep into the financial resources Iran has earmarked for its nuclear program, and a secret cyber war with Israel to cripple its nuclear facilities.
In New York, the US offer to go back to the negotiating table was made against this background.
Leaks by American security sources to US media referred to the recruitment by Israel military and security agencies of cyber raiders with the technical knowhow and mental toughness for operating in difficult and hazardous circumstances, such as assignments for stealing or destroying enemy technology, according to one report.
debkafile's sources disclose that Israel has had special elite units carrying out such assignments for some time. Three years ago, for instance, cyber raiders played a role in the destruction of the plutonium reactor North Korea was building at A-Zur in northern Syria.
Some computer security specialists reported speculated that the virus was devised specifically to target part of the Iranian nuclear infrastructure, either the Bushehr nuclear plant activated last month - which has not been confirmed - or the centrifuge facility in Natanz.
debkafile's sources add: Since August, American and UN nuclear watchdog sources have been reporting a slowdown in Iran's enrichment processing due to technical problems which have knocked out a large number of centrifuges and which its nuclear technicians have been unable to repair. It is estimated that at Natanz alone, 3,000 centrifuges have been idled.
Thursday, September 23, 2010
Spitzer: Cuomo ‘Dirtiest, Nastiest’ Of Politicians
NEW YORK (1010 WINS) — Former New York Gov. Eliot Spitzer said he will back Democrat Andrew Cuomo come November, but it sure didn’t sound like much of an endorsement.
“Everybody knows that behind the scenes that he’s the dirtiest, nastiest political player out there,” Spitzer said of Cuomo Thursday.
Al Jones of 1010 WINS reports Spitzer, in his new role as CNN commentator, also said the Cuomo will likely face a stiff challenge from Republican Carl Paladino. The tea party candidate also appeared on the news network Thursday, and accused Cuomo of playing dirty.
“He’s sent out in the past week and a half every surrogate he could from the cesspool of Albany and from the cesspool of city government in Buffalo,” Paladino said.
Spitzer predicted the attorney general will carry the city and his opponent upstate.
“The suburban ring and the independent voters will determine the outcome of this race,” Spitzer said.
In a recent poll, Paladino had pulled within 6 points of Cuomo in what is traditionally a blue state.
Cuomo’s campaign said his record, credibility and honor speak for themselves, then added: “As do Mr. Spitzer’s.”
Spitzer, who resigned in 2008 amid a prostitution scandal, has said he’ll support Cuomo for governor, although they’ve had conflicts
“Everybody knows that behind the scenes that he’s the dirtiest, nastiest political player out there,” Spitzer said of Cuomo Thursday.
Al Jones of 1010 WINS reports Spitzer, in his new role as CNN commentator, also said the Cuomo will likely face a stiff challenge from Republican Carl Paladino. The tea party candidate also appeared on the news network Thursday, and accused Cuomo of playing dirty.
“He’s sent out in the past week and a half every surrogate he could from the cesspool of Albany and from the cesspool of city government in Buffalo,” Paladino said.
Spitzer predicted the attorney general will carry the city and his opponent upstate.
“The suburban ring and the independent voters will determine the outcome of this race,” Spitzer said.
In a recent poll, Paladino had pulled within 6 points of Cuomo in what is traditionally a blue state.
Cuomo’s campaign said his record, credibility and honor speak for themselves, then added: “As do Mr. Spitzer’s.”
Spitzer, who resigned in 2008 amid a prostitution scandal, has said he’ll support Cuomo for governor, although they’ve had conflicts
Is Stuxnet The Secret Weapon To Attack Iran's Nukes;
One of the most interesting stories in the last few days, has little to do with finance and economics (at least right now), but arguably very much to do with geopolitics. A fascinating report which cites computer security experts claims that the recent uber-cryptic malware worm Stuxnet is nothing less than a weapon designed to infiltrate industrial systems, and based on attack patterns, the ultimate object of Stuxnet may be none other than Iran's Busher nuclear reactor, which could be targetted for destruction without absolutely any military intervention. Has modern warfare just become obsolete courtesy of a computer virus?
From Yahoo:
Cyber security experts say they have identified the world’s first known cyber super weapon designed specifically to destroy a real-world target – a factory, a refinery, or just maybe a nuclear power plant.
The cyber worm, called Stuxnet, has been the object of intense study since its detection in June. As more has become known about it, alarm about its capabilities and purpose have grown. Some top cyber security experts now say Stuxnet’s arrival heralds something blindingly new: a cyber weapon created to cross from the digital realm to the physical world – to destroy something.
A brief history of Stuxnet:
Stuxnet surfaced in June and, by July, was identified as a hypersophisticated piece of malware probably created by a team working for a nation state, say cyber security experts. Its name is derived from some of the filenames in the malware. It is the first malware known to target and infiltrate industrial supervisory control and data acquisition (SCADA) software used to run chemical plants and factories as well as electric power plants and transmission systems worldwide. That much the experts discovered right away.
But what was the motive of the people who created it? Was Stuxnet intended to steal industrial secrets – pressure, temperature, valve, or other settings –and communicate that proprietary data over the Internet to cyber thieves?
And it gets much more eerie:
Since reverse engineering chunks of Stuxnet's massive code, senior US cyber security experts confirm what Mr. Langner, the German researcher, told the Monitor: Stuxnet is essentially a precision, military-grade cyber missile deployed early last year to seek out and destroy one real-world target of high importance – a target still unknown.
"Stuxnet is a 100-percent-directed cyber attack aimed at destroying an industrial process in the physical world," says Langner, who last week became the first to publicly detail Stuxnet's destructive purpose and its authors' malicious intent. "This is not about espionage, as some have said. This is a 100 percent sabotage attack."
Stuxnet is so sophisticated it may revolutionize the way modern warfare if fought entirely:
Stuxnet's ability to autonomously and without human assistance discriminate among industrial computer systems is telling. It means, says Langner, that it is looking for one specific place and time to attack one specific factory or power plant in the entire world.
"Stuxnet is the key for a very specific lock – in fact, there is only one lock in the world that it will open," Langner says in an interview. "The whole attack is not at all about stealing data but about manipulation of a specific industrial process at a specific moment in time. This is not generic. It is about destroying that process."
The virus has already spread to the point where it is safe to say most critical SCADA infrastructure may already be infected.
So far, Stuxnet has infected at least 45,000 industrial control systems around the world, without blowing them up – although some victims in North America have experienced some serious computer problems, Eric Byres, a Canadian expert, told the Monitor. Most of the victim computers, however, are in Iran, Pakistan, India, and Indonesia. Some systems have been hit in Germany, Canada, and the US, too. Once a system is infected, Stuxnet simply sits and waits – checking every five seconds to see if its exact parameters are met on the system. When they are, Stuxnet is programmed to activate a sequence that will cause the industrial process to self-destruct, Langner says.
Has Stuxnet already hit its target?It might be too late for Stuxnet's target, Langner says. He suggests it has already been hit – and destroyed or heavily damaged. But Stuxnet reveals no overt clues within its code to what it is after.
Will DEADF007 be the keyword that everyone will soon focus on?
Langner's analysis also shows, step by step, what happens after Stuxnet finds its target. Once Stuxnet identifies the critical function running on a programmable logic controller, or PLC, made by Siemens, the giant industrial controls company, the malware takes control. One of the last codes Stuxnet sends is an enigmatic “DEADF007.” Then the fireworks begin, although the precise function being overridden is not known, Langner says. It may be that the maximum safety setting for RPMs on a turbine is overridden, or that lubrication is shut off, or some other vital function shut down. Whatever it is, Stuxnet overrides it, Langner’s analysis shows.
"After the original code [on the PLC] is no longer executed, we can expect that something will blow up soon," Langner writes in his analysis. "Something big."
And the punchline - Iran's nuclear plant may have already been destroyed without anyone firing a shot anywhere:
A geographical distribution of computers hit by Stuxnet, which Microsoft produced in July, found Iran to be the apparent epicenter of the Stuxnet infections. That suggests that any enemy of Iran with advanced cyber war capability might be involved, Langner says. The US is acknowledged to have that ability, and Israel is also reported to have a formidable offensive cyber-war-fighting capability.
Could Stuxnet's target be Iran's Bushehr nuclear power plant, a facility much of the world condemns as a nuclear weapons threat?
Langner is quick to note that his views on Stuxnet's target is speculation based on suggestive threads he has seen in the media. Still, he suspects that the Bushehr plant may already have been wrecked by Stuxnet. Bushehr's expected startup in late August has been delayed, he notes, for unknown reasons. (One Iranian official blamed the delay on hot weather.)
There is much more to this story than merely creating page click inducing headlines. Computerworld itself is on the case:
A highly sophisticated computer worm that has spread through Iran, Indonesia and India was built to destroy operations at one target: possibly Iran's Bushehr nuclear reactor.
That's the emerging consensus of security experts who have examined the Stuxnet worm. In recent weeks, they have broken the cryptographic code behind the software and taken a look at how the worm operates in test environments. Researchers studying the worm all agree that Stuxnet was built by a very sophisticated and capable attacker -- possibly a nation-state -- and it was designed to destroy something big.
Though it was first developed more than a year ago, Stuxnet was discovered in July 2010, when a Belarus-based security company found the worm on computers belonging to an Iranian client. Since then it has been the subject of ongoing study by security researchers, who say they have never seen anything like it before. Now, after months of private speculation, some of the researchers who know Stuxnet best say that it may have been built to sabotage Iran's nukes.
And ever more experts are chiming in:
Last week Ralph Langner, a well-respected expert on industrial systems security, published an analysis of the worm, which targets Siemens software systems, and suggested that it may have been used to sabotage Iran's Bushehr nuclear reactor. A Siemens expert, Langner simulated a Siemens industrial network and then analyzed the worm's attack.
Experts had first thought that Stuxnet was written to steal industrial secrets -- factory formulas that could be used to build counterfeit products. But Langner found something quite different. The worm actually looks for very specific Siemens settings -- a kind of fingerprint that tells it that it has been installed on a very specific programmable logic controller (PLC) device -- and then it injects its own code into that system.
Because of the complexity of the attack, the target "must be of extremely high value to the attacker," Langner wrote in his analysis.
The evidence supporting that the attack is truly focusing on Iran is moving beyond the merely circumstantial:
This specific target may well have been Iran's Bushehr reactor, now under construction, Langner said in a blog post. Bushehr reportedly experienced delays last year, several months after Stuxnet is thought to have been created, and, according to screenshots of the plant posted by UPI, it uses the Windows-based Siemens PLC software targeted by Stuxnet.
Another article by Computerworld discusses the lack of patching of a bug which Windows promised had been fixed, yet which allowed the entry of the virus into attacked systems. One wonders why Windows may have misrepresented this weakness...
Microsoft confirmed Wednesday that it overlooked the vulnerability when it was revealed last year.
The vulnerability in Windows Print Spooler service was one of four exploited by Stuxnet, a worm that some have suggested was crafted to sabotage an Iranian nuclear reactor.
Last week, researchers at both Kaspersky Lab and Symantec, the firms that had reported the bug to Microsoft in July and August, respectively, said the print spooler vulnerability had not been publicly disclosed before they found Stuxnet was using the flaw.
Yesterday Microsoft this omission:
"Microsoft is aware of claims that the print spooler vulnerability in MS10-061 was partially discussed in a publication in April 2009," said company spokesman Dave Forstrom in an e-mail Wednesday. "These claims are accurate. Microsoft was not directly made aware of this vulnerability nor its publication at the time of release."
And for the paranoid, there are at least two other unpatched bugs which allow Stuxnet to enter any system it desires:
The security firms also notified Microsoft of two other unpatched bugs that the Stuxnet worm exploited. Those flaws, which can be used by attackers to upgrade access privileges on compromised PCs to administrator status, will be patched in a future update, Microsoft said last week. It has not set a timetable for the fixes, however.
Little information is available about the two lesser vulnerabilities. Danish bug tracker Secunia, for example, has posted only bare-bones advisories, noting that one affects Windows XP while the other affects Vista and Windows Server 2008 machines.
In other words, the entire world could very well be open to attacks by the most sophisticated targeted virus ever created, whose sole purpose may be the eradication of targets which previously involved the involvement of armed combat.
Is the face of warfare about to change forever?
0
From Yahoo:
Cyber security experts say they have identified the world’s first known cyber super weapon designed specifically to destroy a real-world target – a factory, a refinery, or just maybe a nuclear power plant.
The cyber worm, called Stuxnet, has been the object of intense study since its detection in June. As more has become known about it, alarm about its capabilities and purpose have grown. Some top cyber security experts now say Stuxnet’s arrival heralds something blindingly new: a cyber weapon created to cross from the digital realm to the physical world – to destroy something.
A brief history of Stuxnet:
Stuxnet surfaced in June and, by July, was identified as a hypersophisticated piece of malware probably created by a team working for a nation state, say cyber security experts. Its name is derived from some of the filenames in the malware. It is the first malware known to target and infiltrate industrial supervisory control and data acquisition (SCADA) software used to run chemical plants and factories as well as electric power plants and transmission systems worldwide. That much the experts discovered right away.
But what was the motive of the people who created it? Was Stuxnet intended to steal industrial secrets – pressure, temperature, valve, or other settings –and communicate that proprietary data over the Internet to cyber thieves?
And it gets much more eerie:
Since reverse engineering chunks of Stuxnet's massive code, senior US cyber security experts confirm what Mr. Langner, the German researcher, told the Monitor: Stuxnet is essentially a precision, military-grade cyber missile deployed early last year to seek out and destroy one real-world target of high importance – a target still unknown.
"Stuxnet is a 100-percent-directed cyber attack aimed at destroying an industrial process in the physical world," says Langner, who last week became the first to publicly detail Stuxnet's destructive purpose and its authors' malicious intent. "This is not about espionage, as some have said. This is a 100 percent sabotage attack."
Stuxnet is so sophisticated it may revolutionize the way modern warfare if fought entirely:
Stuxnet's ability to autonomously and without human assistance discriminate among industrial computer systems is telling. It means, says Langner, that it is looking for one specific place and time to attack one specific factory or power plant in the entire world.
"Stuxnet is the key for a very specific lock – in fact, there is only one lock in the world that it will open," Langner says in an interview. "The whole attack is not at all about stealing data but about manipulation of a specific industrial process at a specific moment in time. This is not generic. It is about destroying that process."
The virus has already spread to the point where it is safe to say most critical SCADA infrastructure may already be infected.
So far, Stuxnet has infected at least 45,000 industrial control systems around the world, without blowing them up – although some victims in North America have experienced some serious computer problems, Eric Byres, a Canadian expert, told the Monitor. Most of the victim computers, however, are in Iran, Pakistan, India, and Indonesia. Some systems have been hit in Germany, Canada, and the US, too. Once a system is infected, Stuxnet simply sits and waits – checking every five seconds to see if its exact parameters are met on the system. When they are, Stuxnet is programmed to activate a sequence that will cause the industrial process to self-destruct, Langner says.
Has Stuxnet already hit its target?It might be too late for Stuxnet's target, Langner says. He suggests it has already been hit – and destroyed or heavily damaged. But Stuxnet reveals no overt clues within its code to what it is after.
Will DEADF007 be the keyword that everyone will soon focus on?
Langner's analysis also shows, step by step, what happens after Stuxnet finds its target. Once Stuxnet identifies the critical function running on a programmable logic controller, or PLC, made by Siemens, the giant industrial controls company, the malware takes control. One of the last codes Stuxnet sends is an enigmatic “DEADF007.” Then the fireworks begin, although the precise function being overridden is not known, Langner says. It may be that the maximum safety setting for RPMs on a turbine is overridden, or that lubrication is shut off, or some other vital function shut down. Whatever it is, Stuxnet overrides it, Langner’s analysis shows.
"After the original code [on the PLC] is no longer executed, we can expect that something will blow up soon," Langner writes in his analysis. "Something big."
And the punchline - Iran's nuclear plant may have already been destroyed without anyone firing a shot anywhere:
A geographical distribution of computers hit by Stuxnet, which Microsoft produced in July, found Iran to be the apparent epicenter of the Stuxnet infections. That suggests that any enemy of Iran with advanced cyber war capability might be involved, Langner says. The US is acknowledged to have that ability, and Israel is also reported to have a formidable offensive cyber-war-fighting capability.
Could Stuxnet's target be Iran's Bushehr nuclear power plant, a facility much of the world condemns as a nuclear weapons threat?
Langner is quick to note that his views on Stuxnet's target is speculation based on suggestive threads he has seen in the media. Still, he suspects that the Bushehr plant may already have been wrecked by Stuxnet. Bushehr's expected startup in late August has been delayed, he notes, for unknown reasons. (One Iranian official blamed the delay on hot weather.)
There is much more to this story than merely creating page click inducing headlines. Computerworld itself is on the case:
A highly sophisticated computer worm that has spread through Iran, Indonesia and India was built to destroy operations at one target: possibly Iran's Bushehr nuclear reactor.
That's the emerging consensus of security experts who have examined the Stuxnet worm. In recent weeks, they have broken the cryptographic code behind the software and taken a look at how the worm operates in test environments. Researchers studying the worm all agree that Stuxnet was built by a very sophisticated and capable attacker -- possibly a nation-state -- and it was designed to destroy something big.
Though it was first developed more than a year ago, Stuxnet was discovered in July 2010, when a Belarus-based security company found the worm on computers belonging to an Iranian client. Since then it has been the subject of ongoing study by security researchers, who say they have never seen anything like it before. Now, after months of private speculation, some of the researchers who know Stuxnet best say that it may have been built to sabotage Iran's nukes.
And ever more experts are chiming in:
Last week Ralph Langner, a well-respected expert on industrial systems security, published an analysis of the worm, which targets Siemens software systems, and suggested that it may have been used to sabotage Iran's Bushehr nuclear reactor. A Siemens expert, Langner simulated a Siemens industrial network and then analyzed the worm's attack.
Experts had first thought that Stuxnet was written to steal industrial secrets -- factory formulas that could be used to build counterfeit products. But Langner found something quite different. The worm actually looks for very specific Siemens settings -- a kind of fingerprint that tells it that it has been installed on a very specific programmable logic controller (PLC) device -- and then it injects its own code into that system.
Because of the complexity of the attack, the target "must be of extremely high value to the attacker," Langner wrote in his analysis.
The evidence supporting that the attack is truly focusing on Iran is moving beyond the merely circumstantial:
This specific target may well have been Iran's Bushehr reactor, now under construction, Langner said in a blog post. Bushehr reportedly experienced delays last year, several months after Stuxnet is thought to have been created, and, according to screenshots of the plant posted by UPI, it uses the Windows-based Siemens PLC software targeted by Stuxnet.
Another article by Computerworld discusses the lack of patching of a bug which Windows promised had been fixed, yet which allowed the entry of the virus into attacked systems. One wonders why Windows may have misrepresented this weakness...
Microsoft confirmed Wednesday that it overlooked the vulnerability when it was revealed last year.
The vulnerability in Windows Print Spooler service was one of four exploited by Stuxnet, a worm that some have suggested was crafted to sabotage an Iranian nuclear reactor.
Last week, researchers at both Kaspersky Lab and Symantec, the firms that had reported the bug to Microsoft in July and August, respectively, said the print spooler vulnerability had not been publicly disclosed before they found Stuxnet was using the flaw.
Yesterday Microsoft this omission:
"Microsoft is aware of claims that the print spooler vulnerability in MS10-061 was partially discussed in a publication in April 2009," said company spokesman Dave Forstrom in an e-mail Wednesday. "These claims are accurate. Microsoft was not directly made aware of this vulnerability nor its publication at the time of release."
And for the paranoid, there are at least two other unpatched bugs which allow Stuxnet to enter any system it desires:
The security firms also notified Microsoft of two other unpatched bugs that the Stuxnet worm exploited. Those flaws, which can be used by attackers to upgrade access privileges on compromised PCs to administrator status, will be patched in a future update, Microsoft said last week. It has not set a timetable for the fixes, however.
Little information is available about the two lesser vulnerabilities. Danish bug tracker Secunia, for example, has posted only bare-bones advisories, noting that one affects Windows XP while the other affects Vista and Windows Server 2008 machines.
In other words, the entire world could very well be open to attacks by the most sophisticated targeted virus ever created, whose sole purpose may be the eradication of targets which previously involved the involvement of armed combat.
Is the face of warfare about to change forever?
0
Microsoft sells debt at record U.S. low rate
SEATTLE (Reuters) - Microsoft Corp on Wednesday sold $4.75 billion in new debt, some of it at the lowest U.S. corporate borrowing rate on record, as the world's largest software company takes advantage of low interest rates to raise cash.
The bonds -- due in three years, five years, 10 years and 30 years -- are raising money for capital expenditures, share buybacks and acquisitions, among other things, Microsoft said in a filing with securities regulators.
Microsoft sold $1 billion of the three-year notes at a coupon of 0.875 percent, or 25 basis points over comparable Treasuries, according to a source familiar with the offering. That's the lowest level in U.S. data going back to 1970 compiled by Thomson Reuters/IFR.
It means Microsoft is paying even less in interest than a government-insured savings account. The overnight average yield on a one-year certificate of deposit (CD) is 1.2 pct, according to Bankrate.com.
Blue-chip companies have swarmed to the high-grade corporate debt market this year, taking advantage of historically low funding levels.
But Microsoft struck the lowest coupon yet, beating the previous low mark of IBM's 1 percent coupon on an August offering. The next lowest, Hewlett-Packard and Procter & Gamble Co, sold three-year debt at 1.125 percent and 1.375 percent respectively this year, according to Thomson Reuters/IFR data.
Microsoft also sold $1.75 billion of its five-year bond at 40 points above comparable treasuries, $1 billion of the 10-year at 55 points above and $1 billion of the 30-year at 83 points above, according to the source.
Microsoft, which has the highest credit ratings from Standard & Poor's and Moody's, has almost $37 billion of cash on its balance sheet, but as most of that cash is overseas it prefers to borrow money at cheap rates rather than pay taxes to repatriate cash.
The offering comes a day after the company's board granted permission to issue up to $6 billion of new debt.
On Tuesday, Microsoft raised its quarterly dividend by 23 percent to 16 cents per share, disappointing some investors who had looked for more.
Its shares closed down 2.1 percent to $24.61 on the Nasdaq .
(Reporting by Bill Rigby; Editing by Chizu Nomiyama and Diane Craft)
(For more business news visit Reuters India)
The bonds -- due in three years, five years, 10 years and 30 years -- are raising money for capital expenditures, share buybacks and acquisitions, among other things, Microsoft said in a filing with securities regulators.
Microsoft sold $1 billion of the three-year notes at a coupon of 0.875 percent, or 25 basis points over comparable Treasuries, according to a source familiar with the offering. That's the lowest level in U.S. data going back to 1970 compiled by Thomson Reuters/IFR.
It means Microsoft is paying even less in interest than a government-insured savings account. The overnight average yield on a one-year certificate of deposit (CD) is 1.2 pct, according to Bankrate.com.
Blue-chip companies have swarmed to the high-grade corporate debt market this year, taking advantage of historically low funding levels.
But Microsoft struck the lowest coupon yet, beating the previous low mark of IBM's 1 percent coupon on an August offering. The next lowest, Hewlett-Packard and Procter & Gamble Co, sold three-year debt at 1.125 percent and 1.375 percent respectively this year, according to Thomson Reuters/IFR data.
Microsoft also sold $1.75 billion of its five-year bond at 40 points above comparable treasuries, $1 billion of the 10-year at 55 points above and $1 billion of the 30-year at 83 points above, according to the source.
Microsoft, which has the highest credit ratings from Standard & Poor's and Moody's, has almost $37 billion of cash on its balance sheet, but as most of that cash is overseas it prefers to borrow money at cheap rates rather than pay taxes to repatriate cash.
The offering comes a day after the company's board granted permission to issue up to $6 billion of new debt.
On Tuesday, Microsoft raised its quarterly dividend by 23 percent to 16 cents per share, disappointing some investors who had looked for more.
Its shares closed down 2.1 percent to $24.61 on the Nasdaq .
(Reporting by Bill Rigby; Editing by Chizu Nomiyama and Diane Craft)
(For more business news visit Reuters India)
Issa-is-the-GOP-man-with-a-plan-for-genuine-congressional-oversight
California Republican Rep. Darrell Issa is the ranking minority member on the House Oversight and Government Reform Committee. He may be the most effective Republican ever to serve on the little heralded panel that nevertheless has the power to change profoundly the course of government.
Issa has been thinking seriously about how congressional oversight should work and how it would function if voters return Republicans to majority status in the House in November. He issued a 16-page report this week that describes in detail just how lax the panel has been since 2008 in fulfilling its oversight duties.
Issa's approach is not strictly partisan in the traditional sense. He notes that oversight tends to be much more active and effective when one party controls Congress and the other the White House.
For the latter half of the dozen years the GOP previously held majority power in Congress (1994-2006), oversight of the executive branch was mostly an afterthought. Things improved during the short two years when Republican Bush was president and Democrats controlled Congress.
But then President Obama was elected in 2008 and Democrats controlled both ends of Pennsylvania Avenue, and they became much less interested in seeing the panel with a high profile. Issa explains why the current economic crisis has made such apathy about oversight an especially unaffordable pose:
"The unparalleled encroachment of the federal government in the private sector and the lives of individual Americans that began during the Bush Administration and continues in the Obama Administration (see, for example, the Troubled Assets Protection Program, the American Recovery and Reinvestment Act, the rapid growth of the federal workforce, and the health care and financial overhauls) has led to concerns of an oncoming tsunami of opacity, waste, fraud, and abuse," Issa said in his report.
"This trend must be met by vigorous Congressional oversight of the massive federal bureaucracy," he said, in a masterful piece of understatement.
Issa describes in clearly respectful, even admiring, terms how previous committee chairman, Rep. Henry Waxman, D-CA, approached oversight as ranking minority member prior to 2006 and in the final two years of the Bush era, but things got seriously off track after Obama took office.
Waxman left the panel and was replaced by Rep. Edolphus Towns, D-NY:
"Unfortunately, since President Obama took office 19 months ago, the country has seen the emergence of a large accountability gap," Issa said.
"Congress’ chief watchdog committee has failed repeatedly to conduct meaningful and sustained investigations and hold federal executives and bureaucrats responsible for the unprecedented levels of waste, fraud, and abuse that such rapid growth has nurtured," he said.
"Despite repeated requests by the Republican Minority for oversight hearings, joint investigations, and subpoenas, and despite myriad news reports raising allegations of waste, fraud, and other misconduct, the Oversight Committee and the Democratic-controlled Congress have overwhelmingly shunned responsible but tough oversight of the Obama administration."
Issa cites the dramatic difference in oversight energy displayed by the panel under Waxman during the final two years of the Bush administration and the first two years of the Obama administration under Towns. Waxman issued 455 official requests for information from government agencies or private citizens, compared to only 173 such requests under Towns.
The contrast is just as stark when the comparison is on committee hearings:
"With the 111th Congress scheduled to adjourn on October 8, the Oversight Committee in 2010 is set to have held significantly fewer hearings than the Committee held in the last year of the previous Congress," according to Issa.
"In 2008, the Committee, under Democratic leadership with a Republican in the White House, held 96 full committee and subcommittee hearings. Thus far this year, under Democratic leadership with a Democrat in the White House, the Committee has held or is scheduled to hold only 76 full and subcommittee hearings, a decrease of 21 percent," he said.
"Similarly, in the 110th Congress, the Oversight Committee held 74 full committee hearings; thus far in the 111th Congress, there have been only 62 full committee hearings, a decrease of 16 percent."
Perhaps the most damning indictment of the panel under Towns' chairmanship is found in Issa's noting that only 13 Obama administration officials were invited to testify in 34 hearings focused on national security and foreign affairs issues, and that Treasury Secretary Timothy Geithner did not appear at all before the committee despite its multiple hearings on economic recovery decisions in which he played a leading role.
For more on these issues, including detailed lists of issues on which GOP requests for hearings were ignored, go here.
And for an excellent analysis of how Issa's role is viewed by Democrats and by key members of the watchdog community, see this article in a recent edition of The Hill.
Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Rep-Darrell-Issa-is-the-GOP-man-with-a-plan-for-genuine-congressional-oversight-103609024.html#ixzz10LvOxVfa
Issa has been thinking seriously about how congressional oversight should work and how it would function if voters return Republicans to majority status in the House in November. He issued a 16-page report this week that describes in detail just how lax the panel has been since 2008 in fulfilling its oversight duties.
Issa's approach is not strictly partisan in the traditional sense. He notes that oversight tends to be much more active and effective when one party controls Congress and the other the White House.
For the latter half of the dozen years the GOP previously held majority power in Congress (1994-2006), oversight of the executive branch was mostly an afterthought. Things improved during the short two years when Republican Bush was president and Democrats controlled Congress.
But then President Obama was elected in 2008 and Democrats controlled both ends of Pennsylvania Avenue, and they became much less interested in seeing the panel with a high profile. Issa explains why the current economic crisis has made such apathy about oversight an especially unaffordable pose:
"The unparalleled encroachment of the federal government in the private sector and the lives of individual Americans that began during the Bush Administration and continues in the Obama Administration (see, for example, the Troubled Assets Protection Program, the American Recovery and Reinvestment Act, the rapid growth of the federal workforce, and the health care and financial overhauls) has led to concerns of an oncoming tsunami of opacity, waste, fraud, and abuse," Issa said in his report.
"This trend must be met by vigorous Congressional oversight of the massive federal bureaucracy," he said, in a masterful piece of understatement.
Issa describes in clearly respectful, even admiring, terms how previous committee chairman, Rep. Henry Waxman, D-CA, approached oversight as ranking minority member prior to 2006 and in the final two years of the Bush era, but things got seriously off track after Obama took office.
Waxman left the panel and was replaced by Rep. Edolphus Towns, D-NY:
"Unfortunately, since President Obama took office 19 months ago, the country has seen the emergence of a large accountability gap," Issa said.
"Congress’ chief watchdog committee has failed repeatedly to conduct meaningful and sustained investigations and hold federal executives and bureaucrats responsible for the unprecedented levels of waste, fraud, and abuse that such rapid growth has nurtured," he said.
"Despite repeated requests by the Republican Minority for oversight hearings, joint investigations, and subpoenas, and despite myriad news reports raising allegations of waste, fraud, and other misconduct, the Oversight Committee and the Democratic-controlled Congress have overwhelmingly shunned responsible but tough oversight of the Obama administration."
Issa cites the dramatic difference in oversight energy displayed by the panel under Waxman during the final two years of the Bush administration and the first two years of the Obama administration under Towns. Waxman issued 455 official requests for information from government agencies or private citizens, compared to only 173 such requests under Towns.
The contrast is just as stark when the comparison is on committee hearings:
"With the 111th Congress scheduled to adjourn on October 8, the Oversight Committee in 2010 is set to have held significantly fewer hearings than the Committee held in the last year of the previous Congress," according to Issa.
"In 2008, the Committee, under Democratic leadership with a Republican in the White House, held 96 full committee and subcommittee hearings. Thus far this year, under Democratic leadership with a Democrat in the White House, the Committee has held or is scheduled to hold only 76 full and subcommittee hearings, a decrease of 21 percent," he said.
"Similarly, in the 110th Congress, the Oversight Committee held 74 full committee hearings; thus far in the 111th Congress, there have been only 62 full committee hearings, a decrease of 16 percent."
Perhaps the most damning indictment of the panel under Towns' chairmanship is found in Issa's noting that only 13 Obama administration officials were invited to testify in 34 hearings focused on national security and foreign affairs issues, and that Treasury Secretary Timothy Geithner did not appear at all before the committee despite its multiple hearings on economic recovery decisions in which he played a leading role.
For more on these issues, including detailed lists of issues on which GOP requests for hearings were ignored, go here.
And for an excellent analysis of how Issa's role is viewed by Democrats and by key members of the watchdog community, see this article in a recent edition of The Hill.
Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Rep-Darrell-Issa-is-the-GOP-man-with-a-plan-for-genuine-congressional-oversight-103609024.html#ixzz10LvOxVfa
Iran is under cyber attack as Obama offers nuclear negotiations
By choosing US President Barack Obama and Iran's Mahmoud Ahmadinejad to deliver the opening addresses at the UN General Assembly session in New York Thursday, Sept. 23, the UN secretariat told the world that Iran's drive for nuclear bomb dominated world affairs at this time.
debkafile's military and intelligence sources note in this regard the US press leaks appearing since Monday, Sept. 20, which maintain that the United States has embarked on a clandestine cyber war against Iran and that Israel has established elite cyber war units for this purpose.
According to our Washington sources, Obama has resolved to deal with the nuclear impasse with Iran by going after the Islamic republic on two tracks: UN and unilateral sanctions for biting deep into the financial resources Iran has earmarked for its nuclear program, and a secret cyber war which the US is conducting jointly with Israel for crippling its nuclear facilities.
In New York, quiet exchanges are ongoing with Ahmadinejad's delegation for renewing the Six Power talks on Iran's banned uranium enrichment program. he US offer to go back to the negotiating table was made against a background of deliberately leaked revelations by US security sources to US media regarding the recruitment of Israel military and security agencies of cyber raiders with the technical knowhow and mental toughness for operating in difficult and hazardous circumstances, such as assignments for stealing or destroying enemy technology, according to one report.
debkafile's sources disclose that Israel has had special elite units carrying out such assignments for some time. Three years ago, for instance, cyber raiders played a role in the destruction of the plutonium reactor North Korea was building at A-Zur in northern Syria.
On Monday, too, the Christian Science Monitor and several American technical journals carried revelations about a new virus called Stuxnet capable of attacking and severely damaging the servers of large projects, such as power stations and nuclear reactors.
All the leaked reports agreed on three points:
1. Stuxnet is the most advanced and dangerous piece of Malware every devised.
2. The experts don't believe any private or individual hackers are capable of producing this virus, only a high-tech state such as America or Israel.
3. Although Stuxnet was identified four months ago, the only servers known to have been affected and seriously damaged are located in Iran.
Some computer security specialists report lively speculation that the virus was invented specifically to target part of the Iranian nuclear infrastructure, either the Bushehr nuclear plant activated last month or the centrifuge facility in Natanz.
debkafile's sources add: Since August, American and UN nuclear watchdog sources have been reporting a slowdown in Iran's enrichment processing due to technical problems which have knocked out a large number of centrifuges and which its nuclear technicians have been unable to repair. It is estimated that at Natanz alone, 3,000 centrifuges have been idled.
None of the reports indicate whether other parts of Iran's nuclear program have been affected by Stuxnet or the scale of the damage it may have caused.
debkafile's military and intelligence sources note in this regard the US press leaks appearing since Monday, Sept. 20, which maintain that the United States has embarked on a clandestine cyber war against Iran and that Israel has established elite cyber war units for this purpose.
According to our Washington sources, Obama has resolved to deal with the nuclear impasse with Iran by going after the Islamic republic on two tracks: UN and unilateral sanctions for biting deep into the financial resources Iran has earmarked for its nuclear program, and a secret cyber war which the US is conducting jointly with Israel for crippling its nuclear facilities.
In New York, quiet exchanges are ongoing with Ahmadinejad's delegation for renewing the Six Power talks on Iran's banned uranium enrichment program. he US offer to go back to the negotiating table was made against a background of deliberately leaked revelations by US security sources to US media regarding the recruitment of Israel military and security agencies of cyber raiders with the technical knowhow and mental toughness for operating in difficult and hazardous circumstances, such as assignments for stealing or destroying enemy technology, according to one report.
debkafile's sources disclose that Israel has had special elite units carrying out such assignments for some time. Three years ago, for instance, cyber raiders played a role in the destruction of the plutonium reactor North Korea was building at A-Zur in northern Syria.
On Monday, too, the Christian Science Monitor and several American technical journals carried revelations about a new virus called Stuxnet capable of attacking and severely damaging the servers of large projects, such as power stations and nuclear reactors.
All the leaked reports agreed on three points:
1. Stuxnet is the most advanced and dangerous piece of Malware every devised.
2. The experts don't believe any private or individual hackers are capable of producing this virus, only a high-tech state such as America or Israel.
3. Although Stuxnet was identified four months ago, the only servers known to have been affected and seriously damaged are located in Iran.
Some computer security specialists report lively speculation that the virus was invented specifically to target part of the Iranian nuclear infrastructure, either the Bushehr nuclear plant activated last month or the centrifuge facility in Natanz.
debkafile's sources add: Since August, American and UN nuclear watchdog sources have been reporting a slowdown in Iran's enrichment processing due to technical problems which have knocked out a large number of centrifuges and which its nuclear technicians have been unable to repair. It is estimated that at Natanz alone, 3,000 centrifuges have been idled.
None of the reports indicate whether other parts of Iran's nuclear program have been affected by Stuxnet or the scale of the damage it may have caused.
New Roku Units Aim Straight at the Apple TV
Mashable! — The connected-device market just got a little bit hotter; Roku has just announced its new lineup of streaming media players. ~ Competing head-to-head with the upcoming Apple TV , the Boxee Box and Google TV , Roku is hoping to entice customers to its newest units. ~ Roku is introducing three models, priced to sell at $59.99, $79.99 and $99.99. Each model supports HD streaming and has built-in wireless connectivity. The $79.99 and $99.99 models support 1080p streaming — a feature the $99 Apple TV won’t be able to match. ...More ~ Like the older Roku devices, the new boxes support a slew of content networks, including Netflix , Amazon Video On Demand, MLB.TV, Pandora, Flickr and MOG. ~ As small as the old Roku boxes were, the new units are even smaller. The Apple TV hasn’t shipped yet, so we’re not sure which device is smaller, but he new Roku is tiny and should be easy to hide away. ~ Check out a quick run-down of what each model offers: ~ Roku HD ~ Priced at $59.99, this entry-level Roku box supports 720p streaming and has built-in ethernet and 802.11 b/g and supports 5.1 surround sound. It includes both HDMI and composite video, so you can use this on standard-definition TVs or on newer models. ~ Roku XD ~ At $79.99, the mid-tier Roku box jumps from 720p to 1080p and gains extended range Wireless-N Wi-Fi support, plus the ability to do stuff like instant-replay with the new enhanced Roku remote. ~ Roku XDS ~ The $99.99 Roku XDS is priced the same as the Apple TV, but it offers 1080p HD streaming and dual-band extended range Wireless-N Wi-Fi. It can also play content via a USB drive. ~ The ability to play back external content is completely new for Roku. Using USB, customers can play stored music, photos and 1080p video. Roku will be introducing this new feature as part of a free software update, which we expect to roll out in November. ~ Taking on the Apple TV Head-onIt’s hard not to compare the new Roku units with Apple’s upcoming Apple TV. Both units offers similar capabilities and are of a s... ...Less
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Pay for the Subway Using Your iPhone
Mashable! — Visa has just rolled out a new pilot program that allows New Yorkers to pay subway, bus and train fares with a wave of their iPhones. ~ New York City Transit, NJ TRANSIT and the Port Authority of New York and New Jersey are participating in the pilot program. As part of the program, Visa is testing both payment cards and Visa payWave -enabled smartphones. ~ Rather than having to buy or refill a Metro card, travelers can just wave their phones in front of a contactless reader. ~ As we reported last month, Visa is also working with Bank of America to bring smartphone payments to retailers in New York City. ~ Smartphones that are equipped with a special sensor can transmit payment information to contactless card readers at fare gates. Not only does this help people get through transit stations more quickly; it also eliminates the need to buy a transit card or dig around in your purse for your existing pass. ~ Check out this video that Visa produced to show the smartWave wireless payment option
Buyers Send iPhones on a Long Relay to China
They show up in the early-morning hours: Chinese men and women, waiting silently and somewhat nervously outside of Apple stores in New York. On some days the lines they form can be a block long.
These are not typical Apple fans. Instead they are participants in a complex and curious trade driven by China’s demand for Apple’s fashionable gadgets — products that are made in China in the first place and exported, only to make the long trip back.
Participants in New York and Shanghai say the process works like this: People wait in line at an Apple store to buy the newest iPhone for $600, paying a premium to skip the AT&T contract. They then sell the phones to middlemen, usually at electronics stores in Chinatown, for about $750.
The phones are shipped off to China, where the iPhone 4 is not yet on sale, and are distributed to local shops and e-commerce sites, where they sell for as much as $1,000. Once the phones have been “unlocked” to break their ties to AT&T, they can be used with local carriers.
But a change to this practice is coming. On Saturday, the iPhone 4 will go on sale in China, priced at about $750 for the 16-gigabyte version.
Most people in China can only dream of being able to afford an expensive phone. But millions of Chinese are developing a taste for luxury goods, and Apple products have joined Louis Vuitton bags as totems of wealth, said Shang-Jin Wei, director of the Jerome A. Chazen Institute of International Business at Columbia Business School.
“These trading networks have been around for a long time,” Professor Wei said. “They have recently become a lot more pervasive due to rising incomes in China — partially as a result of exports to the U.S.”
An Apple spokesman would not discuss the systematic iPhone purchases at Apple stores, but the company has tried to put a stop to them — and has found it difficult to do so.
In June, the company came under fire in New York State for refusing to sell the iPhone 4 to some Asian customers. Andrew M. Cuomo, the New York attorney general, opened an investigation into the matter, and Apple apparently backed off.
Those waiting in line in New York were not eager to talk about their mission or to identify themselves. When asked what they are doing, the stock answer was always the same: “I’m buying the iPhone for a friend.” Some buy a phone, conceal it in a bag and go back into the store to buy another. A man who was asked what the second phone was for explained: “I have two friends.”
Apple limits purchases to two iPhones a person, and to discourage repeat visits it keeps a record of credit cards used, though cash purchases are not tracked. Apple says the limit “helps us ensure that there are enough iPhones for people who are shopping for themselves or buying a gift.”
The iPhone 4 went on sale in the United States in June, but it is still in such demand that many stores quickly sell out of new shipments.
The buy-and-export scheme is not limited to New York. There have been anecdotal reports of similar efforts elsewhere. Kate Peters of Durham, N.C., said she was visiting an Apple store in a mall there last month when she saw “an Asian woman with a group of college-age Chinese men,” perhaps eight of them. They all bought iPhones and iPads, paying with $100 bills, though they seemed unfamiliar with the currency, Ms. Peters said.
The iPhone trade appears to be widely known in New York’s Chinese community. An older Chinese man sitting on a stoop in the Sunset Park neighborhood of Brooklyn, who said he worked seven days a week as a cook, said the opportunity was too enticing for low-income immigrants to pass up.
“Many workers make a few dollars an hour working in restaurants or factories,” he said. “If they wait in line for an hour at the Apple store to buy and sell phones, they can make $300 in a single morning.” For many, he said, this is equivalent to an average week’s pay.
IPhone sellers in China say the phones are often brought into the country by people who hide them in their bags or even tape them to their bodies. More organized smugglers will bring in 100 or more iPhones a day, and some will put phones into a shipping container with other goods.
“It’s all about connections and channels,” said one seller at the Sleepless Mall, a big electronics market in Shanghai where wholesalers distribute phones to sellers in small stalls. “Once you have good relationships with customs and airline companies, you can ship whatever products you like. We smuggle it both by air and by boat.”
The buyers are willing to admit that the phone’s allure has a lot to do with the status it conveys. A 26-year-old woman in Shanghai who works for a media company said she had waited several weeks to get the iPhone 4, explaining that “Apple is a sign of coolness.”
A college freshman at the Sleepless Mall said he had tried to order an iPhone from Hong Kong, then bought one at the mall. “Since there are very few people using it, it’s so cool to have one,” he said.
But on Saturday, when the iPhone goes on sale in China, it will have ripple effects abroad. This is already pushing down prices of smuggled phones.
Professor Wei said the legitimate sales would cut into the smugglers’ profits but would not wipe them out. He said every aspect of the pricing and availability of the iPhone in China had been calculated to make it a highly sought product.
“Apple knows exactly how much these products are selling for on the black market in China, and the company will price its products accordingly,” Professor Wei said. “Limiting the sale of the iPhone until now in China is likely part of a bigger corporate strategy to make it a luxury product that people will pay higher prices for.”
If that is Apple’s strategy, it has had some unexpected side effects. The scrutiny that Apple store employees have given to Asian customers in New York has led some to complain of discrimination.
Grace Meng, a New York State assemblywoman whose district in Queens includes the Flushing neighborhood, said some of her constituents had approached her office after being told they could not buy the iPhone 4.
“I don’t deny that there is a serious concern that Apple has,” Ms. Meng said. “We just want to make sure that no one is singled out because of their ethnicity or because they don’t speak perfect English.”
Ms. Meng forwarded the complaints to the attorney general’s office, where a spokesman, John Milgrim, said the inquiry “remains an ongoing investigation.”
David Barboza contributed reporting. Chen Xiaoduan and Flora Zhang contributed research.
These are not typical Apple fans. Instead they are participants in a complex and curious trade driven by China’s demand for Apple’s fashionable gadgets — products that are made in China in the first place and exported, only to make the long trip back.
Participants in New York and Shanghai say the process works like this: People wait in line at an Apple store to buy the newest iPhone for $600, paying a premium to skip the AT&T contract. They then sell the phones to middlemen, usually at electronics stores in Chinatown, for about $750.
The phones are shipped off to China, where the iPhone 4 is not yet on sale, and are distributed to local shops and e-commerce sites, where they sell for as much as $1,000. Once the phones have been “unlocked” to break their ties to AT&T, they can be used with local carriers.
But a change to this practice is coming. On Saturday, the iPhone 4 will go on sale in China, priced at about $750 for the 16-gigabyte version.
Most people in China can only dream of being able to afford an expensive phone. But millions of Chinese are developing a taste for luxury goods, and Apple products have joined Louis Vuitton bags as totems of wealth, said Shang-Jin Wei, director of the Jerome A. Chazen Institute of International Business at Columbia Business School.
“These trading networks have been around for a long time,” Professor Wei said. “They have recently become a lot more pervasive due to rising incomes in China — partially as a result of exports to the U.S.”
An Apple spokesman would not discuss the systematic iPhone purchases at Apple stores, but the company has tried to put a stop to them — and has found it difficult to do so.
In June, the company came under fire in New York State for refusing to sell the iPhone 4 to some Asian customers. Andrew M. Cuomo, the New York attorney general, opened an investigation into the matter, and Apple apparently backed off.
Those waiting in line in New York were not eager to talk about their mission or to identify themselves. When asked what they are doing, the stock answer was always the same: “I’m buying the iPhone for a friend.” Some buy a phone, conceal it in a bag and go back into the store to buy another. A man who was asked what the second phone was for explained: “I have two friends.”
Apple limits purchases to two iPhones a person, and to discourage repeat visits it keeps a record of credit cards used, though cash purchases are not tracked. Apple says the limit “helps us ensure that there are enough iPhones for people who are shopping for themselves or buying a gift.”
The iPhone 4 went on sale in the United States in June, but it is still in such demand that many stores quickly sell out of new shipments.
The buy-and-export scheme is not limited to New York. There have been anecdotal reports of similar efforts elsewhere. Kate Peters of Durham, N.C., said she was visiting an Apple store in a mall there last month when she saw “an Asian woman with a group of college-age Chinese men,” perhaps eight of them. They all bought iPhones and iPads, paying with $100 bills, though they seemed unfamiliar with the currency, Ms. Peters said.
The iPhone trade appears to be widely known in New York’s Chinese community. An older Chinese man sitting on a stoop in the Sunset Park neighborhood of Brooklyn, who said he worked seven days a week as a cook, said the opportunity was too enticing for low-income immigrants to pass up.
“Many workers make a few dollars an hour working in restaurants or factories,” he said. “If they wait in line for an hour at the Apple store to buy and sell phones, they can make $300 in a single morning.” For many, he said, this is equivalent to an average week’s pay.
IPhone sellers in China say the phones are often brought into the country by people who hide them in their bags or even tape them to their bodies. More organized smugglers will bring in 100 or more iPhones a day, and some will put phones into a shipping container with other goods.
“It’s all about connections and channels,” said one seller at the Sleepless Mall, a big electronics market in Shanghai where wholesalers distribute phones to sellers in small stalls. “Once you have good relationships with customs and airline companies, you can ship whatever products you like. We smuggle it both by air and by boat.”
The buyers are willing to admit that the phone’s allure has a lot to do with the status it conveys. A 26-year-old woman in Shanghai who works for a media company said she had waited several weeks to get the iPhone 4, explaining that “Apple is a sign of coolness.”
A college freshman at the Sleepless Mall said he had tried to order an iPhone from Hong Kong, then bought one at the mall. “Since there are very few people using it, it’s so cool to have one,” he said.
But on Saturday, when the iPhone goes on sale in China, it will have ripple effects abroad. This is already pushing down prices of smuggled phones.
Professor Wei said the legitimate sales would cut into the smugglers’ profits but would not wipe them out. He said every aspect of the pricing and availability of the iPhone in China had been calculated to make it a highly sought product.
“Apple knows exactly how much these products are selling for on the black market in China, and the company will price its products accordingly,” Professor Wei said. “Limiting the sale of the iPhone until now in China is likely part of a bigger corporate strategy to make it a luxury product that people will pay higher prices for.”
If that is Apple’s strategy, it has had some unexpected side effects. The scrutiny that Apple store employees have given to Asian customers in New York has led some to complain of discrimination.
Grace Meng, a New York State assemblywoman whose district in Queens includes the Flushing neighborhood, said some of her constituents had approached her office after being told they could not buy the iPhone 4.
“I don’t deny that there is a serious concern that Apple has,” Ms. Meng said. “We just want to make sure that no one is singled out because of their ethnicity or because they don’t speak perfect English.”
Ms. Meng forwarded the complaints to the attorney general’s office, where a spokesman, John Milgrim, said the inquiry “remains an ongoing investigation.”
David Barboza contributed reporting. Chen Xiaoduan and Flora Zhang contributed research.
Facebook Hopes Credits Make Dollars
PALO ALTO, Calif. — For all its success, Google is often criticized for being a one-trick pony. After 12 years, the Internet search company is still struggling to find a significant new revenue source to supplement its lucrative text advertising business.
Facebook, which more than any other company aspires to usurp Google’s dominant place on the Internet, hopes to avoid that problem. Already on the path to becoming an advertising powerhouse, the social networking company is laying the groundwork for its second act: a virtual currency system that some day could turn into a multibillion-dollar business.
Facebook began testing its virtual currency, called Credits, more than a year ago with some popular games on Facebook. This month, Credits passed a milestone when it became the exclusive payment method for most of the games created by Zynga, the No. 1 developer of Facebook applications.
Zynga is expected to have $500 million in revenue this year, according to the Inside Network, which tracks Facebook applications, as millions of users pay real money to buy virtual goods on games like FarmVille and Mafia Wars. Through Credits, Facebook will take a 30 percent cut.
By the end of the year, Facebook expects that Credits will be used to buy the vast majority of virtual goods sold on Facebook. The fast-growing market is expected to reach $835 million on Facebook this year, according to the Inside Network. To bolster that market, Facebook began selling Credits gift cards at Target stores across the country this month.
For now, Facebook says it simply wants Credits to help foster the growth of virtual goods transactions. But Mark Zuckerberg, the chief executive, said recently that the company may choose to do “a lot more” with Credits in the future. Over time, the company plans to turn Credits into a system for micropayments that could be open to any application on Facebook, be it a game or perhaps a media company, people with direct knowledge of Facebook’s plans said. They spoke anonymously because the plans have not been announced publicly.
In addition to games, which account for the vast majority of money spent on Facebook, more than a million other applications run on the site. In the future, many of those may choose to charge for access to certain features or to things like music, videos or news articles.
Some analysts and industry insiders say that expanding Credits makes sense and could eventually put Facebook in competition with PayPal, Google, Amazon and others for a slice of the growing pie of online transactions.
“If they can get 50 million registered credit cards, why wouldn’t they use them to pay for your newspaper subscription?” said Alex Rampell, the chief executive of TrialPay, an advertising company that offers free Facebook Credits to people who buy certain products.
Others say the potential for using Credits could extend beyond the Facebook site, through Facebook Connect, a service that allows users to log in to sites across the Web using their Facebook identities.
“There is a huge opportunity for Facebook to use Facebook Connect to offer seamless checkout on other sites,” said Ron Hirson, a senior vice president at Boku, a start-up company that enables online payments using a cellphone. “They are focusing on games and apps now, but it would make sense for them to go into other” product categories.
For now, Facebook prefers to play down talk of its broader ambitions for Credits. Dan Rose, Facebook’s vice president for partnerships and platform marketing, talks about the usefulness of Credits while playing Facebook games. Users will have a single currency they can spend on any game, sparing them the trouble of entering the credit card or PayPal credentials multiple times, he says. Currently users can buy Credits with 15 currencies, including the United States dollars, the euro, the British pound, the Venezuelan bolivar and the Danish krone
It works much like Apple’s App Store, which allows users to enter their credit cards or PayPal accounts once and buy applications from any developer. Apple also takes a 30 percent cut of sales on iTunes and its app store.
Mr. Rose said that while some developers might initially see a decline in revenue because of Facebook’s commission, the plan is for Credits to more than offset that loss over time, because Credits will make it easier to spend more in a game.
“We need to be able to grow the total level of money spent,” Mr. Rose said. Facebook is also helping lubricate the system by giving its developers credits that they can give away to users.
Some developers say they already have made gains. “We are seeing the number of paying users increase and the revenue per user increase, and FB deserves a lot of the credit for it,” said Mark Hull, vice president for marketing at CrowdStar, whose Happy Aquarium game is among the most popular on Facebook.
Mr. Rose said that if Facebook succeeded, Credits “could grow it to a size where over time it will become a material revenue generator.” For now, he said, Facebook plans to reinvest revenue from Credits into improving its software for developers.
But Facebook’s ambitions are unmistakable. Credits is backed by a sizable engineering and product team that is full of PayPal veterans.
“It is a lot like PayPal in the early days,” said Deb Liu, a former director of corporate strategy at PayPal who is now product marketing manager for Credits. “We are moving fast and changing the industry.”
For now, Credits is not a rival to PayPal or other payment systems. In February, Facebook signed an agreement with PayPal, a unit of eBay, making PayPal one of the preferred ways to finance Credits accounts. Facebook users can buy Credits using their credit cards and some mobile payments services.
Since Zynga was one of PayPal’s largest customers, Facebook is now a significant customer as well. “Facebook has been a great partner,” Osama Bedier, PayPal’s vice president for platform, said.
But as Credits expands beyond Facebook games, it could collide with a number of others competing for a piece of the growing commerce in digital goods. They include Apple, the leading seller of music and apps; Google, whose Checkout system is used in e-commerce and on the company’s app store for mobile phones; and even Amazon, which is seeking to expand its payment system across the Web.
Analysts said Facebook’s ambitions might well run into the same obstacles that have thwarted Google and Amazon as they have sought to expand across the Web.
“Facebook is a very innovative company, but we have had two large innovative companies, Google and Amazon, that have spent a fair amount of effort on payments,” said Mark Mahaney, an analyst at Citigroup. Those companies have yet to gain much traction, he said. “I have to think that the odds against Facebook are steep.”
Facebook, which more than any other company aspires to usurp Google’s dominant place on the Internet, hopes to avoid that problem. Already on the path to becoming an advertising powerhouse, the social networking company is laying the groundwork for its second act: a virtual currency system that some day could turn into a multibillion-dollar business.
Facebook began testing its virtual currency, called Credits, more than a year ago with some popular games on Facebook. This month, Credits passed a milestone when it became the exclusive payment method for most of the games created by Zynga, the No. 1 developer of Facebook applications.
Zynga is expected to have $500 million in revenue this year, according to the Inside Network, which tracks Facebook applications, as millions of users pay real money to buy virtual goods on games like FarmVille and Mafia Wars. Through Credits, Facebook will take a 30 percent cut.
By the end of the year, Facebook expects that Credits will be used to buy the vast majority of virtual goods sold on Facebook. The fast-growing market is expected to reach $835 million on Facebook this year, according to the Inside Network. To bolster that market, Facebook began selling Credits gift cards at Target stores across the country this month.
For now, Facebook says it simply wants Credits to help foster the growth of virtual goods transactions. But Mark Zuckerberg, the chief executive, said recently that the company may choose to do “a lot more” with Credits in the future. Over time, the company plans to turn Credits into a system for micropayments that could be open to any application on Facebook, be it a game or perhaps a media company, people with direct knowledge of Facebook’s plans said. They spoke anonymously because the plans have not been announced publicly.
In addition to games, which account for the vast majority of money spent on Facebook, more than a million other applications run on the site. In the future, many of those may choose to charge for access to certain features or to things like music, videos or news articles.
Some analysts and industry insiders say that expanding Credits makes sense and could eventually put Facebook in competition with PayPal, Google, Amazon and others for a slice of the growing pie of online transactions.
“If they can get 50 million registered credit cards, why wouldn’t they use them to pay for your newspaper subscription?” said Alex Rampell, the chief executive of TrialPay, an advertising company that offers free Facebook Credits to people who buy certain products.
Others say the potential for using Credits could extend beyond the Facebook site, through Facebook Connect, a service that allows users to log in to sites across the Web using their Facebook identities.
“There is a huge opportunity for Facebook to use Facebook Connect to offer seamless checkout on other sites,” said Ron Hirson, a senior vice president at Boku, a start-up company that enables online payments using a cellphone. “They are focusing on games and apps now, but it would make sense for them to go into other” product categories.
For now, Facebook prefers to play down talk of its broader ambitions for Credits. Dan Rose, Facebook’s vice president for partnerships and platform marketing, talks about the usefulness of Credits while playing Facebook games. Users will have a single currency they can spend on any game, sparing them the trouble of entering the credit card or PayPal credentials multiple times, he says. Currently users can buy Credits with 15 currencies, including the United States dollars, the euro, the British pound, the Venezuelan bolivar and the Danish krone
It works much like Apple’s App Store, which allows users to enter their credit cards or PayPal accounts once and buy applications from any developer. Apple also takes a 30 percent cut of sales on iTunes and its app store.
Mr. Rose said that while some developers might initially see a decline in revenue because of Facebook’s commission, the plan is for Credits to more than offset that loss over time, because Credits will make it easier to spend more in a game.
“We need to be able to grow the total level of money spent,” Mr. Rose said. Facebook is also helping lubricate the system by giving its developers credits that they can give away to users.
Some developers say they already have made gains. “We are seeing the number of paying users increase and the revenue per user increase, and FB deserves a lot of the credit for it,” said Mark Hull, vice president for marketing at CrowdStar, whose Happy Aquarium game is among the most popular on Facebook.
Mr. Rose said that if Facebook succeeded, Credits “could grow it to a size where over time it will become a material revenue generator.” For now, he said, Facebook plans to reinvest revenue from Credits into improving its software for developers.
But Facebook’s ambitions are unmistakable. Credits is backed by a sizable engineering and product team that is full of PayPal veterans.
“It is a lot like PayPal in the early days,” said Deb Liu, a former director of corporate strategy at PayPal who is now product marketing manager for Credits. “We are moving fast and changing the industry.”
For now, Credits is not a rival to PayPal or other payment systems. In February, Facebook signed an agreement with PayPal, a unit of eBay, making PayPal one of the preferred ways to finance Credits accounts. Facebook users can buy Credits using their credit cards and some mobile payments services.
Since Zynga was one of PayPal’s largest customers, Facebook is now a significant customer as well. “Facebook has been a great partner,” Osama Bedier, PayPal’s vice president for platform, said.
But as Credits expands beyond Facebook games, it could collide with a number of others competing for a piece of the growing commerce in digital goods. They include Apple, the leading seller of music and apps; Google, whose Checkout system is used in e-commerce and on the company’s app store for mobile phones; and even Amazon, which is seeking to expand its payment system across the Web.
Analysts said Facebook’s ambitions might well run into the same obstacles that have thwarted Google and Amazon as they have sought to expand across the Web.
“Facebook is a very innovative company, but we have had two large innovative companies, Google and Amazon, that have spent a fair amount of effort on payments,” said Mark Mahaney, an analyst at Citigroup. Those companies have yet to gain much traction, he said. “I have to think that the odds against Facebook are steep.”
Wednesday, September 22, 2010
Obama Tricks Voters as Enron Hoodwinked Public:
The debate concerning the top tax rate for wealthier Americans is so difficult in part because most people only pretend to know the actual figure.
Sure, we all know Republicans want to keep the top rate at its current level while Democrats prefer to let the George W. Bush-era rate cuts expire. And some of us may even know that the tax code’s current 35 percent figure would rise to 39.6 percent if President Barack Obama gets his way.
Beyond that, we get hazy. And no wonder: other sections of the tax code combine with the statutory rate in mysterious ways, creating a different effective top marginal rate. These include, for example, phaseouts known as Pease and PEP, under which itemized deductions and personal exemptions fade. If you really want to capture the top taxpayer’s situation, you have to add state taxes into the mix. So what’s the exact top rate? Nobody knows. Or, maybe, nobody wants to know.
I asked the biggest, baddest tax mind I know, former Congressional Budget Office director Douglas Holtz-Eakin, to tell what he thinks the top tax is. Even Holtz-Eakin approximated, texting back a formula that might serve as the theme song for tax year 2011: “39.6 + 2 (phaseout of pep and pease) + 3.8 (Medicare net investment income tax) = 45.4. Add in state-level taxes and 50 is easy to reach.”
Holtz-Eakin is a genius. If he’s approximating, it’s because he can’t bear to feel the pain of the precise reality.
Illusion of Fairness
So how did we get here? Politicians love progressive rate structures. First, they appear to be fair. We’ve all heard President Obama invoking fairness in defense of the 39.6 rate he seeks. A second, greater advantage of progressive rates is their complexity. The staircase concept of rates rising on successive income tranches is hard enough. Add in all the traps and breaks and taxpayers become truly confused and give up protesting.
What’s at work here is the same phenomenon that caused otherwise sentient members of Enron’s audit committee to go along with executives Andrew Fastow and Jeff Skilling: fear of looking stupid. Given a choice between seeming like dummies or paying more money than they think they should, people often choose the latter.
For the first quarter century or so of its existence, lawmakers didn’t dare impose the income tax on the average earner. Only when World War II broke out did this class tax become a mass tax. And then two extra tricks were necessary for the transition. First, many taxpayers were hardly in a position to resist a shift in the code since they were already government captives: draftees. Second, withholding was introduced. Soldiers never knew how much they were taxed because part of their income never even made it into their pockets.
Selling the Structure
After the war, the feds found new ways to justify and complicate our tax system. They marketed progressivity as a necessity for the nation’s general welfare. The very name itself helped. Many people don’t want to oppose political progressives, so they go along with the idea of a progressive tax structure. Even those who reject progressive politics may not want to be caught opposing something that sounds like progress. The progressivity brand was so successful that government was able to keep the top rate at more than 70 percent for decades.
But did postwar Americans really endorse, or even understand, that progressive principle? This was less clear. Two skeptics were Harry Kalven and Walter Blum of the University of Chicago. They set out to make the case for progressivity but found the argument so weak they titled their 1953 book “The Uneasy Case for Progressive Taxation.”
Taxing Experiment
In the 1990s, scholars designed an experiment to see whether people understood the difference between progressive structures, under which rates go up as people earn more, and proportional ones, under which higher earners pay taxes at the same rate as lower earners.
Michael Roberts, Cassie Bradley and Peggy Hite asked college students abstract questions: “Are progressive tax rates more or less fair than flat tax rates?” By a margin of almost 4 to 1, students said they preferred a progressive rate system for society. Next the researchers gave the same students concrete examples of a paired set of two earners with different salaries and possible tax bills for those earners, asking which tax amount the earners should pay. By a margin of 4 to 1, the same students picked tax amounts for the higher earner that corresponded to a flat rate, or even a regressive, system. Remarkably, these subjects were accounting students who had already studied these various systems.
The point isn’t that taxpayers are stupid. Rather, they are stupefied and conflicted. On a gut level, they may not necessarily agree with the basic principle of modern taxation. “Overall, our results indicate the existence of a norm for proportionality…” concluded Roberts, Bradley and Hite. Lawmakers may want to drag the country into a new higher tax era. But they shouldn’t console themselves that there’s consensus for such a change, when there may not be.
(Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations, is a Bloomberg News columnist. The opinions expressed are her own.)
To contact the writer of this column: Amity Shlaes at amityshlaes@hotmail.com
To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net.
Sure, we all know Republicans want to keep the top rate at its current level while Democrats prefer to let the George W. Bush-era rate cuts expire. And some of us may even know that the tax code’s current 35 percent figure would rise to 39.6 percent if President Barack Obama gets his way.
Beyond that, we get hazy. And no wonder: other sections of the tax code combine with the statutory rate in mysterious ways, creating a different effective top marginal rate. These include, for example, phaseouts known as Pease and PEP, under which itemized deductions and personal exemptions fade. If you really want to capture the top taxpayer’s situation, you have to add state taxes into the mix. So what’s the exact top rate? Nobody knows. Or, maybe, nobody wants to know.
I asked the biggest, baddest tax mind I know, former Congressional Budget Office director Douglas Holtz-Eakin, to tell what he thinks the top tax is. Even Holtz-Eakin approximated, texting back a formula that might serve as the theme song for tax year 2011: “39.6 + 2 (phaseout of pep and pease) + 3.8 (Medicare net investment income tax) = 45.4. Add in state-level taxes and 50 is easy to reach.”
Holtz-Eakin is a genius. If he’s approximating, it’s because he can’t bear to feel the pain of the precise reality.
Illusion of Fairness
So how did we get here? Politicians love progressive rate structures. First, they appear to be fair. We’ve all heard President Obama invoking fairness in defense of the 39.6 rate he seeks. A second, greater advantage of progressive rates is their complexity. The staircase concept of rates rising on successive income tranches is hard enough. Add in all the traps and breaks and taxpayers become truly confused and give up protesting.
What’s at work here is the same phenomenon that caused otherwise sentient members of Enron’s audit committee to go along with executives Andrew Fastow and Jeff Skilling: fear of looking stupid. Given a choice between seeming like dummies or paying more money than they think they should, people often choose the latter.
For the first quarter century or so of its existence, lawmakers didn’t dare impose the income tax on the average earner. Only when World War II broke out did this class tax become a mass tax. And then two extra tricks were necessary for the transition. First, many taxpayers were hardly in a position to resist a shift in the code since they were already government captives: draftees. Second, withholding was introduced. Soldiers never knew how much they were taxed because part of their income never even made it into their pockets.
Selling the Structure
After the war, the feds found new ways to justify and complicate our tax system. They marketed progressivity as a necessity for the nation’s general welfare. The very name itself helped. Many people don’t want to oppose political progressives, so they go along with the idea of a progressive tax structure. Even those who reject progressive politics may not want to be caught opposing something that sounds like progress. The progressivity brand was so successful that government was able to keep the top rate at more than 70 percent for decades.
But did postwar Americans really endorse, or even understand, that progressive principle? This was less clear. Two skeptics were Harry Kalven and Walter Blum of the University of Chicago. They set out to make the case for progressivity but found the argument so weak they titled their 1953 book “The Uneasy Case for Progressive Taxation.”
Taxing Experiment
In the 1990s, scholars designed an experiment to see whether people understood the difference between progressive structures, under which rates go up as people earn more, and proportional ones, under which higher earners pay taxes at the same rate as lower earners.
Michael Roberts, Cassie Bradley and Peggy Hite asked college students abstract questions: “Are progressive tax rates more or less fair than flat tax rates?” By a margin of almost 4 to 1, students said they preferred a progressive rate system for society. Next the researchers gave the same students concrete examples of a paired set of two earners with different salaries and possible tax bills for those earners, asking which tax amount the earners should pay. By a margin of 4 to 1, the same students picked tax amounts for the higher earner that corresponded to a flat rate, or even a regressive, system. Remarkably, these subjects were accounting students who had already studied these various systems.
The point isn’t that taxpayers are stupid. Rather, they are stupefied and conflicted. On a gut level, they may not necessarily agree with the basic principle of modern taxation. “Overall, our results indicate the existence of a norm for proportionality…” concluded Roberts, Bradley and Hite. Lawmakers may want to drag the country into a new higher tax era. But they shouldn’t console themselves that there’s consensus for such a change, when there may not be.
(Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations, is a Bloomberg News columnist. The opinions expressed are her own.)
To contact the writer of this column: Amity Shlaes at amityshlaes@hotmail.com
To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net.
Friday, September 17, 2010
States working harder to collect online sales taxes
It’s too early to know exactly how much the Nebraska chapter of the March of Dimes raised this week at its annual Signature Chefs Auction in Omaha, but odds are that more than 10 percent of the charity’s proceeds are going straight to the tax man.
That’s because the March of Dimes went online when it bought about 4,000 T-shirts from a Florida vendor to give to donors during its March for Babies Walk last April. The charity often buys supplies and other materials online, and it also raises money online by selling items at auction — racking up a big tax bill in each case.
“We didn’t know that,” said Rosemary Opbroek, director of the Nebraska chapter. “We wish the law was different. It is taking money away from helping ... babies.”
An msnbc.com-NBC News special report
Alex Johnson is a reporter for msnbc.com. The following NBC stations contributed to this report: KOAA of Colorado Springs, Colo.; WCBD of Charleston, S.C.; WJHG of Panama City, Fla.; WOWT of Omaha, Neb.; WPMI of Mobile, Ala.; WWBT of Richmond, Va.; and WYFF of Greenville, S.C.
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.Specifically, it is taking away about $26,000, the amount the State of Nebraska says the March of Dimes owes for unpaid taxes on the April purchase and other online transactions over the past five years.
Opbroek acknowledged that “we owe the money,” which she said would have to come out of proceeds from this week’s fundraiser. Assuming the final tally is the same as last year’s, about $215,000, the state tax bill will eat up nearly 13 percent of the donations.
The law the March of Dimes stumbled over is similar to statutes in most other states — arcane regulations that mean you are probably a tax scofflaw, along with just about everybody else who has bought something online. That’s roughly 80 percent of all U.S. adults, Nielsen Online calculates.
The reasons are complicated, because they involve variations in tax codes in the 46 states (plus the District of Columbia) that collect sales taxes, not to mention thousands of local tax regulations across the country. That leads to confusion even among advocates for or against enforcing existing tax policies on online purchases, which are often misleadingly characterized as attempts to “create” a new “Internet sales tax.”
It’s not a new tax
Although some online commerce advocacy groups like to label the Streamlined Sales and Use Tax Agreement (SSTUA) and similar projects as “new Internet taxes,” they’re not. The Internet Tax Freedom Act of 1998 prevents state and local governments from imposing “new or discriminatory taxes” on online transactions. It is scheduled to remain in effect until at least 2014. The SSTUA seeks to simplify and enforce the collection of taxes that are already on the books but haven’t been collected because of complicated distinctions laid down in the Supreme Court’s 1992 decision in Quill v. North Dakota.
• Read the 1992 decision
.Sales taxes or similar levies have always been in place on most online purchases in most states. But they are almost never paid. And with their budgets in crisis, states are more determined than ever to get their share.
Do you have a ‘physical nexus’?
The confusion boils down to who does the collecting and when. As with everything involving tax legislation, there are exceptions and other complications from state to state. For example, if you live in Delaware, Montana, New Hampshire or Oregon, which have no sales taxes, none of this applies.
Under a 1992 Supreme Court ruling, businesses are responsible for collecting sales taxes on every sale they make in a state where they have a “physical nexus.” In other words, if the business has a store, an office or even a single sales rep in your state, it’s supposed to tack the state’s sales tax onto your bill.
Online retailers like Amazon.com typically don’t add the tax, except in the states where they’re based or where they have physical facilities like warehouses or distribution centers. Amazon, for example, collects sales taxes only in Washington (its home state), Kansas, Kentucky, North Dakota and New York.
The tax is still supposed to be paid, however. And if the seller’s not responsible, then you, the buyer, are. In general, you’re supposed to voluntarily file your own report and pay the standard tax on your out-of-state online purchases. (The appropriate forms are available on state tax agency websites, revenue officials are happy to remind you.)
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..But it turns out that the vast majority of Americans are completely unaware of those rules, so the forms don’t get filed and the taxes don’t get paid — to the tune of $8.6 billion in 2010 alone, the National Conference of State Legislatures estimates.
That’s a big problem, because sales taxes (as they’re called when they’re handled by a retailer) and use taxes (as they’re called when the customer handles them after an out-of-state transaction) most often pay for schools and public safety.
NCSL data sheet: Uncollected taxes on out-of state sales (PDF)
“It’s just a lack of education,” said Adrienne Fairwell, a spokeswoman for the South Carolina Department of Revenue, which is estimated to have missed out on $94 million in uncollected online taxes last year.
“There are taxpayers that are willing to comply with the law and remit the appropriate amount of taxes that are due, but they don’t know that that’s what they’re supposed to be doing,” Fairwell said.
South Carolina, like most states, relies on consumers to be honest. But if you happen to be audited and you haven’t paid up, you could be in for a world of hurt.
“The Department of Revenue realizes that there is concern and there are issues with collecting the use tax,” Fairwell said. “But we aggressively go after that.”
‘Amazon laws’ draw support
As the economic downturn has gouged ever-bigger holes in their budgets, officials have started to turn up the heat. That’s why Nebraska Tax Commissioner Douglas A. Ewald went after the March of Dimes — one of several charities he said the state is pursuing.
Numerous other states are considering legislation or studying proposals that would crack down on non-payment of online taxes:
•The Alabama Department of Revenue is sending letters to random taxpayers, telling them to review their last three years of online purchases and send in a check. •In February, Colorado enacted the so-called Amazon law, declaring that online retailers were part of an “economic nexus” with state residents. Under the law — which has been challenged in federal court — Amazon and other online retailers are required to calculate the sales tax on every transaction and tell their customers how much they have to pay the state. They’re also required to disclose the identities of their customers and how much they spent, which has set off a fierce dispute over Coloradans’ privacy rights. Amazon says the law was enacted “over our strong objections.”•Three other states have enacted laws like the Colorado statute since 2008: New York, Rhode Island and North Carolina. And at least a dozen more are considering following their example.Rep. William Delahunt, D-Mass., in July introduced legislation that would give states legal authority to compel payment of taxes on online purchases, as long as they sign up for the Streamlined Sales and Use Tax Agreement, which the NCSL and the National Governors Association created in 1999. So far, 23 states have joined the effort to set up a nationwide tax collection standard.
Delahunt’s bill is before the House Judiciary Committee and its prospects are unclear, but it has picked up the vocal support of influential industry groups like the National Retail Federation and the Retail Industry Leaders Association. They argue that besides funding vital state programs, a national standard would even the playing field for in-state businesses that have to go through the red tape of calculating and collecting taxes for the state.
‘Amazon laws’
States that are currently considering requiring out-of-state retailers to collect sales taxes on online transactions:
• California
• Connecticut
• Illinois
• Iowa
• Maryland
• Minnesota
• New Mexico
• South Carolina
• Tennessee
• Vermont
• Virginia
• Wisconsin
Source: msnbc.com research/Alex Johnson
.“The Internet retailer, when they’re not collecting that sales tax, they’ve got a 5 percent advantage,” said George C. Peyton, vice president of the Virginia Retailers Federation, which is backing an Amazon law in Virginia.
For Amazon and other online outfits, “it’s almost like having a sales tax holiday every day,” Peyton said.
Kelly Justice, owner of the Fountain Bookstore in Richmond, is among those lobbying for such a measure in Virginia. She said that it’s only fair and that she is willing to assume the tax collection burden for her online customers in other states that enact Amazon laws.
"There are advantages to the Internet; I don’t dispute that,” Fountain said. “But I think that we really need to look at seriously playing with the same rules.”
For consumers, a rude awakening
The wild card in the deck is how everyday consumers will react.
Sharif Johnson of Columbia, S.C., was flummoxed when he learned that he was supposed to pay taxes on his Internet purchases, “because from my understanding, you don’t have to — that’s what I always understood.”
South Carolina’s laws are typically perplexing, or, as James Rowson, another Columbia resident, put it, “totally unrealistic with all that we have to keep track of.”
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Residents like Rowson are expected to keep track of their online purchases. At the end of the year, they’re supposed to categorize each purchase by the county where the item will predominantly be used and apply the sales tax as calculated by that county — a special headache for someone who might live in a county with a 6 percent sales tax but run a business in a neighboring county with an 8 percent levy.
The calculation is supposed to go on line 26 of the state return, where it’s labeled not as “sales tax” but as the less familiar “use tax.” The check, of course, is supposed to go to the state.
The law is similarly complex and similarly ignored in Florida, where Amanda Grout of Panama City said she spends hundreds of dollars a year buying books and clothes online but has never paid the use tax.
“I’m not going to go out of my way to go fill out all these forms and mail them in to pay more money,” Grout said.
In a sentiment that must hearten backers of the streamlined national tax agreement, she added:
“The only way I would do it is if they set it up on eBay or the website and forced me to do it.”
© 2010 msnbc.com Reprints
.
That’s because the March of Dimes went online when it bought about 4,000 T-shirts from a Florida vendor to give to donors during its March for Babies Walk last April. The charity often buys supplies and other materials online, and it also raises money online by selling items at auction — racking up a big tax bill in each case.
“We didn’t know that,” said Rosemary Opbroek, director of the Nebraska chapter. “We wish the law was different. It is taking money away from helping ... babies.”
An msnbc.com-NBC News special report
Alex Johnson is a reporter for msnbc.com. The following NBC stations contributed to this report: KOAA of Colorado Springs, Colo.; WCBD of Charleston, S.C.; WJHG of Panama City, Fla.; WOWT of Omaha, Neb.; WPMI of Mobile, Ala.; WWBT of Richmond, Va.; and WYFF of Greenville, S.C.
• Follow Alex Johnson on Facebook
• Follow Alex Johnson on Twitter
.Specifically, it is taking away about $26,000, the amount the State of Nebraska says the March of Dimes owes for unpaid taxes on the April purchase and other online transactions over the past five years.
Opbroek acknowledged that “we owe the money,” which she said would have to come out of proceeds from this week’s fundraiser. Assuming the final tally is the same as last year’s, about $215,000, the state tax bill will eat up nearly 13 percent of the donations.
The law the March of Dimes stumbled over is similar to statutes in most other states — arcane regulations that mean you are probably a tax scofflaw, along with just about everybody else who has bought something online. That’s roughly 80 percent of all U.S. adults, Nielsen Online calculates.
The reasons are complicated, because they involve variations in tax codes in the 46 states (plus the District of Columbia) that collect sales taxes, not to mention thousands of local tax regulations across the country. That leads to confusion even among advocates for or against enforcing existing tax policies on online purchases, which are often misleadingly characterized as attempts to “create” a new “Internet sales tax.”
It’s not a new tax
Although some online commerce advocacy groups like to label the Streamlined Sales and Use Tax Agreement (SSTUA) and similar projects as “new Internet taxes,” they’re not. The Internet Tax Freedom Act of 1998 prevents state and local governments from imposing “new or discriminatory taxes” on online transactions. It is scheduled to remain in effect until at least 2014. The SSTUA seeks to simplify and enforce the collection of taxes that are already on the books but haven’t been collected because of complicated distinctions laid down in the Supreme Court’s 1992 decision in Quill v. North Dakota.
• Read the 1992 decision
.Sales taxes or similar levies have always been in place on most online purchases in most states. But they are almost never paid. And with their budgets in crisis, states are more determined than ever to get their share.
Do you have a ‘physical nexus’?
The confusion boils down to who does the collecting and when. As with everything involving tax legislation, there are exceptions and other complications from state to state. For example, if you live in Delaware, Montana, New Hampshire or Oregon, which have no sales taxes, none of this applies.
Under a 1992 Supreme Court ruling, businesses are responsible for collecting sales taxes on every sale they make in a state where they have a “physical nexus.” In other words, if the business has a store, an office or even a single sales rep in your state, it’s supposed to tack the state’s sales tax onto your bill.
Online retailers like Amazon.com typically don’t add the tax, except in the states where they’re based or where they have physical facilities like warehouses or distribution centers. Amazon, for example, collects sales taxes only in Washington (its home state), Kansas, Kentucky, North Dakota and New York.
The tax is still supposed to be paid, however. And if the seller’s not responsible, then you, the buyer, are. In general, you’re supposed to voluntarily file your own report and pay the standard tax on your out-of-state online purchases. (The appropriate forms are available on state tax agency websites, revenue officials are happy to remind you.)
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..But it turns out that the vast majority of Americans are completely unaware of those rules, so the forms don’t get filed and the taxes don’t get paid — to the tune of $8.6 billion in 2010 alone, the National Conference of State Legislatures estimates.
That’s a big problem, because sales taxes (as they’re called when they’re handled by a retailer) and use taxes (as they’re called when the customer handles them after an out-of-state transaction) most often pay for schools and public safety.
NCSL data sheet: Uncollected taxes on out-of state sales (PDF)
“It’s just a lack of education,” said Adrienne Fairwell, a spokeswoman for the South Carolina Department of Revenue, which is estimated to have missed out on $94 million in uncollected online taxes last year.
“There are taxpayers that are willing to comply with the law and remit the appropriate amount of taxes that are due, but they don’t know that that’s what they’re supposed to be doing,” Fairwell said.
South Carolina, like most states, relies on consumers to be honest. But if you happen to be audited and you haven’t paid up, you could be in for a world of hurt.
“The Department of Revenue realizes that there is concern and there are issues with collecting the use tax,” Fairwell said. “But we aggressively go after that.”
‘Amazon laws’ draw support
As the economic downturn has gouged ever-bigger holes in their budgets, officials have started to turn up the heat. That’s why Nebraska Tax Commissioner Douglas A. Ewald went after the March of Dimes — one of several charities he said the state is pursuing.
Numerous other states are considering legislation or studying proposals that would crack down on non-payment of online taxes:
•The Alabama Department of Revenue is sending letters to random taxpayers, telling them to review their last three years of online purchases and send in a check. •In February, Colorado enacted the so-called Amazon law, declaring that online retailers were part of an “economic nexus” with state residents. Under the law — which has been challenged in federal court — Amazon and other online retailers are required to calculate the sales tax on every transaction and tell their customers how much they have to pay the state. They’re also required to disclose the identities of their customers and how much they spent, which has set off a fierce dispute over Coloradans’ privacy rights. Amazon says the law was enacted “over our strong objections.”•Three other states have enacted laws like the Colorado statute since 2008: New York, Rhode Island and North Carolina. And at least a dozen more are considering following their example.Rep. William Delahunt, D-Mass., in July introduced legislation that would give states legal authority to compel payment of taxes on online purchases, as long as they sign up for the Streamlined Sales and Use Tax Agreement, which the NCSL and the National Governors Association created in 1999. So far, 23 states have joined the effort to set up a nationwide tax collection standard.
Delahunt’s bill is before the House Judiciary Committee and its prospects are unclear, but it has picked up the vocal support of influential industry groups like the National Retail Federation and the Retail Industry Leaders Association. They argue that besides funding vital state programs, a national standard would even the playing field for in-state businesses that have to go through the red tape of calculating and collecting taxes for the state.
‘Amazon laws’
States that are currently considering requiring out-of-state retailers to collect sales taxes on online transactions:
• California
• Connecticut
• Illinois
• Iowa
• Maryland
• Minnesota
• New Mexico
• South Carolina
• Tennessee
• Vermont
• Virginia
• Wisconsin
Source: msnbc.com research/Alex Johnson
.“The Internet retailer, when they’re not collecting that sales tax, they’ve got a 5 percent advantage,” said George C. Peyton, vice president of the Virginia Retailers Federation, which is backing an Amazon law in Virginia.
For Amazon and other online outfits, “it’s almost like having a sales tax holiday every day,” Peyton said.
Kelly Justice, owner of the Fountain Bookstore in Richmond, is among those lobbying for such a measure in Virginia. She said that it’s only fair and that she is willing to assume the tax collection burden for her online customers in other states that enact Amazon laws.
"There are advantages to the Internet; I don’t dispute that,” Fountain said. “But I think that we really need to look at seriously playing with the same rules.”
For consumers, a rude awakening
The wild card in the deck is how everyday consumers will react.
Sharif Johnson of Columbia, S.C., was flummoxed when he learned that he was supposed to pay taxes on his Internet purchases, “because from my understanding, you don’t have to — that’s what I always understood.”
South Carolina’s laws are typically perplexing, or, as James Rowson, another Columbia resident, put it, “totally unrealistic with all that we have to keep track of.”
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Residents like Rowson are expected to keep track of their online purchases. At the end of the year, they’re supposed to categorize each purchase by the county where the item will predominantly be used and apply the sales tax as calculated by that county — a special headache for someone who might live in a county with a 6 percent sales tax but run a business in a neighboring county with an 8 percent levy.
The calculation is supposed to go on line 26 of the state return, where it’s labeled not as “sales tax” but as the less familiar “use tax.” The check, of course, is supposed to go to the state.
The law is similarly complex and similarly ignored in Florida, where Amanda Grout of Panama City said she spends hundreds of dollars a year buying books and clothes online but has never paid the use tax.
“I’m not going to go out of my way to go fill out all these forms and mail them in to pay more money,” Grout said.
In a sentiment that must hearten backers of the streamlined national tax agreement, she added:
“The only way I would do it is if they set it up on eBay or the website and forced me to do it.”
© 2010 msnbc.com Reprints
.
O'Donnell Wows Conservatives at Values Summit
WASHINGTON – The tea party's latest darling, Delaware GOP Senate candidate Christine O'Donnell, aligned herself squarely with the Republican Party's social conservative base Friday in criticizing Democrats and "ruling class elites" in her first national appearance since her upset primary victory.
"They're trying to marginalize us and put us in a box," O'Donnell said to cheers. "They're trying to say we're trying to take over this party or that campaign. They don't get it. We're not trying to take over our country. We are our country. We have always been in charge."
It wasn't clear whether she was talking about the tea party or the conservative movement or both. But it didn't seem to matter to the friendly crowd at the annual Values Voters Summit just days after she shocked the GOP with her upset of nine-term Rep. Mike Castle.
Since then, O'Donnell has seemed to focus on trying to repair a reputation battered during the primary's final days. She scheduled interviews on two Sunday morning news programs and made a last-minute appearance at Friday's gathering, which serves as a testing ground for presidential candidates and up-and-coming Republicans.
After taking the stage to Journey's "Don't Stop Believing," O'Donnell recalled when President Barack Obama took over the White House in 2009.
"The conservative movement was told to curl up in a fetal position and just stay there for the next eight years, thank you very much," O'Donnell told her audience — and then added coyly: "Well, how things have changed."
She repeatedly struck a populist, outsider tone, dismissing the "D.C. cocktail crowd," chiding the "Beltway popular crowd" and blistering "the ruling class elites."
"They call us wacky. They call us wing nuts. We call us 'We the people,'" O'Donnell said, invoking conservative stalwart Newt Gingrich's saying: "There are more of us than there are of them."
She made scant — if any — references to the Republican Party or the tea party coalition.
And only in passing did she acknowledge divisions within the conservative movement, saying there is not always agreement on strategy, endorsements and campaigns but "we're loud, we're rowdy, we're passionate."
O'Donnell trails Democrat Chris Coons, the New Castle County executive, in a state where Democratic voters far outnumber Republicans. Republicans and Democrats alike say it will be difficult for a conservative like O'Donnell to win the seat Vice President Joe Biden had held for decades.
Nevertheless, in the days since O'Donnell's victory, establishment Republicans, some grudgingly, were starting to embrace O'Donnell as their GOP nominee, mindful not to alienate tea party activists who her shepherded to victory and who are injecting a huge dose of energy into the Republican Party ahead of the Nov. 2 elections.
Texas Sen. John Cornyn, the head of the National Senatorial Campaign Committee, was planning to meet with O'Donnell. She was doing her part, too, to bridge the divide between the tea party and GOP establishment by appearing at the meeting.
Sponsored by the conservative Family Research Council, it served as friendly audience for the candidate, who started her political career years ago as a conservative activist and cable TV commentator focused on opposition to cultural issues such as abortion, homosexuality and premarital sex.
Since her GOP nomination victory, opponents have unearthed unflattering age-old TV clips, including one in 1996 in which she equated masturbation with adultery. She said then: "The Bible says that lust in your heart is committing adultery, so you can't masturbate without lust."
On Thursday, O'Donnell dismissed her previous comments and stressed that the Constitution — not her personal beliefs — will guide her votes on legislation.
©
"They're trying to marginalize us and put us in a box," O'Donnell said to cheers. "They're trying to say we're trying to take over this party or that campaign. They don't get it. We're not trying to take over our country. We are our country. We have always been in charge."
It wasn't clear whether she was talking about the tea party or the conservative movement or both. But it didn't seem to matter to the friendly crowd at the annual Values Voters Summit just days after she shocked the GOP with her upset of nine-term Rep. Mike Castle.
Since then, O'Donnell has seemed to focus on trying to repair a reputation battered during the primary's final days. She scheduled interviews on two Sunday morning news programs and made a last-minute appearance at Friday's gathering, which serves as a testing ground for presidential candidates and up-and-coming Republicans.
After taking the stage to Journey's "Don't Stop Believing," O'Donnell recalled when President Barack Obama took over the White House in 2009.
"The conservative movement was told to curl up in a fetal position and just stay there for the next eight years, thank you very much," O'Donnell told her audience — and then added coyly: "Well, how things have changed."
She repeatedly struck a populist, outsider tone, dismissing the "D.C. cocktail crowd," chiding the "Beltway popular crowd" and blistering "the ruling class elites."
"They call us wacky. They call us wing nuts. We call us 'We the people,'" O'Donnell said, invoking conservative stalwart Newt Gingrich's saying: "There are more of us than there are of them."
She made scant — if any — references to the Republican Party or the tea party coalition.
And only in passing did she acknowledge divisions within the conservative movement, saying there is not always agreement on strategy, endorsements and campaigns but "we're loud, we're rowdy, we're passionate."
O'Donnell trails Democrat Chris Coons, the New Castle County executive, in a state where Democratic voters far outnumber Republicans. Republicans and Democrats alike say it will be difficult for a conservative like O'Donnell to win the seat Vice President Joe Biden had held for decades.
Nevertheless, in the days since O'Donnell's victory, establishment Republicans, some grudgingly, were starting to embrace O'Donnell as their GOP nominee, mindful not to alienate tea party activists who her shepherded to victory and who are injecting a huge dose of energy into the Republican Party ahead of the Nov. 2 elections.
Texas Sen. John Cornyn, the head of the National Senatorial Campaign Committee, was planning to meet with O'Donnell. She was doing her part, too, to bridge the divide between the tea party and GOP establishment by appearing at the meeting.
Sponsored by the conservative Family Research Council, it served as friendly audience for the candidate, who started her political career years ago as a conservative activist and cable TV commentator focused on opposition to cultural issues such as abortion, homosexuality and premarital sex.
Since her GOP nomination victory, opponents have unearthed unflattering age-old TV clips, including one in 1996 in which she equated masturbation with adultery. She said then: "The Bible says that lust in your heart is committing adultery, so you can't masturbate without lust."
On Thursday, O'Donnell dismissed her previous comments and stressed that the Constitution — not her personal beliefs — will guide her votes on legislation.
©
Wednesday, September 15, 2010
IE 9 Beta Strips Down For Speed
CWmike writes "Those who have written off IE as being slow and old-looking are in for a surprise. The just-released Internet Explorer 9 beta is dramatically faster than its predecessor, sports an elegant, stripped-down interface and adds some useful new features, writes Preston Gralla. Even more surprising than the stripped-down interface is IE9 beta's speed. Internet Explorer has long been the slowest browser by a wide margin. IE9 has turned that around in dramatic fashion, using hardware acceleration and a new JavaScript ...More engine it calls Chakra, which compiles scripts in the background and uses multiple processor cores. In this beta, my tests show it overtaking Firefox for speed, and putting up a respectable showing against Safari, Opera and Chrome. It's even integrated into Windows 7. One big problem: It will not work on Windows XP. So, forget the performance and security boost, many enterprises and netbook users." ~ Read more of this story at Slashdot. ...Less
Dell Unveils Inspiron Duo, 10-Inch Tablet/Notebook Combo
At the Intel (INTC) Developers Forum yesterday, Dell (DELL) unveiled the Inspiron Duo, a 10-inch Windows-based tablet running a dual-processor version of the Intel Atom processor.
The most interesting aspect of the Duo: the ability to quickly convert from a tablet into a more traditional notebook with a full keyboard.
Dell did not disclose a price for the new device, which it plans to ship later this year.
Dell today is down 12 cents, or
The most interesting aspect of the Duo: the ability to quickly convert from a tablet into a more traditional notebook with a full keyboard.
Dell did not disclose a price for the new device, which it plans to ship later this year.
Dell today is down 12 cents, or
Google In Talks On Music Download Store; Cloud-Based Locker
Google (GOOG), which has long been expected to jump into the online music business, has been talking to the record labels about a plan that would include a download store and a subscription-based, cloud-based locker service, according to Billboard.
Under the proposal, consumers would pay about $25 a year to store songs in the cloud, with access from any Internet-connected device by streaming or download. The store would sell both albums and individual tracks. Billboard says the company is seeking the right to provide each customer with the ability to listen to a full-track version of every song once, as Lala.com did before Apple bought it and shut the service down.
The locker would also have social networking features, like the ability to send play lists to other subscribers.
Billboard says Google is seeking a three-year initial licensing deal from the labels.
Under the proposal, consumers would pay about $25 a year to store songs in the cloud, with access from any Internet-connected device by streaming or download. The store would sell both albums and individual tracks. Billboard says the company is seeking the right to provide each customer with the ability to listen to a full-track version of every song once, as Lala.com did before Apple bought it and shut the service down.
The locker would also have social networking features, like the ability to send play lists to other subscribers.
Billboard says Google is seeking a three-year initial licensing deal from the labels.
Home Price Double Dip Begins
The trouble with many of the "indicators" we report is that some are pretty current and others are severely lagging. Home sales are generally the former and home prices the latter.
That's why, given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while.
Well we're here.
Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic's Home Price Index shows home prices "flat" in July as transaction volume continues to decline. "This was the first time in five months that no year-over-year gains were reported," according to the release. In June, prices were up 2.4 percent year over year. In addition, "36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining."
And there's the rub.
Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program.
"Sellers on the market today have cut $29 billion off their collective home equity."
Trulia.com
August Report
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up. Twenty-six percent of sellers on the market in August, according to Trulia.com, had lowered their expectations, and hence their prices. Sellers on the market today have cut $29 billion off their collective home equity.
We spoke to two sellers in Northern Virginia, Stephanie and Gabriel Mikulasek, who have dropped their asking price by $21,000. "We thought it was the value of the house that we could probably get, if the market would pick up a little bit, and people were a little positive," Gabriel told us. "What we found out is that the market is pretty slow; people are very hesitant to make bids, so we decided to make it a little more attractive and lessen it, and see how it goes."
Mortgages
30 yr fixed 4.50% 4.67%
30 yr fixed jumbo 5.36% 5.53%
15 yr fixed 3.88% 4.24%
15 yr fixed jumbo 4.80% 5.05%
5/1 ARM 3.37% 3.29%
5/1 jumbo ARM 4.03% 3.52%
Find personalized rates:
Bankrate.com
They say today's buyers are only looking for great deals, so if you price the home at its actual value, nobody's interested. You have to go below.
Some of you responding on the blog yesterday said that your markets are just fine, even seeing competition in offers again; I'm sure this is true in many local areas. The trouble is that those areas are in the vast minority. Unless we see a marked, widespread increase in home sales over the next several months, prices will go from flat to down once again.
That's why, given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while.
Well we're here.
Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic's Home Price Index shows home prices "flat" in July as transaction volume continues to decline. "This was the first time in five months that no year-over-year gains were reported," according to the release. In June, prices were up 2.4 percent year over year. In addition, "36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining."
And there's the rub.
Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program.
"Sellers on the market today have cut $29 billion off their collective home equity."
Trulia.com
August Report
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up. Twenty-six percent of sellers on the market in August, according to Trulia.com, had lowered their expectations, and hence their prices. Sellers on the market today have cut $29 billion off their collective home equity.
We spoke to two sellers in Northern Virginia, Stephanie and Gabriel Mikulasek, who have dropped their asking price by $21,000. "We thought it was the value of the house that we could probably get, if the market would pick up a little bit, and people were a little positive," Gabriel told us. "What we found out is that the market is pretty slow; people are very hesitant to make bids, so we decided to make it a little more attractive and lessen it, and see how it goes."
Mortgages
30 yr fixed 4.50% 4.67%
30 yr fixed jumbo 5.36% 5.53%
15 yr fixed 3.88% 4.24%
15 yr fixed jumbo 4.80% 5.05%
5/1 ARM 3.37% 3.29%
5/1 jumbo ARM 4.03% 3.52%
Find personalized rates:
Bankrate.com
They say today's buyers are only looking for great deals, so if you price the home at its actual value, nobody's interested. You have to go below.
Some of you responding on the blog yesterday said that your markets are just fine, even seeing competition in offers again; I'm sure this is true in many local areas. The trouble is that those areas are in the vast minority. Unless we see a marked, widespread increase in home sales over the next several months, prices will go from flat to down once again.
Retirement on Hold: American Workers $6 Trillion Short
A new study obtained by CNBC says Americans are $6.6 trillion short of what they need to retire.
The study, conducted by Boston College's Center for Retirement Research, says savings have been squeezed by declines in stock and housing values.
The study was commissioned by Retirement USA, a coalition of organized labor and pension rights advocates that hopes to use the study to push for a more stable retirement system. The group plans to unveil the study at a news conference in Washington on Wednesday.
The $6.6 trillion figure is based on projections of retirement and income for American workers ages 32-64. The study's authors say they arrived at the amount using conservative assumptions, including a 3 percent rate of return on assets and no further cuts in pension coverage or increases in the Social Security retirement age.
"Using other assumptions, it could be much higher," said Maria Freese, Director of Government Relations and Policy for the National Committee to Preserve Social Security and Medicare. For example, the study notes, if the rate of return matches the return on U.S. Treasury Inflation-Protected Securities (TIPS), currently 1.87 percent, the deficit balloons to $7.9 trillion.
This announcement comes on the heels of other sobering news: Milliman Inc., a Seattle-based actuarial and consulting firm, reported this week that the funded status of the 100 largest corporate defined benefit pension plans dropped by $108 billion during August 2010.
This comes amid recent reports indicating that a White House-created panel is considering proposals to cut Social Security benefits and raise the retirement age.
"The 'Retirement Income Deficit' should be a wake-up call to Americans everywhere," Freese said.
The study, conducted by Boston College's Center for Retirement Research, says savings have been squeezed by declines in stock and housing values.
The study was commissioned by Retirement USA, a coalition of organized labor and pension rights advocates that hopes to use the study to push for a more stable retirement system. The group plans to unveil the study at a news conference in Washington on Wednesday.
The $6.6 trillion figure is based on projections of retirement and income for American workers ages 32-64. The study's authors say they arrived at the amount using conservative assumptions, including a 3 percent rate of return on assets and no further cuts in pension coverage or increases in the Social Security retirement age.
"Using other assumptions, it could be much higher," said Maria Freese, Director of Government Relations and Policy for the National Committee to Preserve Social Security and Medicare. For example, the study notes, if the rate of return matches the return on U.S. Treasury Inflation-Protected Securities (TIPS), currently 1.87 percent, the deficit balloons to $7.9 trillion.
This announcement comes on the heels of other sobering news: Milliman Inc., a Seattle-based actuarial and consulting firm, reported this week that the funded status of the 100 largest corporate defined benefit pension plans dropped by $108 billion during August 2010.
This comes amid recent reports indicating that a White House-created panel is considering proposals to cut Social Security benefits and raise the retirement age.
"The 'Retirement Income Deficit' should be a wake-up call to Americans everywhere," Freese said.
Phone Sales Push Profit at Best Buy
Growth in its expanding cellphone business helped the electronics retail chain Best Buy post a 60 percent increase in second-quarter net income on Tuesday.
Best Buy sounded an optimistic note about the holiday season and raised its guidance for the year, but the chief executive, Brian J. Dunn, cautioned that shoppers were still “highly selective” in their spending.
“We believe, however, that this will change in our favor over the back half of the year,” Mr. Dunn said. “Customers traditionally rotate their spending to our categories during the holiday shopping season and a strong lineup of products coming across the board reinforces our confidence.”
In the three months ended Aug. 28, revenue in stores open at least 14 months, a crucial indicator, edged down 0.1 percent and sales of flat-screen TVs continued to be weak. That was offset by strength at Best Buy Mobile, which Best Buy has been aggressively expanding.
So far this fiscal year, 34 Best Buy Mobile stores have opened for a total of 110. At least 50 more are to open by the end of the year, including 11 this month. There also are 1,100 Mobile areas within regular Best Buy stores.
Second-quarter net income rose to $254 million, or 60 cents a share. That compares with $158 million, or 37 cents a share, last year.
Analysts polled by Thomson Reuters predicted net income of 44 cents a share.
Revenue rose 3 percent, to $11.34 billion, from $11.02 billion in the quarter a year earlier.
Sales of TVs, video game consoles, video games, music and movies fell. TVs have been a weak spot for electronics sellers as prices decline less steeply than in the past.
Domestic revenue rose 3 percent, to $8.4 billion, while international revenue rose 6 percent, to $2.9 billion.
Best Buy said its domestic market share fell slightly in the quarter because of a shortage of Apple iPads during the early days after its release and because of continued weakness in entertainment software and fewer home theater sales.
Best Buy sounded an optimistic note about the holiday season and raised its guidance for the year, but the chief executive, Brian J. Dunn, cautioned that shoppers were still “highly selective” in their spending.
“We believe, however, that this will change in our favor over the back half of the year,” Mr. Dunn said. “Customers traditionally rotate their spending to our categories during the holiday shopping season and a strong lineup of products coming across the board reinforces our confidence.”
In the three months ended Aug. 28, revenue in stores open at least 14 months, a crucial indicator, edged down 0.1 percent and sales of flat-screen TVs continued to be weak. That was offset by strength at Best Buy Mobile, which Best Buy has been aggressively expanding.
So far this fiscal year, 34 Best Buy Mobile stores have opened for a total of 110. At least 50 more are to open by the end of the year, including 11 this month. There also are 1,100 Mobile areas within regular Best Buy stores.
Second-quarter net income rose to $254 million, or 60 cents a share. That compares with $158 million, or 37 cents a share, last year.
Analysts polled by Thomson Reuters predicted net income of 44 cents a share.
Revenue rose 3 percent, to $11.34 billion, from $11.02 billion in the quarter a year earlier.
Sales of TVs, video game consoles, video games, music and movies fell. TVs have been a weak spot for electronics sellers as prices decline less steeply than in the past.
Domestic revenue rose 3 percent, to $8.4 billion, while international revenue rose 6 percent, to $2.9 billion.
Best Buy said its domestic market share fell slightly in the quarter because of a shortage of Apple iPads during the early days after its release and because of continued weakness in entertainment software and fewer home theater sales.
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