A cyberattack ‘pandemic’ would be devastating—and may be inevitable
Why is the stock market on such a tear when the economy appears to be in ravages?
The reason is partly due to a quirk in the way major stock indices, like the S&P 500, are calculated, as Fortune’s Geoff Colvin explains. Because many indices are weighted by market capitalization—meaning that businesses with higher stock market valuations factor in the most—highly prized tech companies tend to dominate.
This situation has created something of a positive feedback loop. Since tech companies have generally benefited the most from the recent coronavirus pandemic—they’ve been lofted by people shifting commercial activities online—the strongest index players have only been getting stronger. As the tech industry surges, so does its bellwether stocks, so too does the stock market at large—at least as measured by many major indices.
It’s as though, instead of a rising tide lifting all boats, the swelling waves somehow caused the largest Carnival Cruise megaships to grow more mammoth in size, even as lesser seafaring vessels capsized.
To illustrate how the situation might have been different, Colvin conjures a nightmare scenario—a Y2K, but real. “Suppose a novel computer virus rather than a coronavirus had struck the economy, aimed at the tech giants, hobbling them.” If such a catastrophe were to occur, the tech giants would be brought to their knees, and “their sudden crisis would initially cause the whole S&P 500 index to drop like a cannonball.”
Perhaps that imagined devastation is not so far-fetched. A particularly bad string of software vulnerabilities enabling a “wormable” cyberattack—one capable of self-propagating—could cause unprecedented destruction. The WannaCry cyberattack of 2017 gave the world a minor taste of what that might look like. Later that same year, the NotPetya cyberattack wreaked havoc, causing billions of dollars in damage and crippling several multinational corporations including Maersk and Merck.
In a blog post earlier this month, the World Economic Forum warned that the world should start planning for such a contingency now. “Our ‘new normal’ isn’t COVID-19 itself—it’s COVID-like incidents. And a cyber pandemic is probably as inevitable as a future disease pandemic,” the authors wrote. “We should prepare for a COVID-like global cyber pandemic that will spread faster and further than a biological virus, with an equal or greater economic impact.”
Of course, if that happened, we would have bigger problems than a crashing stock market.
Bellatrix Lestrange for hire. Researchers at Citizen Lab, an Internet watchdog group at the University of Toronto, exposed a sprawling hack-for-hire operation that it has attributed to an obscure Indian company called BellTroX InfoTech Services. The New Delhi-based firm, whose CEO denied the allegations, is believed to have targeted thousands of people around the world, including government officials, businesspeople, journalists, and others. Federal prosecutors are reportedly undertaking a criminal investigation.
Land of the Rising (Ransom) Sum. Japanese automaker Honda is in the midst of recovering from a ransomware attack. The incident has forced the carmaker temporarily to shut down some production plants, and its customer and financial services remain offline. Also in Japan, Nintendo doubled its estimate of the number of so-called Nintendo Network ID accounts impacted by a recent hacking attempt from 160,000 to 300,000. The hackers potentially obtained people's personal information, and could have spent people's virtual funds.
Black Lives Matter. Last week Reddit cofounder Alexis Ohanian stepped down from the company's board and urged it to replace him with a black candidate. The forum website has abided his request, selecting Michael Seibel, CEO of Y Combinator and cofounder of Justin.tv, a startup that became Twitch, as his replacement. Elsewhere in Silicon Valley, Square and Twitter CEO Jack Dorsey has declared Juneteenth, aka June 19, a day recognizing the emancipation of slaves in the U.S., as a company holiday.
Make them pay. The latest multimillion dollar class action lawsuit settlement for credit bureau Equifax's 2017 data breach has received preliminary approval by a federal judge. Of the $30.5 million Equifax will be ordered to pay, $25 million will go...to Equifax itself! If the decision receives final approval in October, the money will be put toward making data security improvements at the company. Meanwhile, the Federal Communications Commission has proposed a $225 million fine for two health insurance marketers who spammed people with a billion robocalls.
*Knock, knock* Who's there? A TikTok terrorshow.
"If we can bank online, why can’t we vote the same way?" The question nags at members of modern-day democracies. Turns out we can't have nice things because the digital world is so terribly, horribly, mind-numbingly insecure, as Politico's Eric Geller lays out in an excellent piece of explanatory journalism.
Uber CEO and Rockefeller Foundation chief: American workers need a better safety net by Dara Khosrowshahi and Rajiv J. Shah
Could Windows PC makers follow Apple’s lead away from Intel chips? by Aaron Pressman
How Instacart fixed its A.I. and keeps up with the coronavirus pandemic by Jonathan Vanian
ONE MORE THING
To keep healthy—and, perhaps, as an antidote to cabin fever—I have been trying to up my push-up game. GQ has tips for people looking to boost the number of plank-to-floor exercises they can knock out. Now drop and give us 20 "eccentric loaded push series."