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Dinner with the FBI

madhedgefundtrader's picture





 

I managed to catch a quick dinner with Robert Mueller as he passed through San Francisco on some bureau business which he couldn’t disclose. Meeting him for the first time, I immediately recognized the kind of no nonsense, ex-Marine, Vietnam Vet that he was, the kind of officer who used to rip your guts out for disobeying a direct order, which in my case was frequently. President Obama thought this was the man you want for your Director of the FBI, which is why Mueller survived as one of the few holdovers from the Bush administration.

Google’s move to drop censorship in China following a serious hacker attack, and risk getting kicked out of the country, focuses a big spotlight on a dirty little secret war, the new millennium’s answer to the cold war. It’s really been going on since 1966, when a 75 cent accounting discrepancy at the University of California at Berkeley led to the smashing of a German industrial espionage ring that was looting computers through the old DARPANET.

Instead of bullets, bombs, and missiles, opponents are deploying bandwidth, Trojan horses, and stealth software downloads. Until recently, this new Cold War was known only to computer and security professionals. So far, the big loser has been the US, which had a “Library of Congress” worth of data cleaned out of mainframes at the Pentagon, the State Department, and Sandia National Labs, where weapons research is carried out. Also gone are hundreds of billions of dollars worth of trade secrets, designs, and other intellectual property owned by US corporations. The administration views the threat so seriously that it has made cyber warfare a top national security priority.

Mueller told me that the Internet is not just a conduit for commerce, but also for crime and terrorism, and the bad guys are checking your doorknobs every day. Information is power, and fiber optic cable is a weapon. Terrorists, in particular, love the new Google Earth application. Only recently, Mueller busted an American-Egyptian phishing ring, arresting 50, which cleaned out $50 million from 5,000 US accounts.

Our own government hackers have discovered a global “GhostNet” of compromised computers around the world in government departments, military facilities, and corporations that funnel terabytes of information back to the Middle Kingdom. Particularly popular are key stroke tracking programs planted on machines in sensitive areas. The source of these programs has been traced back to virtually every ministry in Beijing. But the US can’t file a formal complaint or take legal action without revealing its own resources and capabilities. So it stays under the radar, planning countermeasures to unleash if the war ever heats up from cold to hot.

Mueller argues that we must all take ownership of the cyber security problem through the vigilant use of antivirus software, firewalls, sophisticated passwords, and constant patches. Teenaged kids, like the Canadian who launched the biggest “denial of service” attack against E-Trader and E-Bay, are to be feared. Be careful what you post on your Facebook page because it may kill a job prospect years down the road.

As a former San Francisco federal prosecutor, Mueller would love to point fingers, name names, and kick butt. However his senior position in the administration prevents him from doing so without igniting a diplomatic brouhaha.

But it’s clear from his hints and indirect references that the Chinese are in the game for intelligence, and the Russians for money. Hillary can file all of the harshly written diplomatic notes she wants, but it’s hard to get offending countries to act against miscreants we consider criminals, and they worship as national heroes. China in particular has never been big on honoring intellectual property rights, and the issue of cyber security is just another facet of that shortcoming.

The FBI is now embedding agents in police departments in Eastern Europe, and even has a token representation in China to take the fight global. But Mueller admitted that even he recently fell victim to a phishing attack on his personal bank account. His wife has since banned him from online banking. As I left, Mueller offered me a piece of advice: Don’t answer any e-mails from him, especially if he is asking for money.

When I got home from dinner, I immediately backed up all my files, reset my passwords, and bought my fourth antivirus program. I also installed bars on my windows and set booby traps on the front lawn for good measure.

For more iconoclastic, out of consensus analysis, visit www.madhedgefundtrader.com, where conventional wisdom is drawn and quartered daily. You can also hear me in person weekly by listening to Hedge Fund Radio by clicking here at http://www.madhedgefundtrader.com/Hedge_Fund_Radio.html

 


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Sat, 01/16/2010 - 17:43 | Link to Comment heatbarrier
heatbarrier's picture

Looking forward to breakfast with the NSA.

Sat, 01/16/2010 - 12:36 | Link to Comment madhedgefundtrader
madhedgefundtrader's picture

I take it that you are too young to have been in the financial markets in the seventies, which why your facts are all wrong. Christopher Woods was a young kid who can ten years after me at the Economist. Kevin Parker was on the US Equity trading side and had nothing to do with the Japanese desk, where the big money was made in the late eighties. Its possible he took over after I left, but by then international was well established and accounted for more than half of Morgan Stanley's equity division profits. Soros and Tudor where global, with most of their big positions in the US or in the FX markets. Mine was the first pure international fund, which was a tough sell, because this was when the Dow was going for 2,000 to 10,000. You could meet Mueller and Panetta too. It's not that hard. You just haven't ried enough. As for Elvis, I was given a tour of Graceland once by his last girlfriend, who I dated later. I got to use the toilet he died on. Maybe you should too.

Sat, 01/16/2010 - 18:19 | Link to Comment Anonymous
Sat, 01/16/2010 - 16:47 | Link to Comment Ruth
Ruth's picture

No disrespect meant madhedgefundtrader, just trying to add to the flavor.  Thank you for your attempts at clarity and more disinfectant.  Please Repeat as many times as possible.  The american public needs things like this to peek their attention and Breakfast with Elvis' Girlfriend will touch one of my relative's heart strings, as they believe he's still alive!

 

Sat, 01/16/2010 - 08:23 | Link to Comment Anonymous
Sat, 01/16/2010 - 06:11 | Link to Comment Ruth
Ruth's picture

I think it's fair to say that I wouldn't take this guy's word as I don't know him and I know this person even less, but when they have gag orders I listen.  Why did we lose all that intelligence.....they're really that good or we're just so bad or just too connected or infiltrated?  YOU DECIDE. 

If you haven't heard these depositions YOU SHOULD:

http://www.bradblog.com/?p=7374

Sat, 01/16/2010 - 10:20 | Link to Comment Anonymous
Sat, 01/16/2010 - 05:10 | Link to Comment blueskyscottsdale
blueskyscottsdale's picture

the core problem here is nobody listens to the FBI. In 2004, the FBI warned that "mortgage fraud was becoming so rampant that the resulting "epidemic" of crimes could trigger a massive financial crisis. According to a December 2005 press release from the FBI, "mortgage fraud is one of the fastest growing white collar crimes in the United States". Who listened? Nobody. What did it cost the US tax payer? Trillions. Recently the FBI has warned of rampant fraud at all levels of the society of unprecedented proportions. That is why we are going to audit the Fed and find out what has really been going on there.

http://en.wikipedia.org/wiki/Mortgage_fraud

Fri, 01/15/2010 - 23:34 | Link to Comment Anonymous
Fri, 01/15/2010 - 22:56 | Link to Comment Anonymous
Fri, 01/15/2010 - 17:34 | Link to Comment Anonymous
Fri, 01/15/2010 - 23:39 | Link to Comment Anonymous
Fri, 01/15/2010 - 16:35 | Link to Comment Hammer59
Hammer59's picture

"Flame on Friday". Suprised he got 2140 hits, but he is an interesting read. He enjoys employing "artistic license"-- slight stretching of the truth for entertainment value. Harmless enough.

There are some clever people on Zero Hedge.

Have a great weekend.

Fri, 01/15/2010 - 16:34 | Link to Comment Anonymous
Fri, 01/15/2010 - 16:06 | Link to Comment Jestocost
Jestocost's picture

This is absolute bullshit. 

After "Lunch with the CIA"  you presume to subject us to "Dinner with the FBI"

Is there anything in this post that is supposed to be information that's new, correct or even relevant?

You can get more topical information from YouTube, the CIA Office of Information and, God forgive me, the DHS website.

Please, make your next istallment  "My Morning Dump with the DIA and the Subterreanean Secrects of the Brown Finless Fish"

What a Pillock

Fri, 01/15/2010 - 15:56 | Link to Comment Anonymous
Fri, 01/15/2010 - 15:38 | Link to Comment Anonymous
Fri, 01/15/2010 - 15:23 | Link to Comment Anonymous
Fri, 01/15/2010 - 15:04 | Link to Comment Anonymous
Fri, 01/15/2010 - 14:52 | Link to Comment Anonymous
Fri, 01/15/2010 - 14:45 | Link to Comment Anonymous
Fri, 01/15/2010 - 14:43 | Link to Comment Anonymous
Fri, 01/15/2010 - 23:47 | Link to Comment Anonymous
Fri, 01/15/2010 - 15:41 | Link to Comment nobita
nobita's picture

when you put it like that...

fuck im gullible :)

Fri, 01/15/2010 - 15:38 | Link to Comment Strom
Strom's picture

Parody of an international financier. It has to be...

Fri, 01/15/2010 - 13:41 | Link to Comment Strom
Strom's picture

I'm telling you guys - this stuff is some sort of parody. Just look at the last line:

"I also installed bars on my windows and set booby traps on the front lawn for good measure."

 

Fri, 01/15/2010 - 14:28 | Link to Comment Cpl Hicks
Cpl Hicks's picture

Maybe this whole website is just a spoof, a fraud- to lure the last of the free-thinking Americans into cyber-slavery.

Think about it- all these 'Anonymous' posts, they got to be just random word generated filler.

Fri, 01/15/2010 - 15:06 | Link to Comment Fish Gone Bad
Fish Gone Bad's picture

An open mind is like an empty lot.  Given the chance, people will fill it up with as much trash and garbage as they can get away with. 

 

Fri, 01/15/2010 - 18:18 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I love your view. Having lived in the inner city for a few years during the 80's I can say you are 100% correct. It always amazed me how a newly cleared lot (usually a building was demolished) was quickly filled with trash, broken furniture and everything you could and couldn't imagine.

I have a firewall on my open mind but I get your point.

Fri, 01/15/2010 - 13:53 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I've come to the same conclusion. We are being played. Like I said in my comment above (Yes, I'm showing my ego by quoting myself)

"Lunch with the CIA, dinner with the FBI. While I won't argue with suspending disbelief when going to the movies, reading this author requires engaging disbelief. Even if the meetings did take place, I trust nothing that comes from this government and anyone who speaks for this government."

The absurdity displayed by this author defies the imagination. Either this is a unique disinformation campaign or a farce to see how far he can go and the type of reactions he can get from those ZH buffoons.

Fri, 01/15/2010 - 16:27 | Link to Comment Miss Piggy
Miss Piggy's picture

Agreed.  This guy is a narcisist....

Fri, 01/15/2010 - 14:54 | Link to Comment nobita
nobita's picture

CD love your posts here, but i think your kneejerk scepticism is leading you astray here. i follow the guys webpage daily and follow some of his investment advice. think he is the real deal.

i also believe he had dinner with these people. two reasons.

1. he doesn´t say anything you didn´t already know, no inside info from these dinners.

2. as a hedgie he probably fundraised alot and thus have very powerful friends. if you raise enough money for the democrats even bill clinton or other bigshots will take your call and do you favours.

Fri, 01/15/2010 - 15:09 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

You could very well be correct. I've been wrong before and I promise you I'll be wrong again. But something stinks here. There are too many red flags, too many outliers, too many things that stick out like red thumbs. Personally I've found that as we drift through the day, we're on auto pilot and if the overall view fits our world view, we quickly discard non conforming information as an aberrant item or stray data.

I've been reading this guy's web site since he starting post here on ZH. And I agree that it seems up and up. So why post this kind of stuff? And why say stupid things like adding a 4th virus software program to his computers when after adding the second, his computer would start having serious problems because one virus program would be fighting with the other.

Or the quip about bars on the windows and alarm systems. When something is said that is this far out, I would be intellectually dishonest if I didn't ask myself why he would even say this. His other posts don't stretch the envelope in this manner. So why now? Each time he goes off the deep end, it's about his meetings with government officials or other "inside" information.

I'm really not cynical. I approach everything as valid until I can prove otherwise. But this guy is too far off base on select articles and I must ask myself why. When the batter is always getting hit by a particular pitcher and no one else, at what point should the batter start asking questions?

Fri, 01/15/2010 - 15:32 | Link to Comment nobita
nobita's picture

you make good points CD. the four antivirus programs sentence is retarded^2. 

you might have changed my mind :)

i have realized one thing. people put in a lot of work for internet cred. seriously they do to an illogical degree. 

this guy wants us to think of him as a bigshot, which he might well be, but he does seem to have some kind om komplex with all the namedropping.

namedropping/bragging might be more acceptable in american culture than my own thou.

still value the guys investment advice.

Fri, 01/15/2010 - 16:24 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

"still value the guys investment advice."

Take what you need and leave the rest. One of my biggest personal mistakes ever was dismissing something completely because I disagreed with it's basic premise. That can be a fatal mistake. We have a tendency to be all or nothing. If I find out someone has lied to me, I have the tendency to dismiss everything else that person tells me.

What I've learned to do is to measure everything on it's own merit. The quality of the messenger certainly weights into the calculation but it shouldn't be the only qualification. For example, I take Bill Gross with a large grain of salt. But Gross is still a brilliant manager and to dismiss him because I don't agree with some of what he says would indicate my foolishness and stupidity. Making these decisions is difficult when we are uncertain about the subject or ourselves. This is why personal growth is so important to me. I need to understand my blind spots in order to help me see others.

Sat, 01/16/2010 - 09:58 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

Well, ZH allows him to post. I assume if he is a complete jokester Tyler and Marla would not let him post.  I think MHFT was kidding about the bars and 4th antivirus program to make the point that beyond a few steps you really can't protect yourself.  He seems a bit full of himself, but hey, that's what makes him worth reading. It is tempting to dislike him for his apparent success (the post about his super-expensive home was a bit over the top) but I am keeping an open mind.

Fri, 01/15/2010 - 13:26 | Link to Comment Anonymous
Sat, 01/16/2010 - 09:46 | Link to Comment MarketTruth
MarketTruth's picture

Macs are just as easy to attack, perhaps easier actually... just that few hackers bother due to do so.

Fri, 01/15/2010 - 14:49 | Link to Comment Missing_Link
Missing_Link's picture

That won't really help.  Macs aren't as bad as the PC but aren't a silver bullet by a long shot.

Fri, 01/15/2010 - 12:57 | Link to Comment Reductio ad Absurdum
Reductio ad Absurdum's picture

...been going on since 1966, ...looting computers through the old DARPANET.

There is no "DARPANET" formally; the term is "ARPANET." The first message was sent over ARPANET in late October of 1969. So there was no industrial espionage/looting occurring via the internet in 1966.

Fri, 01/15/2010 - 13:55 | Link to Comment rangerider
rangerider's picture

arpanet or darpanet explanined here

 

http://www.inetdaemon.com/tutorials/internet/history.shtml

Fri, 01/15/2010 - 13:42 | Link to Comment Anonymous
Fri, 01/15/2010 - 12:42 | Link to Comment Anonymous
Fri, 01/15/2010 - 12:41 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

OK, I'll say it.

Lunch with the CIA, dinner with the FBI. While I won't argue with suspending disbelief when going to the movies, reading this author requires engaging disbelief. Even if the meetings did take place, I trust nothing that comes from this government and anyone who speaks for this government.

 

Fri, 01/15/2010 - 12:31 | Link to Comment Anonymous
Fri, 01/15/2010 - 14:15 | Link to Comment Cpl Hicks
Cpl Hicks's picture

Da, tovarish....it is finished, received.

Fri, 01/15/2010 - 12:23 | Link to Comment Anonymous
Fri, 01/15/2010 - 17:23 | Link to Comment Dburn
Dburn's picture

You must not have to worry too much about security. Whenever I see a site hijacked on one of my servers it's usually a Russian. Hackers upload disguised mime types in many of these social networking sites, you can bet they will be downloading all of the account information on the sites and using whatever is there to connect to other data to identify bank accounts and credit cards where they only had partial information. They are smart about it . They hit the cards for $27.68 which goes virtually unnoticed. They can literally put 50,000 card on a reoccurring billing schedule once a month. That's some serious dough. They also would claim "We work very Hard here"

I had one Russian  hacker that was absolutely obsessed with one of my servers . I put up every security device that was in my possession and knowledge and then finally decided to shut registration down . He was using registration to upload a avatar which was really a hack that broke into the site . I finally realized that all upload directories have to be outside of the root of the site  with very limited privileges.

What they hell, these CMS based sites are free and open. Which means these guys know them line by line.

 

If anyone thinks Windows is more vulnerable think again. These are very sophisticated hackers who can walk into a linux/unix based machine as easily as they can a windows machine. It really doesn't matter if the conversation happened as described. What was up there was the truth. They have top people working on hacking our systems and then there is the private sector in each country,. If it's bad , it usually comes from Russia or China without any love.

 

Social Networking sites like  Facebook are prime targets but sites  like this that run on Drupal or Joomla CMS' are similar and are every bit a target. This one has pretty good security. But I wouldn't allow anyone to upload avatars or at the least don't accept the default install on the directory . Make sure the directory is outside the root of the web site. That means either finding an extension or a programmer than can change the code to pull from that directory. 

>

As one person described it, "we had to take the servers apart and reformat all the drives after one attack. They even got into the bios on the motherboards" . They also are attacking Databases with SQL injections . Sites like these run on MYSQL. Another Open Source database package which is pretty decent but it is Open source.

 

Security is a huge problem. It's not as visible yet as it will be, but some of the best security experts have had to eat some serious humble pie when faced with these guys. It's no shame to get attacked. They can get into any computer anywhere that is connected. The guy from IBM was right. A piece of paper is more secure.

 

Think of the ramifications of that for the financial sector. I wouldn't be surprised if they already know how to take it down.

 

Fri, 01/15/2010 - 12:54 | Link to Comment Gordon Freeman
Gordon Freeman's picture

I like the way you think...

Fri, 01/15/2010 - 14:13 | Link to Comment Cpl Hicks
Cpl Hicks's picture

Me too.

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