Thursday, October 30, 2014

Russia Behind Cyber Attacks?

This NY Times article suggests the US government believes they are. The recent attacks on White House computer systems is the focus of this article. However, we should keep in mind that Jim Rickards said that the August 2013 Nasdaq market disruption was never explained. He feels Russia was likely behind that as well. So here is another area where Rickards warnings may be proving correct.

And then today there was another similar market disruption for awhile at the New York Stock Exchange. In fact, this CNBC article references the August 2013 attack. 

This is just one more area we have to keep an eye on that can obviously impact the system. If foreign governments are able to disrupt (or even shut down) US markets for a period of time, that would clearly be a significant event. One that could trigger a market reaction. 

The list of things that go wrong is lengthy and it is no wonder that the IMF and BIS are constantly issuing warnings. Here are just some we have covered here:

- the above mentioned potential for cyber attacks on markets or banks

-a default on sovereign debt by a major nation (Argentina is in the middle of one now)

-a rollover in the stock market and/or housing market due to the ending of the QE program

-a debt implosion in China due to malinvestment over there that causes a selloff in their US holdings (stocks or bonds)

-weak bank balance sheets in the Eurozone (25 failed the recent stress test)

-the enormous amount of derivative products around the world and the non public disclosure of a large dollar amount of them

-geo political turmoil hurting global GDP - Ukraine, Middle East etc.

-possible signs of deflation taking hold despite massive central bank efforts to reflate

The list goes on and on.

But we have to point out that despite all the above, so far things have been relatively calm and stable. We see volatility flare up for sure in markets, but it has been contained so far. In 2015 we will see if the US economy can stand on its own feet with the high level of Fed stimulus that has been required since 2008. We will see if geo political hot spots get hotter or cool off. We will see if the Fed has gotten it right or badly miscalculated. 

Meanwhile, we apparently have Russia and probably China too out there testing to see if they can disrupt things in the US with cyber attacks. We will have our hands full following it all.

No comments:

Post a Comment