J. G. Sandom ~ Author

dEATH in dAVOS — New study on Millennials paints a gloomy picture; no wonder they like dystopian novels

New report on Millennials in the UK paints a gloomy picture. “Millennials are the first generation unlikely to achieve a higher standard of living than their parents enjoyed. They’ve been priced out of the housing market, unemployment is almost a given and they’ve been saddled with economic debt which they did nothing to accumulate,” says novelist Louise O’Neill. “The anger they have about this, coupled with their genuine concern about social, political, and ecological crises, has created an atmosphere of fear and anxiety. That’s why so many of this generation are drawn to dystopian fiction.” This anger and alienation are at the heart of the character in the novel I've just finished writing a few months ago, dEATH in dAVOS.

From left, Natalie Dormer and Jennifer Lawrence in The Hunger Games: Mockingjay – Part 2.

In debt, out of luck: why Generation K fell in love with The Hunger Games

The theme of rebellion in the dystopian fantasy – whose final instalment is about to hit cinemas – strikes a chord with teens and twentysomethings

Sarah Hughes

The brutal, bleak series that has captured the hearts of a generation will come to a brutal, bleak end in November when The Hunger Games:Mockingjay – Part 2 arrives in cinemas. It is the conclusion of the Hunger Games saga, which has immersed the young in a cleverly realised world of trauma, violence, mayhem and death.

For fans of Suzanne Collins’s trilogy about a young girl, Katniss Everdeen, forced to fight for survival in a country ruled by fear and fuelled by televised gladiatorial combat, this is the moment they have been waiting for.

Since the first book in the trilogy was published in 2008, Collins’s tale has sold more than 65 million copies in the US alone. The films, the first of which was released in 2012, have raked in more than $2bn worldwide at the box office and made a global star of their leading lady, Jennifer Lawrence, who plays the increasingly traumatised Katniss with a perfect mix of fury and resignation. For the huge appeal of The Hunger Games goes deeper than the fact that it’s an exciting tale well told. The generation who came to Katniss as young teens and have grown up ploughing through the books and queuing for the movies respond to her story in a particularly personal way.

The Hunger Games: Mockingjay – Part 2 trailer

As to why that might be, the economist and academic Noreena Hertz, who coined the term Generation K (after Katniss) for those born between 1995 and 2002, says that this is a generation riddled with anxiety, distrustful of traditional institutions from government to marriage, and, “like their heroine Katniss Everdeen, [imbued with] a strong sense of what is right and fair”.

“I think The Hunger Games resonates with them so much because they are Katniss navigating a dark and difficult world,” says Hertz, who interviewed 2,000 teenagers from the UK and the US about their hopes, fears and beliefs, concluding that today’s teens are shaped by three factors: technology, recession and coming of age in a time of great unease.

“This is a generation who grew up through 9/11, the Madrid bombings, the London bombings and Islamic State terrors. They see danger piped down their smartphones and beheadings on their Facebook page,” she says. “My data showed very clearly how anxious they are about everything from getting into debt or not getting a job, to wider issues such as climate change and war – 79% of those who took part in my survey worried about getting a job, 72% worried about debt, and you have to remember these are teenagers.

“In previous generations teenagers did not think in this way. Unlike the first-era millennials [who Hertz classes as those aged between 20 and 30] who grew up believing that the world was their oyster and ‘Yes we can’, this new generation knows the world is an unequal and harsh place.”

Writer and activist Laurie Penny, herself a first-era millennial at the age of 29, agrees. “I think what today’s young people have grasped that my generation didn’t get until our early 20s, is that adults don’t know everything,” she says. “They might be trying their best but they don’t always have your best interests at heart. The current generation really understands that – they’re more politically engaged and they have more sense of community because they’re able to find each other easily thanks to their use of technology.”

 

From left, Emma Watson, Rupert Grint and Daniel Radcliffe in Harry Potter And The Prisoner Of Azkaban.

One of the primary appeals of the Hunger Games trilogy is its refusal to sugarcoat the scenarios Katniss finds herself in. In contrast to JK Rowling’s Harry Potter series, there are no reliable adult figures to dispense helpful advice and no one in authority she can truly trust (notably even the most likeable adult figures in the books tend to be flawed at best and fraudulent at worst). Even her friends may not always have her back, hard as they try – Dumbledore’s Army would probably find themselves taken out before they’d uttered a single counter-curse in the battlegrounds of Panem. At the end of the day, Katniss can only rely on one person, herself.

“Ultimately, the message of the Hunger Games is that everything’s not going to be OK,” says Penny. “One of the reasons Jennifer Lawrence is so good is because she lets you see that while Katniss is heroic, she’s also frightened all of the time. She spends the whole story being forced into situations she doesn’t want to be in. Kids respond because they can imagine what it’s like to be terrified but know that you have to carry on.”

It’s incontestable that we live in difficult times and that younger generations in particular may be more acutely aware that things aren’t improving any time soon, but is it a reach to say that fans of the Hunger Games are responding as much to the world around them as to the books?

“At heart the Hunger Games works because it’s a great story with a kick-ass and complicated female lead,” says Saci Lloyd, author of the young adult novel Momentum, which details life in a cruelly divided London of the near future. “I don’t think that the majority of young readers are connecting to it on a political level, but I do think that it taps into their sense of anxiety. It’s clear that today’s teenagers feel a great deal of anxiety, that they’re under a lot of pressure, both internal and external, and that depression rates are rising among teens. There’s a sense that the hyper-connected world can be overwhelming, that there are no clear boundaries any more and today’s teens always have to be ‘on’ – given all that, a girl with a bow and arrow sorting shit out is a lovely story.”

Last week, the Equality and Human Rights Commission painted a dire picture of the prospects of British teenagers relative to previous generations. Louise O’Neill, whose bleak but brilliant Only Ever Yours has struck a huge chord with the millennial generation, agrees that the popularity of dystopian tales such as the Hunger Games is an echo of the times. “Millennials are the first generation unlikely to achieve a higher standard of living than their parents enjoyed. They’ve been priced out of the housing market, unemployment is almost a given and they’ve been saddled with economic debt which they did nothing to accumulate,” she says. “The anger they have about this, coupled with their genuine concern about social, political, and ecological crises, has created an atmosphere of fear and anxiety. That’s why so many of this generation are drawn to dystopian fiction.”

Certainly there’s a sense that the Hunger Games trilogy was very prescient. When the first novel was published in 2008 the global recession was just beginning. Since then we’ve seen economic collapse in Greece, the Arab spring, civil war in Syria, the rise of Isis and the deaths of black men and women at the hands of the police in the US leading to the formation of the Black Lives Matter movement. Small wonder that the Hunger Games, with its tributes and brutal deaths, its armed rebellion in District 13 and its pleas by traumatised citizens for the state to stop killing its citizens, seems less like fantasy fiction and more like a dark reflection of our times.

“What works with the Hunger Games is that it’s really good about the way mass media makes a spectacle of brutality,” says novelist Daniel José Older, whose recent book for young adults, Shadowshaper, is an addictive story of magic, music, art and death on the streets of Brooklyn. “Whenever something awful happens and it gets shown repeatedly on TV, it really does make me think of those books. The idea that today’s teenagers respond so strongly because of what’s happening in the world is a simplification, but what’s interesting about the books is the way in which they take violence seriously and tackle the lasting effects of war and trauma. That’s what gives the work its power and makes it so unsettling.”

The Hunger Games continues to shape today’s stories, on both shelf and screen. Bookshop shelves are stuffed full of dark tales of bleak worlds, from Blood Red Road by Moira Young, to Veronica Roth’s Divergent, while the freshest new show of the year, Mr Robot, available in the UK on Amazon Prime instant video, feels like a New York-set reality-based companion piece to the Hunger Games, similarly driven by paranoia, trauma and betrayal. “Sometimes books arrive at the time you need them,” says Penny. “The Hunger Games is the right book for the right time – which is kind of frightening.”

TEEN MOVIES

Star Wars (1977)

The film that shaped a generation. The seventh instalment of the franchise,The Force Awakens, is the other most hotly anticipated movie of 2015.The Breakfast Club (1985)

Generation X is also called Generation Breakfast Club in honour of the John Hughes movies that raised them.

Clueless (1995)

This summer Salon.com chose Cluelessand its upbeat heroine Cher Horowitz as the film that marked the move from “Gen X angst to millennial optimism”.

Harry Potter (1997)

The other huge influence on early millennials – JK Rowling’s books, and the subsequent films – taught a generation to believe in magic and the power of friendship.

404 — Repressive govts use of surveillance tech slated to grow to $1.3B by 2019 as dual use tech flourishes

Many of the same tools that repressive governments seek from Western companies are vital for social media and other communications by political protesters and grass-roots organizers throughout the world. The software and other equipment are also used by American and other law enforcement agencies to track criminals or disrupt plots, and are needed to filter out unwanted content from most commercial and governmental networks and to keep them secure. Some argue that the global market for such technology is emerging as a 21st century version of the arms trade. The interception industry is growing rapidly, with worldwide sales estimated to reach $1.3 billion by 2019, according to Markets and Markets, a research firm. These kinds of regulations are covered in my latest novel, 4o4 - A John Decker Thriller, about the surveillance state, recently listed as a Top Ten Amazon Bestseller in Technothrillers. For more on this story, check out this article from The New York Times.

Battle Heats Up Over Exports of Surveillance Technology

By JAMES RISEN

WASHINGTON — Ayman Ammar and Rashid Albuni claimed to be computer technology distributors, operating through multiple corporations in Dubai, in the United Arab Emirates. The United States government, though, charged them with smuggling — of illegally shipping American equipment to the Syrian government that can help it monitor Internet traffic and spy on dissidents.

The Syrian case, in which the two men were fined last month for violating American economic sanctions against Syria, is one of the few the Obama administration has pursued to limit authoritarian governments from acquiring technology that enables censoring, spying and hacking.

That is largely because many of the same tools that repressive governments seek from Western companies are vital for social media and other communications by political protesters and grass-roots organizers throughout the world. The software and other equipment are also used by American and other law enforcement agencies to track criminals or disrupt plots, and are needed to filter out unwanted content from most commercial and governmental networks and to keep them secure.

Such dual-use technology is now at the center of a conflict between Silicon Valley and the administration over additional restraints on technology exports. The administration signed an international agreement in 2013 that calls for new curbs on exports of advanced surveillance technology to governments with troubling human rights records. The agreement adds the technology to a longstanding arms control pact that seeks to limit weapons exports to such governments.

Some argue that the global market for such technology is emerging as a 21st century version of the arms trade. To go along with their tanks, assault helicopters and fighter jets, repressive governments are now seeking the latest routers, servers and software from Silicon Valley or Europe.

“You have the professionals, the big firms that are very legitimate, and then you have some dodgy parts of the business, which, like gunrunning, is subterranean and shrouded in secrecy,” said Ronald Deibert, the director of Citizen Lab at the University of Toronto, which published information that alerted the Commerce Department to the Syrian smuggling case.

 The American tech industry mounted a fierce opposition after the Commerce Department issued a proposal in May for new licensing requirements on exports of technology that can be used for surveillance. The regulation was intended to abide by the 2013 pact, called the Wassenar Arrangement, signed by 41 countries, including the United States and most other major developed nations.

The administration has since quietly shelved the proposal. Computer industry executives complained that it was written so broadly that it would make it more difficult to sell a wide range of Internet-related equipment and software overseas. Even some privacy advocates thought the proposed regulation was poorly drafted and might hinder activists in developing countries from gaining access to the technology they need to protect their communications.

“Trying to differentiate it is impossible, it really is dual-use,” said Cheri F. McGuire, vice president for global government affairs for Symantec, a cybersecurity firm based in California. “Trying to put controls on exports would limit the positive aspects that this technology provides to protect and secure networks.”

But critics say that the tech industry in the West has for years taken advantage of the lax restrictions on such “dual use” technology to sell it to repressive countries.

In interviews, administration officials insist that they plan to issue a new regulation after more consultation with the tech industry, probably next year. One official explained that it was a new area of regulation and that the administration wanted to avoid unintended consequences.

The Syrian smuggling case shows how difficult it is to crack down on the flow of surveillance technology. Commerce officials learned of the illicit trading only after Canadian computer experts published findings showing that Syria was using technology from an American company, Blue Coat Systems, of Sunnyvale, Calif.

Through their smuggling operation, which began in 2010 and continued at least until 2013, Mr. Ammar and Mr. Albuni were able to ship Blue Coat equipment worth a total of $1.8 million to Syria, according to government documents in the case. (Blue Coat cooperated with the investigation, government officials said.) The two men used various corporations and operated out of some of Dubai’s most impressive addresses, including the world’s tallest residential building and a free-trade and technology hub.

Mr. Ammar and Mr. Albuni, of the United Arab Emirates, sought to hide the shipments by going through another distributor and listing the intended customers as Iraq, Afghanistan, Turkey, Egypt and the United Arab Emirates, all countries with records of human rights violations but that were deemed acceptable under existing United States rules. One official familiar with the investigation said the two men chose destinations that would not set off a licensing requirement.

The Obama administration has issued bans specifically on exports of surveillance technology only to Iran and Syria, while North Korea, Sudan and Cuba face export bans under broader American economic sanctions.

“There isn’t much regulation, or many rules on exports in this area,” said Fabio Pietrosanti, founder of the Hermes Center for Transparency and Digital Human Rights, a research group in Milan. “It is easy to bypass the rules for exports of surveillance technology in some countries.”

Some large companies have been accused of helping repressive countries exploit such dual-use systems. For example, Cisco Systems, the firm based in San Jose, Calif., that sells devices that are crucial to the Internet’s backbone, has faced a lawsuit in federal court in California from members of the Falun Gong, a Chinese spiritual movement. They claimed that the company deliberately customized router equipment sold to the Chinese government, enabling it to spy on members in China. The Chinese government has engaged in a long campaign of repression against the Falun Gong, contending that the group is a cult.

The case was dismissed last year, but the plaintiffs have appealed. A Cisco spokesman said the firm did not “customize our product in any way that would facilitate censorship or repression.”

At the lower end of the surveillance market are small firms that provide products designed to spy on people. These firms are in the so-called “lawful interception” business, selling malware and spyware to the police and other law enforcement agencies in the United States and Europe, as well as to governments. The interception industry is growing rapidly, with worldwide sales estimated to reach $1.3 billion by 2019, according to Markets and Markets, a research firm.

ISS World brings together interception companies and their customers in trade shows around the world that have been nicknamed the Wiretappers Ball by critics. ISS World is owned by Telestrategies, a Virginia based firm.

One of the businesses listed as attending a recent ISS World conference in Washington was the Hacking Team, an Italian interception firm whose computers were hacked in July. Many of the firm’s emails were publicly released and posted on the WikiLeaks website.

An analysis by Citizen Lab concluded that the leaked documents show the Hacking Team “aggressively courting authoritarian and repressive regimes.” Eric Rabe, a spokesman for the Hacking Team, said the company provided “software for use by law enforcement around the world for investigations of crime and terrorism,” adding that the firm asked customers to sign agreements on the appropriate use of the technology.

Overlooked in the debate over how to regulate the industry is the impact of surveillance on activists struggling to change repressive governments. “The harm to the individual is not very well understood,” said Clara Usiskin, a researcher in London studying the effects of surveillance on nine dissidents from three countries. “But it is clear that it has had a really profound effect on these people’s ability to engage in democratic activities.”

One Ethiopian immigrant has filed a lawsuit in federal court in Washington, accusing the Ethiopian government of hacking his personal computer while he was living in Maryland. He filed the suit under a pseudonym to protect friends and relatives in Ethiopia. The Ethiopian government is now seeking to have the case dismissed.

“They have done this a number of times against activists living abroad,” the immigrant said in a interview. “I have lived in this country more than 25 years, I’m a U.S. citizen.” He added: “Now I have to be careful about what I say and write. It’s a scary life.”

404 — Over objections of tech industry and civil liberties groups, Senate overwhelmingly passes controversial CISA bill

The Senate has overwhelmingly passed controversial cybersecurity bill CISA critics say will allow the government to collect sensitive personal data unchecked, over the objections of civil liberties groups and many of the biggest names in the tech sector who will be forced to hand over customer information in secret. The U.S. Chamber of Commerce (i.e. the Telecom industry) backed the bill. Presidential candidate Bernie Sanders voted against it but NONE of the Republican presidential candidates (except Lindsey Graham, who voted in favor) were present to cast a vote on the bill, including chickenshit Rand Paul, who has made privacy a central plank of his campaign platform . . . and yet he didn't dare go on the record with a vote! What a punk. This is a dark day indeed for the Internet. When the free exchange of ideas is stifled by warrantless mass surveillance, when companies are forced to be complicit in this causeless and due processless search and seizure, we don't just hand victory to all of those terrorists out there who are desperately trying to undermine our democracy and the Constitution upon which it's built, we also send a chilling message to every American: operate at your peril because we're watching you; we can arrest you at any moment; we can hold you indefinitely under the Patriot Act; or we can simply assassinate you extrajudicially with a drone. Probable cause and due process — where have you gone? The struggle to find a balance between our need for cybersecurity versus our Constitutionally guaranteed rights to freedom from unreasonable search and seizure is at the heart of my most recent novel, 4o4 - A John Decker Thriller, about the surveillance state, recently listed as a Top Ten Amazon Bestseller in Technothrillers. For more on this story, check out this article from The Guardian.

Senate intelligence committee chairman Richard Burr confers with committee vice-chair Dianne Feinstein and committee member Ron Wyden.

Senate passes controversial cybersecurity bill Cisa 74 to 21

Senate votes in favor of bill critics including Edward Snowden say will allow the government to collect sensitive personal data unchecked

Sam Thielman

The US Senate overwhelmingly passed a controversial cybersecurity bill critics say will allow the government to collect sensitive personal data unchecked, over the objections of civil liberties groups and many of the biggest names in the tech sector.

The vote on Tuesday was 74 to 21 in support of the legislation. Democratic presidential contender Bernie Sanders voted against the bill. None of the Republican presidential candidates (except Lindsey Graham, who voted in favor) were present to cast a vote, including Rand Paul, who has made privacy from surveillance a major plank of his campaign platform.

Ahead of the vote a group of university professors specializing in tech law, many from the Princeton Center for Information Technology Policy, sent an open letter to the Senate, urging them not to pass the bill. The bill, they wrote, would fatally undermine the Freedom of Information Act (Foia).

Led by Princeton’s David S Levine, the group joined a chorus of critics including many of the largest technology companies, notably Apple, and National Security Agency (NSA) whistleblower Edward Snowden in calling for Cisa to be scrapped.

Snowden, via Twitter, said that “a vote for Cisa is a vote against the internet.”

Cisa would “allow ‘voluntary’ sharing of heretofore private information with the government, allowing secret and ad hoc privacy intrusions in place of meaningful consideration of the privacy concerns of all Americans,” the professors wrote.

“The Freedom of Information Act would be neutralized, while a cornucopia of federal agencies could have access to the public’s heretofore private-held information with little fear that such sharing would ever be known to those whose information was shared.”

Despite protestations that Cisa was not a surveillance bill, co-sponsors Richard Burr and Dianne Feinstein discouraged their colleagues from voting for amendments to mitigate what senators called unreasonable invasions of privacy, including one notifying citizens that their data was being examined. Amendments from Ron Wyden, Al Franken, Patrick Leahy, Dean Heller and Chris Coons all failed, though Wyden’s failed by a very narrow vote.

The American Banking Association and the Telecommunications Industry Association (TIA) applauded the passage of the bill. “The legislation passed by the Senate today bolsters our cyber defenses by providing the liability protections needed to encourage the voluntary sharing of cyber threat information,” the TIA said in a statement. “We applaud the Senate for moving this important bill and urge Congressional leaders to act quickly to send this bill to the president’s desk.”

Cisa was negotiated and marked up in secret. Corporate lobbying group The US Chamber of Commerce has been the only consistent champion of the legislation outside the halls of the Senate; the editorial boards of the Wall Street Journal and the Washington Post both published opinions in favor of the bill today.

The data in question would come from private industry, which mines everything from credit card statements to prescription drug purchase records to target advertising and tweak product lines. Indeed, much of it is detailed financial and health information the government has never had access to in any form. The bill’s proponents said the data would be “anonymized”.

Cisa would create a program at the Department of Homeland Security (DHS) through which corporations could share user data in bulk with several US government agencies. In exchange for participating, the companies would receive complete immunity from Freedom of Information Act requests and regulatory action relating to the data they share. DHS would then share the information throughout the government

Among the bill’s opponents are industry groups representing a broad swath of tech companies, several of which have come out individually against the bill in addition to statements from industry trade groups.

Apple didn’t mince words in its opposition to the proposed law: “We don’t support the current CISA proposal,” the company said in an unattributed statement last week. “The trust of our customers means everything to us and we don’t believe security should come at the expense of their privacy.” Others – Wikimedia, Reddit, Salesforce, DropBox – issued similar statements.

Quietly, though, many major tech sector players are staying on the sidelines. After accusations that the company had been informally calling senators to say they wouldn’t oppose the bill, Facebook said it had not lobbied in Cisa’s favor, but that it did not have a public stance on it. Microsoft and Google, too, have been notable by their silence, though trade associations representing them have publicly objected to the bill.

Facebook has its own threat-sharing program; others within the industry do, too. The program created by Cisa wouldn’t be of much use to them – private industry is widely acknowledged to be further down this road than the government – but regulatory and Foia immunity could come in handy.

The bill must next pass the House of Representatives, a procedure that will likely be much quicker and smoother than the opposition it faced in the Senate from Oregon senator Ron Wyden, among others. Then it must be negotiated by the House and the Senate and then likely passed in a package with two others.

Atypically, security researchers have come out against Cisa, as well, saying it would do little to improve surveillance and would instead spread user information broadly across a threadbare patchwork of government IT systems. Mending that patchwork and others like it in private industry, said researcher Brian Krebs on his blog, Krebs on Security, is a much surer way to improve security.

“While many business leaders fail to appreciate the value and criticality of all their IT assets, I guarantee you today’s cybercrooks know all too well how much these assets are worth,” wrote Krebs. “And this yawning gap in awareness and understanding is evident by the sheer number of breaches announced each week.”

That gap is always going to be worse in the government than in the private sector, information sharing or not, said Jasper Graham, formerly a technical director the NSA.

Even if you mandate something proven to impede data thieves, like public-key infrastructure (PKI) encryption, you’ll hit a wall. “If you say, ‘Everyone now must use PKI!’ you get one small department saying, ‘Actually, we can’t do that,’ and that’s a nightmare.” Graham said. “Regular organizations aren’t really tied to what Donald Trump says tonight in the same way. The government has to do a better job than it’s currently doing, and the best way to do that is to get bipartisan funding.”

Robyn Greene of the New America Foundation characterized the legislation as a “do-something” bill. “The Sony hack really changed the conversation,” Greene said. “You can see that in the way the administration approached cybersecurity – they stopped saying ‘This is is something that has to get done right’ and started saying ‘This is something that has to get done now.’”

404 — Russian subs hover around cables carrying global bus worth more than $10T/day; > 95% of daily com

Undersea cables carry global business worth more than $10 trillion a day, more than 95 percent of daily communications. Any significant disruption would cut the flow of capital. This is a truly breathtaking scenario. We've known for a long time how vulnerable these undersea cables are to inclement weather and dragging anchors. And we've also known about the importance of where these cables come to ground, the nodes that are so attractive to the NSA and other intelligence agencies which make it their business to plant sniffers on these systems and suck up all the traffic they deem in violation of the Patriot Act. But the notion of submarines and scuba teams and drones that can deliver nuclear weapons . . . well, that's another thing altogether. And it's exactly the kind of thing that I cover in my most recent novel, 4o4 - A John Decker Thriller, about the surveillance state, recently listed as a Top Ten Amazon Bestseller in Technothrillers. For more on this story, check out this article from The New York Times.

 

Russian Ships Near Data Cables Are Too Close for U.S. Comfort

By DAVID E. SANGER and ERIC SCHMITT

WASHINGTON — Russian submarines and spy ships are aggressively operating near the vital undersea cables that carry almost all global Internet communications, raising concerns among some American military and intelligence officials that the Russians might be planning to attack those lines in times of tension or conflict.

The issue goes beyond old worries during the Cold War that the Russians would tap into the cables — a task American intelligence agencies also mastered decades ago. The alarm today is deeper: The ultimate Russian hack on the United States could involve severing the fiber-optic cables at some of their hardest-to-access locations to halt the instant communications on which the West’s governments, economies and citizens have grown dependent.

While there is no evidence yet of any cable cutting, the concern is part of a growing wariness among senior American and allied military and intelligence officials over the accelerated activity by Russian armed forces around the globe. At the same time, the internal debate in Washington illustrates how the United States is increasingly viewing every Russian move through a lens of deep distrust, reminiscent of relations during the Cold War.

Inside the Pentagon and the nation’s spy agencies, the assessments of Russia’s growing naval activities are highly classified and not publicly discussed in detail. American officials are secretive about what they are doing both to monitor the activity and to find ways to recover quickly if cables are cut. But more than a dozen officials confirmed in broad terms that it had become the source of significant attention in the Pentagon.

Adm. Mark Ferguson said the intensity of Russian submarine patrols had risen by almost 50 percent over the last year.

“I’m worried every day about what the Russians may be doing,” said Rear Adm. Frederick J. Roegge, commander of the Navy’s submarine fleet in the Pacific, who would not answer questions about possible Russian plans for cutting the undersea cables.

Cmdr. William Marks, a Navy spokesman in Washington, said: “It would be a concern to hear any country was tampering with communication cables; however, due to the classified nature of submarine operations, we do not discuss specifics.”

In private, however, commanders and intelligence officials are far more direct. They report that from the North Sea to Northeast Asia and even in waters closer to American shores, they are monitoring significantly increased Russian activity along the known routes of the cables, which carry the lifeblood of global electronic communications and commerce.

Just last month, the Russian spy ship Yantar, equipped with two self-propelled deep-sea submersible craft, cruised slowly off the East Coast of the United States on its way to Cuba — where one major cable lands near the American naval station at Guantánamo Bay. It was monitored constantly by American spy satellites, ships and planes. Navy officials said the Yantar and the submersible vehicles it can drop off its decks have the capability to cut cables miles down in the sea.

“The level of activity,” a senior European diplomat said, “is comparable to what we saw in the Cold War.”

One NATO ally, Norway, is so concerned that it has asked its neighbors for aid in tracking Russian submarines.

Adm. James Stavridis, formerly NATO’s top military commander and now dean of the Fletcher School of Law and Diplomacy, said in an email last week that “this is yet another example of a highly assertive and aggressive regime seemingly reaching backwards for the tools of the Cold War, albeit with a high degree of technical improvement.”

The operations are consistent with Russia’s expanding military operations into places like Crimea, eastern Ukraine and Syria, where President Vladimir V. Putin has sought to demonstrate a much longer reach for Russian ground, air and naval forces.

“The risk here is that any country could cause damage to the system and do it in a way that is completely covert, without having a warship with a cable-cutting equipment right in the area,” said Michael Sechrist, a former project manager for a Harvard-M.I.T. research project funded in part by the Defense Department.

“Cables get cut all the time — by anchors that are dragged, by natural disasters,” said Mr. Sechrist, who published a study in 2012 of the vulnerabilities of the undersea cable network. But most of those cuts take place within a few miles from shore, and can be repaired in a matter of days.

What worries Pentagon planners most is that the Russians appear to be looking for vulnerabilities at much greater depths, where the cables are hard to monitor and breaks are hard to find and repair.

Mr. Sechrist noted that the locations of the cables are hardly secret. “Undersea cables tend to follow the similar path since they were laid in the 1860s,” he said, because the operators of the cables want to put them in familiar environments under longstanding agreements.

The exceptions are special cables, with secret locations, that have been commissioned by the United States for military operations; they do not show up on widely available maps, and it is possible the Russians are hunting for those, officials said.

The role of the cables is more important than ever before. They carry global business worth more than $10 trillion a day, including from financial institutions that settle transactions on them every second. Any significant disruption would cut the flow of capital. The cables also carry more than 95 percent of daily communications.

So important are undersea cables that the Department of Homeland Security lists their landing areas — mostly around New York, Miami and Los Angeles — at the top of its list of “critical infrastructure.”

Attention to underwater cables is not new. In October 1971, the American submarine Halibut entered the Sea of Okhotsk north of Japan, found a telecommunications cable used by Soviet nuclear forces, and succeeded in tapping its secrets. The mission, code-named Ivy Bells, was so secret that a vast majority of the submarine’s sailors had no idea what they had accomplished. The success led to a concealed world of cable tapping.

And a decade ago, the United States Navy launched the submarine Jimmy Carter, which intelligence analysts say is able to tap undersea cables and eavesdrop on communications flowing through them.

Submarines are not the only vessels that are snooping on the undersea cables. American officials closely monitor the Yantar, which Russian officials insist is an oceanographic ship with no ties to espionage.

“The Yantar is equipped with a unique onboard scientific research complex which enables it to collect data on the ocean environment, both in motion and on hold. There are no similar complexes anywhere,” said Alexei Burilichev, the head of the deepwater research department at the Russian Defense Ministry, according tosputniknews.com in May 2015.

American concern over cable cutting is just one aspect of Russia’s modernizing Navy that has drawn new scrutiny.

Adm. Mark Ferguson, commander of American naval forces in Europe, speaking in Washington this month said that the proficiency and operational tempo of the Russian submarine force was increasing.

Citing public remarks by the Russian Navy chief, Adm. Viktor Chirkov, Admiral Ferguson said the intensity of Russian submarine patrols had risen by almost 50 percent over the last year. Russia has increased its operating tempo to levels not seen in over a decade. Russian Arctic bases and their $2.4 billion investment in the Black Sea Fleet expansion by 2020 demonstrate their commitment to develop their military infrastructure on the flanks, he said.

Russia is also building an undersea unmanned drone capable of carrying a small, tactical nuclear weapon to use against harbors or coastal areas, American military and intelligence analysts said.  

Admiral Ferguson said that as part of Russia’s emerging doctrine of so-called hybrid warfare, it is increasingly using a mix of conventional force, Special Operations mission and new weapons in the 21st-century battlefield.

“This involves the use of space, cyber, information warfare and hybrid warfare designed to cripple the decision-making cycle of the alliance,” Admiral Ferguson said, referring to NATO. “At sea, their focus is disrupting decision cycles.”

404 — Despite Xi Jinping's assurances, the Chinese are still hacking US corporations for trade secrets

Despite Xi Jinping's assurances, the Chinese are still hacking U.S. corporations for trade secrets, according to CrowdStrike. Chinese hackers have targeted at least seven U.S. companies since President Xi Jinping vowed last month in Washington that his country would not conduct economic cyberespionage. The Chinese also appear to be behind the cyber attacks profiled in my most recent novel, 4o4 - A John Decker Thriller, about the surveillance state, recently listed as a Top Ten Amazon Bestseller in Technothrillers. For more on this story, check out this article from The Washington Post.

Chinese President Xi Jinping and President Obama toast during a State Dinner on Sept. 25, 2015, in the East Room of the White House.

China still trying to hack U.S. firms despite Xi’s vow to refrain, analysts say

By Ellen Nakashima

Chinese government hackers have attempted in the past few weeks to penetrate the networks of U.S. companies to steal their secrets despite a pledge by China’s president that they would not do so, according to private researchers.

Chinese hackers have targeted at least seven U.S. companies since President Xi Jinping vowed last month in Washington that his country would not conduct economic cyberespionage — the theft of trade secrets and intellectual property for the benefit of the nation’s industries, according to CrowdStrike, a firm that helps companies track and prevent intrusions.

In the three weeks since Xi left Washington — including the day after he left, on Sept. 26 — hackers linked to the Chinese government have attempted to gain access to tech and pharmaceutical companies’ networks, said Dmitri Alperovitch, CrowdStrike co-founder and chief technology officer, who released a report on the issue Monday.

The efforts continue to the present, sometimes several times a day, and appear to be distinct from traditional intelligence gathering, which is not covered by Xi’s pledge, Alperovitch noted.

Both President Obama and President Xi Jinping referenced the evolving relationship between their two counties during a toast at the Chinese state dinner.

The U.S. intelligence community is also seeing continued signs of economic cyberespionage by Chinese hackers, according to a U.S. official, who spoke on the condition of anonymity because of the matter’s sensitivity. But what it means at this point is not clear.

One senior military cyber­defense official said recently that any cessation of Chinese economic espionage activity will play out over time. “I think it’s too early for any of us to see any of those changes,” said the U.S. Cyber Command’s deputy commander, Lt. Gen. James K. McLaughlin, speaking at the Center for Strategic and International Studies on Oct. 9.

Nonetheless, the fresh efforts by Chinese hackers, if they prove to be part of a renewed campaign of commercial espionage in cyberspace, will put pressure on the Obama administration to hold China accountable.

While in Washington for a state visit, Xi met with President Obama and promised that China would not “conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.”

Obama said Beijing must now follow through. “The question now is,” Obama said, “are words followed by actions?”

A senior administration official said the White House is aware of CrowdStrike’s report. “We’ll decline comment on its specific conclusions,” said the official, who spoke on the condition of anonymity because of the issue’s sensitivity. “As we move forward, we will monitor China’s cyber-activities closely and press China to abide by all of its commitments.”

The Washington Post reported in late August that the administration was preparing to impose — possibly even before Xi’s visit — economic sanctions on Chinese companies that benefited from government-sponsored hacking. But a promise by the Chinese government to refrain from such activity and its arrests of several hackers, among other gestures, helped persuade the administration to hold off on imposing sanctions.

But if the Chinese continue their behavior, the administration will act, officials said.

Standing next to Xi in the Rose Garden last month, Obama stressed that he had created a sanctions program earlier this year to be used when the administration has proof that the hackers have “gone after U.S. companies or U.S. persons.” He said he had told Xi “that we will apply [sanctions] and whatever other tools we have in our tool kit to go after cybercriminals, either retrospectively or prospectively.”

Many officials have been skeptical — some openly — that China would uphold its end of the agreement. One question: How much time should the administration give China to make changes in its behavior?

Some analysts noted that it could take time for China’s vast apparatus of cyberspies to be dismantled or refocused.

Another threat-detection company, FireEye, also has observed activity from likely Chinese government hacker groups since Sept. 25. “But it is premature to conclude that activity during this short timeframe constitutes economic espionage,” the firm’s intelligence director, Laura Galante, said in an e-mail. “Assessing the complexity of changes in state-sanctioned economic espionage requires far more sufficient time, data and viewpoints,” she said.

Alperovitch said he thinks enough time has passed. “The Chinese need to be held accountable for their continued attempts to steal IP and trade secrets through cyber-intrusions into commercial companies” he said. “The U.S government needs to make it clear that we will still use those sanctions unless these actions cease.”

CrowdStrike is not identifying the companies that were targeted, Alperovitch said. He said that CrowdStrike’s intrusion-detection platform prevented the hackers from gaining actual entry into their targets’ networks and no data was taken.

But, he said, the detection platform revealed tools and techniques, including servers in other countries, that are used by a variety of Chinese government hacking groups, including one that CrowdStrike has dubbed Deep Panda. For years, these groups have been targeting industries of strategic importance to China, including agriculture, chemical, financial, health care and insurance sectors.

404 — Attacks on U.S. infrastructure are increasing at an alarming rate; next stop Cyber Pearl Harbor?

Over the last four years, foreign hackers have stolen source code and blueprints to the oil and water pipelines and power grid of the United States and have infiltrated the Department of Energy’s networks 150 times. And it's only getting worse! This is exactly what happens in my latest novel, 4o4 - A John Decker Thriller, about the surveillance state, recently listed as a Top Ten Amazon Bestseller in Technothrillers. In my book, power plants and railway crossings are only the beginning of a wholesale attack on U.S. infrastructure, not to mention a battery of IoT-enabled homes. Check it out today! The article below comes to us from The New York Times.

Online Attacks on Infrastructure Are Increasing at a Worrying Pace

By NICOLE PERLROTH

SAN FRANCISCO — Over the last four years, foreign hackers have stolen source code and blueprints to the oil and water pipelines and power grid of the United States and have infiltrated the Department of Energy’s networks 150 times.

So what’s stopping them from shutting us down?

The phrase “cyber-Pearl Harbor” first appeared in the 1990s. For the last 20 years, policy makers have predicted catastrophic situations in which hackers blow up oil pipelines, contaminate the water supply, open the nation’s floodgates and send airplanes on collision courses by hacking air traffic control systems.

“They could, for example, derail passenger trains or, even more dangerous, derail trains loaded with lethal chemicals,” former Defense Secretary Leon E. Panetta warned in 2012. “They could contaminate the water supply in major cities, or shut down the power grid across large parts of the country.”

It is getting harder to write off such predictions as fearmongering. The number of attacks against industrial control systems more than doubled to 675,186 in January 2014 from 163,228 in January 2013, according to Dell Security — most of those in the United States, Britain and Finland.

And in many cases, outages at airports and financial exchanges — like a computer outage that took down computers at airports across the country late Wednesday, including Kennedy International Airport in New York and Logan Airport in Boston — are never tied to hacks.

But it’s clear hackers are trying.

The Department of Homeland Security last year announced that it was investigating an attack against 1,000 energy companies across Europe and North America. In 2012, 23 gas pipeline companies were hacked by online spies, according to a Homeland Security report. Private investigators later linked the attack to China.

Last year, in a disclosure overshadowed by the news of the attack on Sony, a German federal agency said that in an attack at an unnamed steel mill, hackers had managed to jump from the company’s corporate network to its production systems, causing significant damage to a blast furnace.

And in an extensive attack at Telvent, an information technology and industrial automation company now owned by Schneider Electric, Chinese hackers made off with its product source code and blueprints to facilities operated by its customers, which include 60 percent of the pipeline operators in North America.

For now, dire predictions of destructive online attacks on American targets ignore the fact that the actors with the ability to cause the gravest harm to America’s critical infrastructure — China and Russia and allies like Israel and Britain — are sufficiently deterred from doing so by fear of retaliation or because of longstanding trade and diplomatic relationships. And attacks by those aggressively trying to get such a capability — Iran, North Korea and Islamic militant groups — are still several years off.

“Despite all the talks of a cyber-Pearl Harbor, I am not really worried about a state competitor like China doing catastrophic damage to infrastructure,” said Michael V. Hayden, former head of the National Security Agency. “It’s the attack from renegade, lower-tier nation-states that have nothing to lose.”

Just how far off are they? That is the question troubling policy makers at the National Security Council and intelligence and law enforcement agencies. Federal officials have repeatedly warned that Islamic State militants have been exploiting social media for recruitment, and are developing tools to break into their enemies’ systems.

Those capabilities were sufficient to prompt the assassination of Junaid Hussain, the chief of the Islamic State’s cyberarmy, who was killed by an airstrike in Syria in August. But for now, federal officials say, the Islamic State does not have a significant ability to cause damage through online attacks.

“It’s not easy to pull off a spectacular attack,” said James A. Lewis, a security expert at the Center for Strategic and International Studies in Washington. “People are always saying in theory they can do something, but it’s not at the level of a Pearl Harbor or a 9/11.”

Mr. Lewis added: “Could someone acquire the ability to cause a blackout? That’s something to worry about, but the only people who could pull it off don’t have any interest in doing so.”

Most security experts point to the attacks last year at Sony — where hackers leaked internal documents and destroyed the company’s servers — as an example of the destruction that is possible now, and a harbinger of what may come.

There were warnings the year before the Sony hacking that such an incident was possible. In a carefully planned attack in 2013, North Korean hackers knocked out almost 50,000 computers and servers for several days at South Korean banks and media companies.

Less sophisticated attackers are more likely to continue to pursue social media campaigns and isolated attacks, rather than take down parts of the power grid, said Ralph Langner, an independent security expert who was the first to attribute Stuxnet, a virtual weapon used against Iranian nuclear centrifuges, to the United States and Israel.

But the attacks that have rattled American government officials the most were similar attacks at Saudi Aramco, the world’s largest oil company, and RasGas, the Qatari oil giant, in 2012.

At Aramco, the hackers replaced the data on employees’ hard drives with an image of a burning American flag. United States intelligence officials say Aramco’s attackers were hackers in Iran, although they offered no specific evidence to support the claim. Mr. Panetta, then secretary of defense, called the Aramco sabotage “a significant escalation of the cyberthreat.”

Forensics specialists who were called in to analyze the Aramco attack said there was evidence the attackers probed the network that connects the company’s pipelines but were never able to cross from Aramco’s corporate network to its production systems. The same was true for a similar attack at RasGas two weeks later. Hackers tried and failed to hit the Qatari petroleum company’s production systems, but successfully took its corporate networks and servers offline.

But the attack on the German steel mill, disclosed last year, suggests that hackers are increasingly finding ways to cross that threshold. Just last week, it was announced that a group of hackers penetrated the Snohomish County Public Utility District in Washington State. The hackers, members of the Washington State National Guard, had been invited to test the utility’s defenses, and the results were frightening. They were able to break in with an email in under 22 minutes.

Joe Weiss, a crusader for industrial control security and founder of Applied Control Solutions, a consulting firm, is not surprised. He manages a database of 750 incidents that affected control systems and said he was most disturbed that most of them were not classified as attacks at all.

“What that tells you is that not only do we not have the mitigation, we don’t even have any type of adequate forensics to know this is happening, and whether it was intentional or unintentional,” he said.

The Department of Homeland Security tweeted late Wednesday evening that the computer outages at airports were due to a “brief outage that lasted 90 minutes” on the United States Customs and Border Protection’s computer processing systems.

But Mr. Weiss said in most cases, forensics investigations were still not adequate enough to nail down the real source of such incidents. He said the same was true across the electric, water, oil, gas, and nuclear industries.

“It’s not like with weapons, where you know where it’s coming from,” Mr. Weiss said. “With cyber- and control systems, you don’t necessarily know.”

“Will there be a cyber-Pearl Harbor? Most likely,” Mr. Weiss added. “Will we know it’s cyber? Most likely not.”

dEATH in dAVOS — Clinton was the worst President for black families in the history of the U.S.

I urge anyone with the time to read the long-form piece by Ta-Nehisi Coates in this month's Atlantic Monthly called The Black Family in the Age of Mass Incarceration. Few people realize that H.R. 3355 (Violent Crime Control and Law Enforcement Act of 1994 ), a bill designed to amend the Omnibus Crime Control and Safe Streets Act of 1968, was the single most damaging cause of the mass incarceration of black men in American history. It was authored by Senator Joe Biden (yeah, that Senator Biden), and signed into law by none other than Bill Clinton, who now says he regrets signing it. Yeah, like HR Clinton regrets voting for the Iraq War. Hmmmmm. Had Bernie been around at that time, do you think he would have supported this? Doubt it. But will the black voter come out for HRC or will they feel the Berne? The Clintons have done a masterful job of persuading the black voter that they are on their side . . . and yet it was this legislation signed into law by Bill Clinton that is the reason so many black families today have a hole in them. Indeed, if you add the fact that Bill Clinton got rid of Glass-Steagall — whose recall is in no small way responsible for the great recession as its dismissal let banks speculate with esoteric financial instruments like real estate mortgage investment conduits (REMICs) and other mortgage-backed securities (MBSs) — rather than being the "first black President", as he's so often described, I would argue that Clinton did more to damage black families over the last 20 years than any President in the history of the United States. If you're a high school drop-out and you happen to be black, you have a 60% chance of going to jail at some point in your young life. If you're a black man, chances are that fully 1/3 of you will be incarcerated. While the U.S. population represents around 5% of the world population, we can boast around 25% of those who are incarcerated. Now, add the profit motive assigned to prisons through privatization and you can understand the following chart. These are exactly the issues that I write about in the book I've recently finished, dEATH in dAVOS.

 

As the piece in The Atlantic is so long, I have decided to post a clip from Trevor Noah's recent interview with Coates on the Daily Show. But, please, take a moment to read the full piece. It's breathtakingly provocative and well worth the read.

Get More: Comedy Central,Funny Videos,Funny TV Shows

dEATH in dAVOS — Credit Suisse says top 1% of wealth holders now own half of all household wealth

The writing was on the wall and it's finally happened: according to Credit Suisse, the top 1% of wealth holders now own half of ALL household wealth worldwide, including 120,000 individuals who own at least $50M of wealth each. This is the subject of the manuscript I've just finished, dEATH in dAVOS, about a teen serial killer named Robin Beauvais who gets herself invited to the World Economic Forum in Davos, Switzerland, ostensibly because of an app she's developed, but in reality so that she can take out nefarious billionaires who have committed egregious acts such as murder, blackmail and child molestation, but whose great wealth insulates them from prosecution and punishment . . . but not from the avenging Robin Beauvais. Check out this story in The Guardian.

 Luxury cars on display in Knightsbridge, central London. The top 1% of wealth holders now own half of all household wealth.

Global rich are getting richer

The top 1% of wealth holders now own half of all household wealth. And that includes 120,000 “ultra-high net worth individuals” across the globe who own at least $50m of wealth each.

That’s according to Credit Suisse’s latest wealth report, which is packed with details about the distribution of wealth across the globe.

This year’s report shows that China’s stock market boom has helped to create more ultra-rich people there. Chinese multimillionaires and billionaires make up 8% of all UHNWI’s.

The group of millionaires below the $50m mark make up another 0.7% of global population, but owns 45.2% of global wealth.

But while the ultra rich have got even richer, others aren’t keeping pace.

Credit Suisse’s chief executive Tidjane Thiam says:

Notably, we find that middle-class wealth has grown at a slower pace than wealth at the top end. This has reversed the pre-crisis trend, which saw the share of middle-class wealth remaining fairly stable over time.

Here are some charts from the report, which is online here.

The top slice of this pyramid group is made up of 34 million US dollar millionaires, who comprise less than 1% of the world’s adult population, yet own 45% of all household wealth. Credit Suisse estimates that 123,800 individuals within this group are worth more than $50m, and 44,900 have over $100m.

404 — Obama admin backs down from demanding backdoor to encrypted smartphone user data

The Obama administration has backed down in its bitter dispute with Silicon Valley over the encryption of data on iPhones and other digital devices, concluding that it is not possible to give American law enforcement and intelligence agencies access to that information without also creating an opening that China, Russia, cybercriminals and terrorists could exploit. Duh. What took you, Mr. President? This kind of backdoor is exactly what the enemy exploits in my latest novel, 4o4 - A John Decker Thriller, about the surveillance state, recently listed as a Top Ten Amazon Bestseller in Technothrillers. For more on this story, check out this article from The New York Times.

President Obama hosted a state dinner at the White House for President Xi Jinping of China in September. Timothy D. Cook, the chief executive of Apple, sat at the head table with Mr. Obama and Mr. Xi.

Obama Won’t Seek Access to Encrypted User Data

By NICOLE PERLROTH and DAVID E. SANGER 

CUPERTINO, Calif. — The Obama administration has backed down in its bitter dispute with Silicon Valley over the encryption of data on iPhones and other digital devices, concluding that it is not possible to give American law enforcement and intelligence agencies access to that information without also creating an opening that China, Russia, cybercriminals and terrorists could exploit.

With its decision, which angered the F.B.I. and other law enforcement agencies, the administration essentially agreed with Apple, Google, Microsoft and a group of the nation’s top cryptographers and computer scientists that millions of Americans would be vulnerable to hacking if technology firms and smartphone manufacturerswere required to provide the government with “back doors,” or access to their source code and encryption keys.

That would enable the government to see messages, photographs and other data now routinely encrypted on smartphones. Current technology puts the keys for access to the information in the hands of the individual user, not the companies.

The first indication of the retreat came on Thursday, when the F.B.I. director, James B. Comey, told the Senate Homeland Security and Governmental Affairs Committee that the administration would not seek legislation to compel the companies to create such a portal.

 

Timothy D. Cook of Apple opposes a “back door” to data.

But the decision, made at the White House a week ago, goes considerably beyond that.

While the administration said it would continue to try to persuade companies like Apple and Google to assist in criminal and national security investigations, it determined that the government should not force them to breach the security of their products. In essence, investigators will have to hope they find other ways to get what they need, from data stored in the cloud in unencrypted form or transmitted over phone lines, which are covered by a law that affects telecommunications providers but not the technology giants.

Mr. Comey had expressed alarm a year ago after Apple introduced an operating system that encrypted virtually everything contained in an iPhone. What frustrated him was that Apple had designed the system to ensure that the company never held on to the keys, putting them entirely in the hands of users through the codes or fingerprints they use to get into their phones. As a result, if Apple is handed a court order for data — until recently, it received hundreds every year — it could not open the coded information.

Mr. Comey compared that system to the creation of a door no law officers could enter, or a car trunk they could not unlock. His concern about what the F.B.I. calls the “going dark” problem received support from the director of the National Security Agency and other intelligence officials.

But after a year of study and extensive White House debate, President Obama and his advisers have reached a broad conclusion that an effort to compel the companies to give the government access would fail, both politically and technologically.

“This looks promising, but there’s still going to be tremendous pressure from law enforcement,” said Peter G. Neumann, one of the nation’s leading computer scientists and a co-author of a paper that examined the government’s proposal for special access. “The N.S.A. is capable of dealing with the cryptography for now, but law enforcement is going to have real difficulty with this. This is never a done deal.”

In the paper, released in July, Mr. Neumann and other top cryptographers and computer scientists argued that there was no way for the government to have a back door into encrypted communications without creating an opening that would be exploited by Chinese and Russian intelligence agents, cybercriminals and terrorist groups.

Inside the White House, the Office of Science and Technology Policy came largely to the same conclusion. Those determinations surprised the F.B.I. and local law enforcement officials, who had believed just months ago that the White House would ultimately embrace their efforts.

The intelligence agencies were less vocal, which may reflect their greater capability to search for and gather information. The National Security Agency spends vast sums to get around digital encryption, and it has tools and resources that local law enforcement officials still do not have and most likely never will.

Disclosures by the former N.S.A. contractor Edward J. Snowden showed the extent of the agency’s focus on cracking and circumventing the encryption of digital communications, including those of Apple, Facebook, Google and Yahoo users.

There were other motivations for the administration’s decision. Mr. Obama and his aides had come to fear that the United States could set a precedent that China and other nations would emulate, requiring Apple, Google and the rest of America’s technology giants to provide them with the same access, officials said.

Timothy D. Cook, the chief executive of Apple, sat at the head table with Mr. Obama and Xi Jinping, the Chinese president, at a state dinner at the White House last month. According to government officials and industry executives, Mr. Cook told Mr. Obama that the Chinese were waiting for an opportunity to seize on administration action to insist that Apple devices, which are also encrypted in China, be open to Beijing’s agents.

In January, three months after Mr. Comey began pressing companies for special government access, Chinese officials had threatened to do just that: They considered submitting foreign companies to invasive audits and requiring them to build back doors into their hardware and software. Those rules have not been put into effect.

The Obama administration’s position was also undercut by officials’ inability to keep their own data safe from Chinese hackers, as shown by the extensive cyberattack at the Office of Personnel Management discovered this year. That breach, and its aftermath, called into question whether the government could keep the keys to the world’s communications safe from its adversaries in cyberspace.

White House officials said they would continue trying to persuade technology companies to help them in investigations, but they did not specify how.

“As the president has said, the United States will work to ensure that malicious actors can be held to account, without weakening our commitment to strong encryption,” said Mark Stroh, a spokesman for the National Security Council. “As part of those efforts, we are actively engaged with private companies to ensure they understand the public safety and national security risks that result from malicious actors’ use of their encrypted products and services. However, the administration is not seeking legislation at this time.”

But here in Silicon Valley, executives did not think the government’s announcement went far enough.

According to administration officials and technology executives, Mr. Cook of Apple has pressed the White House for a clear statement that it will never seek a back door in any form, legislative or technical — a statement he hoped to take to Beijing, Moscow and even London. Prime Minister David Cameron of Britain has threatened to ban encrypted devices and services, like the iPhone and Facebook’s popular WhatsApp messaging service, but has done nothing so far to make good on that threat.

Technology executives are determined to reassure customers abroad that American intelligence agencies are not reading their digital communications. It is an effort driven by economics: 64 percent of Apple’s revenue originates overseas.

Apple, Google, Facebook and Microsoft argue that people put not only their conversations but their entire digital lives — medical records, tax returns, bank accounts — into a device that slips into their pocket. While Mr. Obama has repeatedly said he is sympathetic to the concerns of law enforcement officials, he made clear during a visit to Silicon Valley in February that he was also aware of privacy concerns and that he sought to balance both interests.

Technologists responded that, with regard to encryption, no such balance existed. “The real problem is, I don’t see any middle ground for dumbing down everything to make special access possible and having the secure systems we need for commerce, government and everything else,” Mr. Neumann said.

404 — World's largest online pay system, Samsung Pay, breached by Chinese hackers

As early as March, hackers alternatively known as the Codoso Group or Sunshock Group by those who track them breached the computer network of LoopPay, a start-up in Burlington, Mass., that was acquired by Samsung in February for more than $250 million, targeting LoopPay's magnetic secure transmission, or MST, technology. MST is the centerpiece of Samsung Pay. These kinds of breaches are exactly what I showcase in my latest novel, 4o4 - A John Decker Thriller, about the surveillance state, recently listed as a Top Ten Amazon Bestseller in Technothrillers. For more on this story, check out this article from The New York Times.

Samsung Pay was presented during a promotional event in New York in August.

Chinese Hackers Breached LoopPay, Whose Tech Is Central to Samsung Pay

By NICOLE PERLROTH and MIKE ISAAC

WASHINGTON — Months before its technology became the centerpiece of Samsung’s new mobile payment system, LoopPay, a small Massachusetts subsidiary of the South Korean electronics giant, was the target of a sophisticated attack by a group of government-affiliated Chinese hackers.

As early as March, the hackers — alternatively known as the Codoso Group or Sunshock Group by those who track them — had breached the computer network of LoopPay, a start-up in Burlington, Mass., that was acquired by Samsung in February for more than $250 million, according to several people briefed on the still-unfolding investigation, as well as Samsung and LoopPay executives.

LoopPay executives said the Codoso hackers appeared to have been after the company’s technology, known as magnetic secure transmission, or MST, which is a key part of the Samsung Pay mobile payment wallet that made its public debut in the United States last week.

Like similar mobile payment systems from Apple and Google, Samsung Pay allows consumers to pay for goods using their Samsung smartphones with so-called near-field communications technology, which uses a wireless signal to send payment information from a phone to newer cash registers. But LoopPay’s MST technology has an advantage: It also works with older payment systems by emulating a commonly used magnetic stripe card.

The attackers are believed to have broken into LoopPay’s corporate network, but not the production system that helps manage payments, said Will Graylin, LoopPay’s chief executive and co-general manager of Samsung Pay. Mr. Graylin said that security experts were still looking through LoopPay’s systems, but that there had been no indication that the hackers infiltrated Samsung’s systems or that consumer data had been exposed.

LoopPay did not learn of the breach until late August, when an organization came across LoopPay’s data while tracking the Codoso Group in a separate investigation.

Both LoopPay and Samsung executives said they were confident that they had removed infected machines, and that customer payment information and personal devices were not affected. They added that there was no need to delay the introduction of Samsung Pay, which had its debut in the United States last week after executing more than $30 million worth of purchases in South Korea.

“Samsung Pay was not impacted and at no point was any personal payment information at risk,” Darlene Cedres, Samsung’s chief privacy officer, said in a statement. “This was an isolated incident that targeted the LoopPay corporate network, which is a physically separate network. The LoopPay corporate network issue was resolved immediately and had nothing to do with Samsung Pay.”

But two people briefed on the investigation, as well as security experts who have been tracking the Codoso hackers as they have targeted hundreds of victims around the world, said it would be premature to say what the hackers did and did not accomplish since they were discovered in August.

To start, the hackers were inside LoopPay’s network for five months before they were discovered. And the Codoso Group is known for maintaining a hidden foothold in its victims’ systems. Security experts say the group’s modus operandi is to plant hidden back doors across victims’ systems so that they continue to infiltrate their networks long after the initial breach.

In a multistage Codoso attack of Forbes in February, for example, the group infected the website of Forbes.com with malicious code that infected the site’s visitors. But that was just the start. From there, other members of the group used that foothold in visitors’ machines to search for valuable targets in the defense sector.

After a similar attack by another Chinese state-affiliated hacking group on the U.S. Chamber of Commerce in 2011, the chamber believed it had rid hackers from its network only to discover months later that an office printer and even a thermometer in one of its corporate apartments were still sending information back to computers in China.

Samsung introduced Samsung Pay in the United States just 38 days after LoopPay learned it had been breached. On average, it takes 46 days before an attack by hackers can be fully resolved, according to the Ponemon Institute, a nonprofit that tracks breaches. But the time to fix the damage is typically much longer in cases of sophisticated Chinese hackings like the one at LoopPay.

“Once Codoso compromises their targets — which range from dissidents to C-level executives in the U.S. — they tend to stay there for quite a long time, building out their access points so they can easily get back in,” said John Hultquist, the head of intelligence on cyberespionage at iSight Partners, a security firm. “They’ll come back to a previous organization of interest again and again.”

LoopPay hired two private forensics teams to investigate the breach on Aug. 21, just a month before it was set to bring Samsung Pay to the United States, according to Mr. Graylin. Both are still working the case.

But the investigation has been unusual from the start. LoopPay told the teams to look at different portions of its network. One of the firms, Sotoria, which is based in Charleston, S.C., was given a backup of LoopPay’s data and asked to leave the company’s headquarters after just three days.

Mr. Graylin said that was because the team was looking at LoopPay systems that he said fell outside the scope of the initial contract, in what Mr. Graylin described as an attempt to extract more fees. Even so, he said, LoopPay was still working with the company to resolve the breach.

Sotoria executives said they could not comment on the investigation. Mr. Graylin would not name the second computer forensics firm looking into the attack.

LoopPay has not notified law enforcement about the breach, Mr. Graylin said, because his firm believed no customer data or financial information had been stolen.

He also played down concerns that hackers might try to use the information they stole about his company’s technology in order to infiltrate Samsung Pay or create a copycat product. He said if such a thing emerged, LoopPay could file a patent lawsuit. What’s more, he said, it would be viable only if major banks, credit card companies and carriers were willing to team up with the copycat.

News of the breach at LoopPay comes at a particularly inopportune time for Samsung, which is locked in a bitter war for smartphone supremacy against Apple and its immensely popular iPhone, as well as a newer crop of less expensive devices from manufacturers like China’s Xiaomi.