E-Mail Spam Goes Artisanal

Scammers are turning to small-batch attacks to beat today’s more sophisticated e-mail filters.

When a group of hackers sought to steal iTunes passwords from Apple customers in France, they didn't spam the entire country. They sent out just 5,000 e-mails to French-speaking targets containing links to a fake login page.

The attack, which took place in October, was a success, at least by spamming standards. Most of the e-mails found their way to their intended recipients' inboxes, a rare occurrence with today's sophisticated spam filters. Agari Data, a cyber-security company that tracked the incident, said more spammers are adopting this kind of small-batch approach in the hopes of breaking through junk-mail blocking software.

As anyone with a Gmail or Yahoo! account knows, spam e-mail is mostly relegated to a folder you probably never check. Unlike the old days of the Internet, in-boxes are no longer clogged with poorly worded come-ons for Viagra pills and Nigerian banking scams. Modern anti-spam filters block more than 99.99 percent of junk messages.

Spam is still a big business. Unsolicited junk mail accounts for 86 percent of the world's e-mail traffic, with about 400 billion spam messages sent a day, according to Talos, a digital threat research division of Cisco Systems. While the vast majority will never see the inside of an inbox, the few that do worked hard to get there. "Spammers are getting much more focused, much more targeted, and this shows they are getting more concerned about quality," said Vidur Apparao, Agari's chief technology officer.

In the French iTunes case, attackers were able to operate their e-mail scam for eight hours before automated filters began to catch on, Agari said. They used e-mail accounts hosted through a small Belgian cloud company that wasn't a known offender on global threat lists. 

Attackers frequently use small hosting providers to execute their schemes because the companies often lack checks in place to catch fraudulent users, unlike, say, Amazon.com or Google, said Apparao. His company wasn't able to determine whether users clicked links contained in the e-mails, or how many were tricked into giving away passwords.

This increasingly popular technique is known in the industry as "snowshoe" spam. (The name refers to the small footprints it leaves.) This differs from the more commonly known spear-phishing attacks, which target specific, often-important people with personalized messages sent one by one. Craig Williams, a senior manager at Talos, said the amount of snowshoe spam has more than doubled in the past two years and now accounts for more than 15 percent of all junk messages distributed globally.

Snowshoe attacks continue to cause "severe" problems for spam filters, Cisco said. It's one of many vexing problems for the industry. Global spending on cyber-security technology is projected to surpass a record $83.6 billion in 2015, according to an estimate by researcher Gartner.

A separate attack, also in October, involved 169 e-mails targeting Italian PayPal users, Agari said. The messages came from a data-hosting company in France that hadn't been included on major blacklists before the attack. These e-mails, like most effective spam, didn't include attachments, which can be quickly scanned and flagged as malicious. Because Web links take longer to crawl, many filters don't bother.

As artisanal spam becomes a bigger problem, the cyber-security industry is pushing for adoption of new protections that could save our in-boxes. One, called DMARC, is a global registry that lets retailers and other companies register the servers they use to send the kind of mass mailers some people enjoy receiving. Messages purporting to be from those companies but coming from an unregistered address would get flagged. It's a compelling idea, but as with most proposed solutions, trying to get everyone on board has been costly and time-consuming.

CES 2016 photos:The unexpected...?

EHang 194 octocopter

No need for a runway with the EHang 184 AAV system. You can take off and land vertically with one-click control. A trip can last up to 23 minutes at 60 mph. It's not exactly a drone, since a drone by definition is unmanned. But it uses the same technology and will 

need to pass some degree of regulatory issues before it can go on sale

Chip K9 robot dog

No more dog hair on the couch with Chip the K9 robot dog. Currently part of an Indiegogo 

campaign, this is the perfect low-maintenance pe.

WonderWoof smart bowtie

The WonderWoof bills itself as a fashion forward activity-tracking device so that a dog can 

be as dapper and stylish as its owner

Casino...& Romance...February 13th @ 7:30 pm

How Facebook Makes Us Dumber (Bloomberg)

Why does misinformation spread so quickly on the social media? Why doesn’t it get corrected? When the truth is so easy to find, why do people accept falsehoods?

A new study focusing on Facebook users provides strong evidence that the explanation is confirmation bias: people’s tendency to seek out information that confirms their beliefs, and to ignore contrary information.

Confirmation bias turns out to play a pivotal role in the creation of online echo chambers. This finding bears on a wide range of issues, including the current presidential campaign, the acceptance of conspiracy theories and competing positions in international disputes.

The new study, led by Michela Del Vicario of Italy’s Laboratory of Computational Social Science, explores the behavior of Facebook users from 2010 to 2014. One of the study’s goals was to test a question that continues to be sharply disputed: When people are online, do they encounter opposing views, or do they create the virtual equivalent of gated communities?

Del Vicario and her coauthors explored how Facebook users spread conspiracy theories (using 32 public web pages); science news (using 35 such pages); and “trolls,” which intentionally spread false information (using two web pages). Their data set is massive: It covers all Facebook posts during the five-year period. They explored which Facebook users linked to one or more of the 69 web pages, and whether they learned about those links from their Facebook friends.

In sum, the researchers find a lot of communities of like-minded people. Even if they are baseless, conspiracy theories spread rapidly within such communities.

More generally, Facebook users tended to choose and share stories containing messages they accept, and to neglect those they reject. If a story fits with what people already believe, they are far more likely to be interested in it and thus to spread it.

As Del Vicario and her coauthors put it, “users mostly tend to select and share content according to a specific narrative and to ignore the rest.” On Facebook, the result is the formation of a lot of “homogeneous, polarized clusters.” Within those clusters, new information moves quickly among friends (often in just a few hours).

The consequence is the “proliferation of biased narratives fomented by unsubstantiated rumors, mistrust, and paranoia.” And while the study focuses on Facebook users, there is little doubt that something similar happens on other social media, such as Twitter -- and in the real world as well.

Striking though their findings are, Del Vicario and her coauthors do not mention the important phenomenon of “group polarization,” which means that when like-minded people speak with one another, they tend to end up thinking a more extreme version of what they originally believed. Whenever people spread misinformation within homogenous clusters, they also intensify one another’s commitment to that misinformation.

Of the various explanations for group polarization, the most relevant involves a potentially insidious effect of confirmation itself. Once people discover that others agree with them, they become more confident -- and then more extreme.

In that sense, confirmation bias is self-reinforcing, producing a vicious spiral. If people begin with a certain belief, and find information that confirms it, they will intensify their commitment to that very belief, thus strengthening their bias.

Suppose, for example, that you think an increase in the minimum wage is a sensational idea, that the nuclear deal with Iran is a mistake, that Obamacare is working well, that Donald Trump would be a fine president, or that the problem of climate change is greatly overstated. Arriving at these judgments on your own, you might well hold them tentatively and with a fair degree of humility. But after you learn that a lot of people agree with you, you are likely to end up with much greater certainty -- and perhaps real disdain for people who do not see things as you do.

On the basis of all the clustering, that almost certainly happened on Facebook. Strong support for this conclusion comes from research from the same academic team, which finds that on Facebook, efforts to debunk false beliefs are typically ignored -- and when people pay attention to them, they often strengthen their commitment to the debunked beliefs.

Can anything be done? The best solution is to promote a culture of humility and openness. Some people, and some communities, hold their own views tentatively; they are interested in refutation, not just confirmation. Moroever, those who manage social media (such as Google) can take steps to allow people to assess the trustworthiness of what they are seeing, though these efforts might be controversial and remain in a preliminary state.

In the midst of World War II, a great federal judge, Learned Hand, said that the spirit of liberty is “that spirit which is not too sure that it is right.” Users of the social media are certainly exercising their liberty. But there is a real risk that when they fall prey to confirmation bias, they end up compromising liberty’s spirit -- and dead wrong to boot.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:

Cass R Sunstein at csunstein1@bloomberg.net

China's Terrible Start to 2016 Has Beijing Fighting Market Fires (BusinessWeek)

China has started 2016 in fire-fighting mode.

After three months of relative calm in the nation’s $6.5 trillion stock market, a 7 percent rout to open the new year prompted government funds to prop up share prices on Tuesday, according to people familiar with the matter. The central bank injected the most cash since September into the financial system to keep a lid on borrowing costs, while the monetary authority was also said to intervene in the currency market to prevent excessive volatility.

With Chinese shares and the yuan posting their worst starts to a year in at least two decades, the ruling Communist Party is being forced to scale back efforts to let markets have more sway in the world’s second-largest economy. Private data this week showed the nation’s manufacturing sector ended last year with a 10th straight month of contraction, amplifying concern that the weakest economic growth in 25 years will fuel capital outflows.

“There’s no doubt China wants to liberalize markets, but it’s happening at such a time that it’s very difficult to do in an orderly manner,” said Ken Peng, a strategist at Citigroup Inc. in Hong Kong.

While Chinese policy makers have said freer markets are integral to their plans to make the country’s economic expansion more sustainable, authorities are also concerned that sinking asset prices will weigh on business and consumer confidence. Capital outflows from China swelled to an estimated $367 billion in the three months ended November, according to data compiled by Bloomberg.

The stock market’s selloff on Monday was triggered by this week’s disappointing manufacturing data, along with investor worries that an expiring ban on stake sales by major shareholders would unleash a flood of sell orders at the end of this week. Those concerns eased on Tuesday as people familiar with the matter said regulators plan to keep the restrictions in place beyond Jan. 8.

To support share prices, government funds targeted companies in the finance and steel sectors, among others, said the people, who asked not to be identified because the buying wasn’t publicly disclosed. The plunge on Monday triggered the nation’s circuit breakers on their first day, dealing a blow to regulatory efforts to restore calm to a market where individuals drive more than 80 percent of trading. The CSI 300 Index of large-cap shares rose 0.3 percent at the close on Tuesday.

Yuan Intervention

"Unfortunately, I think the reality is that we still need some of that state support or intervention, partly because of the investor base you have in China,” Tai Hui, the Hong Kong-based chief Asia market strategist at JPMorgan Asset Management, said at a briefing. “You simply can’t withdraw everything at the same time."

Policy makers went to extreme lengths to prop up share prices in the midst of a $5 trillion rout last summer, including ordering equity purchases by state funds, suspending initial public offerings and allowing trading halts that froze hundreds of mainland-listed shares.

In China’s foreign exchange market, the central bank intervened on Tuesday through state-owned commercial banks, according to a person with direct knowledge of matter. The onshore yuan strengthened 0.18 percent to 6.5219 at 5:43 p.m. local time, following a 0.62 percent drop on Monday. That was the biggest decline to start the year since 1994, when the official exchange rate tumbled as China ended a dual-currency system.

The central bank’s intervention followed a reverse-repo operation on Tuesday that added 130 billion yuan ($19.9 billion) to the financial system, far exceeding the 10 billion yuan drained by maturing contracts. The overnight repurchase rate, a gauge of interbank funding availability, fell one basis point to 2.01 percent as of 4:30 p.m. in Shanghai, according to a weighted average from the National Interbank Funding Center. It climbed to 2.12 percent on Dec. 31, the highest since April.

Market Meddling

Of course, China isn’t the only country with a history of intervention in markets. Hong Kong authorities bought $15 billion of shares to help defend the city’s currency peg during the Asian financial crisis in 1998, while the U.S. Securities and Exchange Commission temporarily banned short selling on some stocks during the global financial crisis.

"Any government that sees some very unstable market movements these days cares," said Khiem Do, the Hong Kong-based head of multi-asset strategy at Baring Asset Management Ltd., which oversees about $45 billion. ”The U.S. cares, Europe cares, Japan cares, and I’m not surprised China also cares.”

For some investors, China’s meddling in markets has gone too far. When the six-month ban on selling by major shareholders was announced in July, it drew criticism from major money managers including Templeton Emerging Markets Group and UBS Wealth Management. At the end of last month, all seven strategists and fund managers surveyed by Bloomberg said they expected regulators to let the restriction lapse this week.

Market intervention is pushing domestic valuations further away from those in freely-traded markets just across the border in Hong Kong. The offshore yuan’s discount to the mainland rate is quadruple the average gap recorded in November, while yuan borrowing costs in the two cities are drifting apart. Dual-listed shares are now 38 percent more expensive in Shanghai after trading at parity as recently as November 2014.

Even after Monday’s drop, the median stock on mainland exchanges trades at about 65 times reported earnings -- more than three times higher than the multiple on U.S. bourses.

“We don’t really like market intervention,” said Stephen Ma, a Hong Kong-based senior portfolio manager at LGM Investments Ltd., whose parent oversees more than $254 billion. “The government should have learned their lesson last summer.”

E N M I O P I N I O N (Ricardo Tribin)

Es importante saber con qué se triunfará

Como es esto?, se preguntarán algunos. Quizás consultando una bola de cristal o mandándonos a leer las cartas?. No, nada de eso, sería la más cercana respuesta. Creo que el componente fundamental está en que es importante saber nuevas cosas con las que en el futuro se triunfará, y ello está basado en la capacitación.

Sí, pero es que el estudio no es fácil, y a esta edad, dirían bien el adolescente o el de mayor tiempo. Pues sí, pero nunca resulta tarde para poder aprender. El esfuerzo en formarnos en muchos casos dará su fruto, siempre y cuando tomemos la acción pronta de llevar la acción a cabo.

Un pueblo ignorante aprueba todo lo que le pongan enfrente de sus ojos puesto que su poder de análisis y crítica, sin educación se ve muy diezmado. De ahí que el estudio sea una fuente vital para salir adelante, y la fuente de solución a muchas de las problemáticas actuales.

http://ricardotribin.blogspot.com

Miami, Enero 6 de 2016

The Ghosts of Baha Mar: How a $3.5 Billion Paradise Went Bust (BusinessWeek)

Beyond the tropical waters, across palm-fringed sands and behind locked gates, looms Baha Mar -- the largest and, at $3.5 billion, priciest resort in the Caribbean.

Here, no one frolics pool-side, pina colada in hand, or hits irons on the Jack Nicklaus golf course. No slot machines jingle-jangle in the casino. The Flamingo Bar, the Brasserie des Arts and the Cartier boutique lie dark. On this bright October morning in the Bahamas, all 2,200 guest rooms are empty.

The quiet is almost spooky here on the outskirts of Nassau, where the waterscape frills of nearby Paradise Island give way to the vast ghost-resort that is Baha Mar.

Just how the place ended up like this -- in a bankruptcy so colossal that it’s jeopardizing the Bahamas’s credit rating -- is the biggest business story to hit this Caribbean nation for as long as anyone here can remember. It stretches far beyond the white beaches and across time zones, to none other than the State Council of China.

‘Big Boys in the Room’

Turns out that even in paradise, local aspirations can collide with China’s global ambitions. Baha Mar may have been dreamed up in the vacationland of the Bahamas, but the central government in Beijing controls the development bank and construction giant that will determine its fate. And China, some Bahamians say, is playing tough as its state-run enterprises project money and influence around the world, including to this small island 180 miles off the coast of Miami.

“Their attitude is, ‘We’re the big boys in the room, we’ve got the money -- so you do what we say,’” says Dionisio D’Aguilar, a prominent businessman and former Baha Mar Ltd. director.

Time is short. Bahamian officials have been counting on Baha Mar to invigorate the tourist economy. The developers claimed the resort could single-handedly generate 12 percent of the country’s gross domestic product -- provided it ever opens.

Izmirlian, center, Export-Import Bank of China President Ruogu, left, and Bahama’s Deputy Prime Minister Symonette. 

Understanding the island’s predicament requires going back more than a decade to 2005 when Prime Minister Perry Christie reached an agreement with a local businessman named Sarkis Izmirlian to help revitalize Cable Beach, the most popular beachfront destination on New Providence Island.

Izmirlian, then just 32, seemed a natural choice. He’s from a wealthy family -- his father is Armenian peanut tycoon Dikran Izmirlian -- and lives on nearby Lyford Cay, a billionaire enclave. Izmirlian sank nearly $900 million into Baha Mar and recruited marquee-name partners like a Caesars Resort hotel.

Then the 2008 financial crisis hit, and would-be partners balked. When China State Construction Engineering Corp., the world’s second-largest contractor, approached Izmirlian about stepping in, he said yes. The company directed him to Export-Import Bank of China, or Exim, which promotes trade and investment under the direction of Beijing.

Seeing a way into U.S. markets, China State Construction promptly invested $150 million. Exim kicked in $2.45 billion in construction loans -- with the proviso that Izmirlian could never fire the Chinese builder, no matter what, and that workers from China would do the job. Flush with Chinese money, Izmirlian declared four Baha Mar hotels would open by 2014.

All this was documented in court filings, and supported by interviews with Christie and other Bahamians. The Chinese and Izmirlian declined interview requests.

Endless haggling complicated by language barriers ensued -- about payments, invoices, workmanship, on and on. Deadlines were set and promptly broken. Emails flew back and forth to Beijing.

Burst Pipes

In May 2014, Izmirlian appealed to an independent mediation service based in Washington, D.C., but the troubles multiplied. Pipes burst when inspectors tested the fire sprinklers and faulty balcony railings had to be reinforced, people with knowledge of the construction said. When Izmirlian complained, China delayed its money, one said.

As construction dragged on, Izmirlian and Christie flew to Beijing. There, officials assured them the resort would be ready to open on March 27. Upon his return, the developer hired 2,070 hotel workers, ran a global ad campaign and stocked the casino with $4.5 million in cash.

For Izmirlian the affair was becoming the ultimate contractor nightmare. He was spending an additional $4 million a month to pay staff for a hotel with no guests. Concerned that China State Construction might gain a tactical advantage by filing first, he secretly planned to have Baha Mar declare bankruptcy in the U.S. rather than the Bahamas, whose laws would make liquidation all but inevitable.

He didn’t even alert the prime minister for fear he would tip off the Chinese, says D’Aguilar, the former resort director.

Baha Mar Ltd. filed for bankruptcy in Delaware on June 29 -- and all hell broke loose. China State Construction accused Izmirlian of disrupting the project with endless design changes.

“Baha Mar Ltd.’s decision to file for bankruptcy is the direct result of its failure to secure adequate financing and its mismanagement,” the Chinese company told the court.

Christie’s foreign minister, Fred Mitchell, spoke out in an August speech celebrating the end of slavery on the island, saying “the attempt to keep us bondsmen and slaves does not and has not stopped.”

At the Emancipation Day Service, Mitchell continued, saying: “It is therefore no surprise then that an investor -- because he has the word billionaire behind his name -- would think, would have the temerity to believe, that he can challenge the leader of our country.”

As the dispute dragged into September, a Delaware judge dismissed the U.S. bankruptcy and a Bahamian judge put provisional liquidators in charge, rendering Izmirlian’s $900 million investment nearly worthless. In October, they hosted negotiations at a nearby hotel. It was a bizarre scene, with Bahamian dancers gyrating in hot pants in the lobby as Chinese men in black suits hunched over laptops.

Still Negotiating

In November, Izmirlian said he was still negotiating with Exim and hoped to remain involved. Failing that, he’s also sued in the U.K., claiming about $192 million in damages for a breach of contract, a figure that could grow as another winter tourist season passes with the resort still in limbo.

How it’ll end is anyone’s guess. Fernando Menendez, a senior fellow at Washington think tank Center for a Secure Free Society, says the episode says less about the Bahamas or Izmirlian than it does about China and its state-owned enterprises.

China Exim wielded billions to guarantee work for one of its biggest customers, China State Construction. How and when that work got done didn’t really matter: Exim made sure the state-run company could never be fired. 

“State-owned enterprises don’t function as competitive entities,” Menendez says. “They’re protected from failure.”

Christie says he’s still optimistic the resort can open. In December, Exim said a number of potential investors had expressed interest. These include Guo Guangchang, chairman of a non-state Chinese conglomerate called Fosun Group, people familiar with the situation say. Fosun already owns stakes in Club Mediterranee SA and Cirque Du Soleil Group.

Back in Nassau, people worry that even with new investors, the promised economic boost will take time. It could be 2018 before Baha Mar makes a meaningful contribution to the economy, according to Standard & Poor’s, which lowered its Bahamas rating to BBB- and warned it could be heading for junk.

For now, Baha Mar faces mold and corrosion as it bakes in the tropical heat. Its pink and cream towers are ringed by a chain-link fence and blue tarps cover unused supplies. At night, lights pop on in several rooms -- a move the Bahamians hope will ward of the desolate air of this Caribbean ghost.