Friday's Quick Note 03/22/2013

Good Friday Morning...  That great day when the week's stress comes to an end, and we can look forward (if we are lucky) to spending time with our families and friends.

In most markets yesterday, there is little to review.  The markets were choppy everywhere.  Cyprus continues to "worry", but asset pricing does not show much angst. 

US $

I'm very surprised at the strength of the Euro.  One would think with the problems in Cyprus and the fall over to Greece, that the Euro would be much weaker. 

The US economic news has been really good, and certainly there is little good economic news in Europe (even if they did not have all these small country crises). 

Folks, currencies and equity markets are indicating the investors (hedge funds and commercials) are unconvinced that the US is the place to invest with all the debt the USA has accumulated. 

According to my theory, the investors don't want to invest in the US currency or bonds, but where do they go?  No currency that is freely traded and no bond markets that are freely traded are looking like good investments. 

Please consider: The Bank of Japan is printing money like there is no tomorrow.  The Bank of England and the UK are facing a triple-dip recession.  China is slowing, and their currency is not freely traded. Canada is showing some stress. All these factors only are allowing the US$ to remain afloat - not healthy.

China and Reserve Currency

As you likely know, the US $ is the reserve currency of the world.  China's actions over the last few years indicate they want to remove the US$ as the reserve currency.  For example, this morning a government spokesman in Beijing announced an agreement with Brazil for 190 billion renminbi worth of swap agreements between Brazil and China.  These swaps take the US$ out of the international trade into their own local currency. 

This is only one of many steps that China is taking to undermine the currency status of the US$.

Folks, also never forget that China's military is not a friend of the US or US allies (such as Japan, Taiwan, or South Korea). 

Ending This Report

My wife and I help with the Red Cross in this area.  This morning a family was burned out of their home on the Canadian Border.  We will prepare the relief measures, and all that takes time. 

We are also helping one of the local businesses whose point of sale and bookkeeping systems were compromised from the Internet.  Sigh... Even small business need to learn that if they attach to the Internet using it as a business medium, they need to protect their systems. 

I'll give you a hint from this small business.  The business never had a threat and system break-in until the local Internet Vendor  a month ago provided them with high speed DSL to the Internet, installed a wireless LAN, and gave every computer in their place access to the Internet -- including backup of their Accounting to the cloud.  (Before, their Internet access was limited to one POS computer using dial-up).  The local ISP installed the router, and configured the computers to access this. Was there any security implemented at the router level?  (Any at all, firewall? WEP passwords? monitoring? )  NO!  Then that means anyone coming into the parking lot could use that wireless Internet.  Whose responsibility was it to warn the business owner (and they are computer illiterate), and to make sure the security was there? 

POS systems are inherently insecure, and they need special attention if you do secure them, due to the fact they need to access accounting, charge card systems, an so-on.  So, usually they don't have much security, but they rarely have access to the Internet directly either.  The lack of security shows up in many ways, but the most usual one (from our observation of small business) is to have one user for the POS Operating System that is the same user as on the Accounting System OS.  And that user on the POS has no password ('cause it is a pain if anything changes in the Accounting system regarding groups and users that causes the POS to have to change). 

(And if any of you that run a medium size retail business think they should go out of business, then be thankful you have the money to hire someone like myself to help you with security, and you have something like Active Directory or LDAP to manage it.  Most small businesses do not have that money to design and maintain their networks and all the security.)

Almost no one I meet (except computer jocks in medium to large business) understand that anyone from the Internet can log onto your system.  Your only protection is passwords, firewalls, and encryption. And people have no idea that it is very easy at the Internet Point of entry (not just the ISP) to decode the headers to understand who the user is (for Windows people -- the user is where you define the users in Control Panel and set up passwords.) 

Folks, breaking into a system is relatively easy because of all the flexibility for logging in from the Internet.  It takes planning and expenses to protect the business.  Small businesses usually do not have the desire (or the money or both) to maintain security.  These problems are not what you would know as Virus and Trojan threats.  Those threats can be handled by Symante, McAfee, Sophos, and 100s of other vendors for a small amount (in context).  Those are necessary.  The local security of the system so that is protected and can be accessed only by those authorized is a much bigger threat and much more expensive to set up. 

And, if any of you jocks out there think you are protected, let me introduce you to Dark Hat and Anonymous.  However, small businesses are not likely to be threatened by them, and Small business owners must be helped to protect themselves because they do not even know their vulnerability until they've been attacked (and know they've been attacked). 

Of course, no one will read this blog, and even if you do, unless you are managing a large IT system, you cannot imagine the problems security raises at this point.

Have a good weekend, and be sure to hug your teenager this weekend.  I don't know how to help them really, but I know the current social environment is not easy for them to cope with.  Did you ever wish you could do something magical to help them?