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Generational Dynamics World View
*** 16-Sep-17 World View -- What you should do about the huge Equifax data breach

This morning's key headlines from GenerationalDynamics.com
  • The huge Equifax data breach puts makes many people vulnerable to identity theft
  • Steps you should consider taking to protect yourself
  • Equifax and the rise of Generation-X
  • Release of DOJ memo reveals massive criminal fraud by JP Morgan in financial crisis

****
**** The huge Equifax data breach puts makes many people vulnerable to identity theft
****


[Image: g170915b.jpg]
Equifax headquarters

Here's something that I wrote in my Feb 26 2013 World View article:

> [indent]<QUOTE>"Apparently, Equifax's networks and databases have
> been hacked

>
> I use different e-mail addresses for almost everything. That way,
> I know whether a company is using my e-mail address for spam.
>
> In 2005, I registered with the Equifax web site to do some
> research for a brief period. Starting about a month ago, I've
> been receiving several spam messages a day to that e-mail address.
>
> Therefore, I conclude that Equifax's networks and data bases have
> been hacked, and e-mail addresses have been stolen at the very
> least. Whether Equifax's credit card databases have also been
> hacked is something I have no way of knowing."<END QUOTE>
[/indent]

I still receive spam messages to that e-mail address. The latest one
was from someone named Natasha who is writing to "foreigners as they
are fascinated by the beauty and simplicity of Slavic women," and by
the "simplicity and the intense aura of emotions which we have."
Tempting, huh?

Apparently, Equifax didn't take network security seriously, even after
they'd already been hacked. This doesn't surprise me in the least.
When I was working for Ability Networks, their servers were hacked by
a combined Phishing/Ransomware attack. No data was stolen, but I
warned my employer that they should at least encrypt the social
security numbers in their main data base. My warnings were ignored
because spending money on security doesn't generate sales.

So here it is over four years later, and Equifax's data bases have
been the target of possibly the worst data breach in history. Some
143 million people had their personal information stolen, including
social security numbers names, driver's license numbers, dates of
birth, and so on. Most of the people are Americans, but some are from
Canada, Britain and Europe, and possibly other countries as well.

Somebody who had all that information about you could take out a big
loan in your name, commit fraud in your name, or steal your entire
identity.

Somebody now has a copy of all that Equifax information in their own
database. They can start selling it to other people, or they could
use it for other purposes. Since social security numbers can't
change, this can happen for years to come. Economist and Fox Business

****
**** Steps you should consider taking to protect yourself
****


I got a phone call today from a perky-sounding girl who said that I
qualify for a big discount on the vacation of my dreams, and all she
needs is a little information. This is a typical scam for collecting
information, sometimes to augment additional information available to
the hacker, to get a complete picture to be used for fraud or identity
threat. Do not, under any circumstances, give any information to
anyone under such circumstances, even the name of your pet cat.

A variation is a "Spear Phishing" attack. You receive an e-mail
message from someone you know, perhaps your boss or a friend or
coworker or your bank or your broker. The message contains personal
information, proving that the message is legitimate. It asks to click
on a link, which ends up infecting your computer with malware,
allowing the hacker to steal your banking information. The e-mail
information was carefully crafted to fool you, perhaps combining
information from several sources, such as the Equifax hack, plus your
Facebook page, plus a scam phone call. If you receive an e-mail
message that asks you to download something, even if it's from someone
you know, then contact the supposed sender, and ask him why the hell
he's so stupid that he's sending you something so dangerous and
inappropriate.

For the protection of your computer, you should make sure that you
have anti-virus and anti-malware software installed, and that it's up
to date.

For protection from identity theft, you might consider getting a
"credit lock" or "credit freeze." This is a service offered by each
of the three credit reporting agencies, Equifax, TransUnion and
Experian, for about $10 per year each. Equifax is waiving its fee for
one year, but you'll still have to pay the others. This service
prevents someone from getting your credit report without your
permission, blocking them from taking out a loan in your name. It's a
pain in the neck to administer, but you may consider it worth the
trouble.

The following are links to articles that provide additional
information on the above and other steps to protect yourself: Federal Trade Commission and CBS News and NPR and CNBC and Engadget

****
**** Equifax and the rise of Generation-X
****


As I wrote above, Equifax obviously didn't really care much about
network security. In my experience, Gen-Xers ignore warnings about
things like security if the warnings come from a Boomer, of whom many
Gen-Xers are often contemptuous.

Having been in the computer industry my entire life, I've seen several
disasters for exactly that reason. At Computer Sciences Corp., a
Gen-Xer sabotaged someone's code. At a couple of places, including
Fidelity and CACI, managers fired people who warned that the project
was headed for failure, and then the project failed anyway. Every
disaster of this type that I've personally seen has always involved a
dysfunctional action by a Gen-Xers to sabotage a Boomer. I've written
about this on my web site dozens of times over the years, and it
apparently stems from their anger at their parents' divorce in the
1980s.

The most amazing example is what happened on the afternoon of October
1, 2013, when President Obama stood up at a press conference to launch
Obamacare. When a reporter asked why so few people could log on, he
answered that millions of people were enrolling for insurance, so the
web sites were slow. As it turned out, only six people across the
country were able to enroll on that day.

How is it possible that Obama and the entire White House were so
completely blindsided by the disaster that was already unfolding that
they didn't even know what was going on hours after the launch had
begun? How many people had to lie? How many people had to commit
fraud? How many people had to be silenced or fired? How many layers
of management were lied to, to prevent Obama from knowing the size of
the disaster, hours after the disaster was already in progress?

I wrote about this at length in "Healthcare.gov -- The greatest software development disaster in history". As I described, the reason that Obama was
completely blindsided on Oct 1, 2013, is because the thousands of
people on the healthcare.gov project all lied, every one of them.
Obama got what he deserved, and the rest of the country got screwed.

This is the world we live in now, where black is white and white is
black, whether you're in the mortgage industry, the computer industry,
the newspaper industry, or any other industry, and anyone who talks
about what's really going on is subjected to being silenced, one way
or another.

Here's something that a web site reader recently wrote to me:

> [indent]<QUOTE>"I have spent my entire adult life in mortgage lending
> and the amount of corruption is stunning. I have in the past tried
> to report issues. What I got was referred to agency after agency
> to ending in frustration. There was even one time that after
> getting my personal info the guy started asking me if I had some
> kind of grudge. I said no but asked how that would matter anyway
> if the information was correct. He then started just burrowing
> into me, didn't ask a thing about the subject I called about.
>
> It's like there is this secret club with wholesalers and
> government workers. Like nothing I had seen before. Scared me;
> thought I was going to be targeted."<END QUOTE>
[/indent]

These things were almost unthinkable prior in the 1980s and 1990s,
when the Silent and Boomer generations were in charge. They only
became possible with the rise of Generation-X.

So now getting back to the situation at Equifax, it's even a lot worse
than described above.

Equifax learned about the hack on July 29, but didn't inform the
public for several weeks. Two days later, on August 1, three Equifax
executives sold $1.8 million worth of shares, allegedly to avoid
losing money from the stock price falling when the breach was made
public. Equifax claims that they were going to sell the shares
anyway, and didn't know about the breach.

Equifax itself is in serious trouble for incompetence in protecting
consumers' personal data. The attackers breached Equifax's server in
April because of a vulnerability in the "Apache Struts" web
application software. The Apache Software Foundation had released a
patch for the vulnerability in March, but Equifax didn't bother to
install the patch, which would have taken minutes.

So Equifax is in trouble for multiple reasons: They didn't install the
patch; when the breach was discovered, they didn't notify anyone for
weeks; and executives sold their shares, possibly violating insider
trading laws. And we won't even both to list the ways in which
Equifax botched the announcement of the breach. Based on my
experience and years in the computer industry, these are the actions
of a bunch of dumb, incompetent kids who think they know everything
and really know nothing. They're getting what they deserve. Law.com and Wired and
Engadget

Related: Obamacare: 500M lines of code, $500M, only 60% completed (01-Dec-2013)

****
**** Release of DOJ memo reveals massive criminal fraud by JP Morgan in financial crisis
****


I've been writing for years that it was mathematically provable that
the banks had committed massive fraud in knowingly selling defective
subprime mortgage backed synthetic securities, causing the financial
crisis. These fraudulent synthetic securities were created by
Gen-Xers who earned Master's degrees in "financial engineering" in the
1990s, and applied their skills to defraud their fathers' generation
in the 2000s. It's provable that the fraudulent securities were
created by Gen-Xers, since their Boomer bosses had no clue how to do
it. But it's also provable that their Boomer bosses knew what was
going on, because the financial engineers were taking B-rated
securities, slicing and dicing them, and magically converting them
into AAA-rated securities, which was mathematically impossible. I
wrote about all this in my 2010 article, "Financial Crisis Inquiry hearings provide 'smoking gun' evidence of widespread criminal fraud".

I've repeatedly accused the Obama administration of purposely covering
up this criminal activity, and instead allowing JP Morgan, Citibank,
and other banks to contribute billions of dollars to Obama's campaigns
and pet projects, effectively becoming co-conspirators in the massive
criminal fraud that caused the financial crisis.

A 2013 memo from the Obama Justice Department, obtained through the
Freedom of Information Act, was just released, and it proves that
these accusations were all true:

> [indent]<QUOTE>"By this action, the United States seeks to recover
> civil penalties [against JPMorgan Chase] for a fraudulent and
> deceptive scheme to package and sell residential mortgage-backed
> securities [that the bank] knew contained a material amount of
> materially defective loans. ...
>
> JPMorgan knowingly securitized and sold billions of dollars of
> mortgage loans that were originated in material violation of
> underwriting guidelines and law."<END QUOTE>
[/indent]

Other revelations in the 92 page memo include:
  • JPMorgan Chase knew that “many of these loans were tainted
    with fraud” and “knowingly misrepresented” that the loans met its
    underwriting guidelines, even though they clearly did not.

  • "These fraudulent misrepresentations [cost investors] to suffer
    billions of dollars in losses."

  • The bankers and traders who committed the fraud were rewarded with
    bonuses running into millions of dollars each.

  • CEO Jamie Dimon became aware in October 2006 that the synthetic
    securities were failing, but: "despite knowledge at the highest levels
    that underwriting had deteriorated across the industry and early
    payment defaults were spiking, JPMorgan continued to purchase and
    securitize subprime loans without addressing the known breakdown of
    its due diligence practices and without disclosing its knowledge to
    investors." This is exactly what other banks did, as I wrote about
    years ago. As the fraud was being discovered, bankers doubled or
    tripled the volume of their sales, in order to make as much as they
    could, while they could.

The 2010 article that I wrote was about Citibank, and it proved
mathematically that Citibank must have committed exactly this kind of
criminal fraud. The memo about JP Morgan shows that the Obama Justice
Department was fully aware of this criminal fraud, and was committed
to using the Justice Department to cover up the criminal fraud in
return for billions of dollars in payments and contributions.

This week there's a lot of stuff coming out about the Obama
administration, such as Susan Rice's illegal unmasking of political
opponents, confirmation that the Lois Lerner's IRS illegally targeted
political opponents. I'm a pretty cynical person. I look upon this
as happening because the Obama administration had a Generation-X
culture, with little regard for the law or common sense. Let's hope
that the Boomer culture of the Trump administration does better.
Vanity Fair

Related Articles


KEYS: Generational Dynamics, Equifax, TransUnion, Experian,
Spear Phishing, Healthcare.gov, Obamacare, Generation-X,
JPMorgan Chase, Jamie Dimon, Citibank

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John J. Xenakis
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16-Sep-17 World View -- What you should do about the huge Equifax data breach - by John J. Xenakis - 09-15-2017, 10:28 PM
RE: Generational Dynamics World View - by Galen - 10-25-2017, 03:07 PM
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