Author Archives: Jared Wade

About Jared Wade

Jared Wade is a freelance writer and former editor of the Risk Management Monitor and senior editor of Risk Management magazine. You can find more of his writing at JaredWade.com.

Risk Management Links of the Day … Featuring Android Phishing

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  • A “phisher” looking to gain access to people’s banking details managed to upload a malicious app to the app store for Google’s Android smart phone (which is Google’s answer to the iPhone). And while it was quickly removed once discovered, this brings into question whether or not Google needs to be more stringent on the apps it allows into the Android Marketplace. “The rogue Android application posed as a legitimate banking applet, but was actually designed to trick marks into handing over bank login details to fraudsters, an alert by credit union First Tech warns. The credit union, which said it wasn’t targeted by the attack, doesn’t even have an app for Android as yet.” And the macro-level threat here is, of course, the vulnerability of smart phones, which are increasingly becoming indispensable web portals for millions. Many expect similar attacks to rise in 2010.
  • In a candid Wall Street Journal interview this weekend, Hank Greenberg questioned the terms of the AIG bailout and instructed journalists to start looking deeper into Goldman Sachs’ actions before the financial collapse. “There’s too much smoke, too many smart people asking questions that deserve an answer. I would hope that investigative reporters do the job they love to do and bring out the truth. I would hope that Congress would then say we must do something about this in all fairness.

    The American people should know about this and then bring about the changes necessary to avoid the total destruction of a great company that was the pride of America in the insurance industry.

    ” Hank would seemingly be the first in line among AIG shareholders to file a class-action lawsuit to recoup all the losses that have (in his view, unfairly) occurred since the Fall of 2008, but — for now at least — he isn’t going that far. He has, however, presented the Fed with a plan in which AIG’s “$112 billion loan [would be] stretched out to, say, 20 years and the interest rate slashed to something closer to the government’s own cost of borrowing.” Good luck with that.

  • The Basel Committe on Banking Supervision has identified several areas that it must address in more depth, including coming up with more concrete principles to help replace International Accounting Standard (IAS) 39. And that might prove contentious. “This could put regulators on a collision course with the International Accounting Standards Board (IASB), which published proposals for consultation on November 5 to replace the incurred loss model with an expected loss model as part of the overhaul of IAS 39.” You know what that means? ACCOUNTING FIGHT.
  • A man who was pretending to be a rock concert promoter was indicted for running a Ponzi scheme. “According to the indictment, [Miko Dion] Wady operated and had an ownership interest in various business enterprises that purportedly were engaged in the business of promoting concerts or tours of well known entertainers and artists.”The indictment alleges that Wady and others misled victim investors into believing that Wady entered into performance contracts and other business arrangements with nationally and internationally known entertainers, arranged performance venues throughout the world, and greatly profited by putting on these concert or tour events. The indictment alleges that from 2004 through 2007, Wady claimed to have promoted concerts for The Rolling Stones, U2, Barbara Streisand, Faith Hill, Tim McGraw, Mariah Carey, George Strait, Billy Joel, Jamie Foxx, Jimmy Buffet, Mary J. Blige, Pearl Jam, and at least 30 other well known artists and entertainers.

    Also according to the indictment, during this period, Wady appears to have actually promoted fewer than 10 concerts, all involving only local or lesser known artists.”

Find an interesting link? Email me any stories, videos or images you come across. Or just follow me on Twitter @RiskMgmt to pass along the news.

Risk Management Links of the Day … Featuring Security Dogs on Vacation

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security dog philadelphia airport

  • Three bomb-sniffing dogs at the Philly International airport failed their recertification tests and have been relieved of duty. While laying off security dogs may sound like overkill, even in the new climate of airline security sensitivity, one expert notes that “these dogs are not ornamental. They are there for a purpose. If the purpose is not being satisfied, that’s a serious issue.” There is a “built-in redundancy” at the airport so other screening methods can be used in the meantime until new dogs can be brought in. As for the dogs who failed … Do they just get to go on vacation and relax playing billiards like the pup above? Nope. It’s back to school for them: “TSA spokesman Greg Soule said the agency could not comment on the status of its dogs. He said, however, that the rigorous nature of yearly certification tests means that some of the nation’s 700 TSA-led dog teams deployed in air, marine and mass transportation systems may not pass and must go through a remedial program.”
  • A scary-to-think-about report was released today from the Sector Risk Research Programme stating that risks that are poorly understood and thus not addressed properly by the commercial insurance sector could “prompt a new phase of the financial crisis.” More specifically, the report states: “Parallels can be drawn between large property and casualty insurance institutions today lacking the ability to fully understand changing risk exposures and more publicised past failures of financial institutions to understand risks assumed. While loss impacts naturally lag economic changes by several years, turmoil in commercial insurance is expected as a latter phase of the financial crisis.” Jeez. Let’s hope not. (via Risk & Insurance)
  • The 4th quarter of 2009 set a record for cat bond issuance volume. “More companies have put their toes back in the water after a slow start in 2009,” said Robert Stone, director with the RMS dedicated ILS team, RiskMarkets.
  • This is a little dated at this point, but I read it over my holiday break and was just reminded how much I enjoyed Vanity Fair‘s extensive look at Goldman Sachs. The article breaks down the disconnect between “the way Goldman Sachs sees itself (they’re the smartest) and the way everyone else sees Goldman (they’re the smartest, greediest, and most dangerous).” It seems like the further we get away from September 15, 2008, the more interesting the stories become about what actually happened between Wall Street and Washington during the market meltdown, and Bethany Mclean of Vanity Fair peels back a few more revealing layers of the onion here. They also devised this sweet chart illustrating that “Goldman’s influence is ubiquitous in the highest echelons of global political power.” That sure is a ton of former Goldman employees in a ton of the world’s most influential financial positions.
  • Speaking of political power over the financial system … David Leonhardt is asking “If the Fed Missed This Bubble, Will It See a New One?” in the New York Times. “The fact that Mr. Bernanke and other regulators still have not explained why they failed to recognize the last bubble is the weakest link in the Fed’s push for more power. It raises the question: Why should Congress, or anyone else, have faith that future Fed officials will recognize the next bubble?” Fair question, it would seem.

Find an interesting link? Email me any stories, videos or images you come across. Or just follow me on Twitter @RiskMgmt to pass along the news.

Risk Management Links of the Day: 01.05.10

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geoengineering

  • Geoengineering in regards to the environment and climate change has increasingly been gaining mainstream interest over the past year after spending most of its days mired in obscurity or outright condemnation. I’ve personally written about it twice in the past few months both in regards to Bill Gates’ discussion on thwarting hurricanes and SuperFreakonomics‘ assertion that widespread geoengineering to slow climate change is a good solution. Still, the concept remains widely misunderstood and obviously has both positive and worrisome components. To help everyone become better informed about the concept, the MIT Technology Review has taken an exhaustive look at the possibilities of society geoengineering our way out of climate change.
  • Rick Nason teaches an ERM class and while skeptical of the practicality of teaching this within an MBA curriculum, he has a question for you: “ERM has created a lot of excitement, but very few successful examples. Explain why you believe ERM has so few successful implementations.” Head over there to answer. And show your work. (via RiskCzar)
  • Les Krantz breaks down the 200 best and worst jobs in the U.S. in his “Jobs Rated Almanac.” And you know what’s number one? Actuary. “Actuaries, who evaluate the financial impact of risk on an organization, fared best because they work during standard business hours and in favorable conditions — indoors and in places free of toxic fumes or loud noise — as opposed to those jobs toward the bottom of the list such as iron worker, dairy farmer and the biggest loser from last year’s study, lumberjack.” Google “Norm MacDonald,” “Weekend Update” and “worst job” to find out what ranked dead last this year — again.

Find an interesting link? Email me any stories, videos or images you come across. Or just follow me on Twitter @RiskMgmt to pass along the news.

Risk Management Links of the Day: 12.18.09

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carbon emissions copenhagen

  • Despite President Obama’s plea to the Copenhagen climate summit (“While the science of climate change is not in doubt, I think our ability to take collective action is in doubt right now, and it hangs in the balance”), it is looking more and more like the philosophical differences and logistical squabbles between the developed and developing worlds are too large of an impasse for a new global carbon emission-cutting accord to come out of Denmark.
  • AM Best has affirmed “A” ratings for the AIG subsidiaries (Chartis, Lexington, AIU and Yosemite), which were downgraded from “A+” in September 2008 as the world economy burned down. “Best Analyst Jennifer Marshall said the rating reflected the fact that the companies had enough capital available to support their risk exposures, showed better underwriting and operating performance, and retained the bulk of their policies and customers around the world. ‘It is still an excellent rating, and we believe that, based on our analysis of the capitalization, the rating is appropriate,’ said Marshall.”
  • Since LED lights use some 90% less electricity than the traditional incandescent variety, many cities and towns throughout the country have installed LED traffic lights in recent years to save money and become more environmentally conscious. Great idea, right? Maybe not so much once winter hits. It turns out that the extra energy radiated by the traditional lights was what melted snow landing on the lights and blocking the signal. So many of the lights using the LED alternative now become unreadable during major storms. Related accidents have been reported in Indiana, Iowa and Minnesota, and a cop responding to a traffic accident in Oswego, Illinois, had this to say: “Would the accident have occurred if the lights had been clear? I would be willing to bet not.” There is currently no good solution to this clear and deadly (from at least one report) public safety concern, but different cities are trying different things until they get the opportunity to implement a better technological fix, which could include heated lights, water-repellent coating or weather shields. St. Paul, Minnesota, has its workers using compressed air to blow the snow off while Green Bay, Wisconsin, is sending crews out to brush the snow off by hand. I don’t know if this extra effort will completely offset the electricity savings (which the state of Wisconsin reports as $750,000), but it sure does sound like a tedious process. And cold.
  • The Dubai Ports controversy a few years back brought the debate about national security vs. foreign investment to the forefront. Now, with the Obama administration recently threatening to block a Chinese bid to buy a Nevada gold mining company, it seems the debate continues. While the Times piece is good, check out the Risk Management take on the issue from late 2008 if you’re looking for a more in-depth look at the risk-related angle here.
  • Netflix is facing a potentially huge breach-of-privacy law suit that could be financially devastating for the company. But for the rest of us? It may actually help clarify some of the still-murky legal issues surrounding these new, user-centric, online social networks.
  • This is a few days old, but I’m just reading this Justin Fox’s “The Real Jobless Rate” column from this week’s Time (which also has a pretty good “Year in Pictures” feature, by the way). Fox suggests that while November’s reported 10% unemployment rate is a useful barometer of the current recession, there are many other, more nuanced jobless measures out there to better illustrate the true gravity of the current recession. What measures should we be looking at? “How about the simplest possible job-market measure, the employment-to-population ratio? Among Americans ages 25 to 54, it was at 75.1% in November, down from 80.3% in early 2007 and — with the exception of October’s 75% — the lowest it’s been since 1984. Because of the entry of women into the workforce, the ratio trended upward from the 1960s through the 1990s. If you look just at men ages 25 to 54, the picture is much more dire. Their employment-to-population ratio of 80.6% in November is the lowest since the BLS began keeping track in 1948. It’s 4 percentage points lower than it was in the depths of the early-1980s downturn.” In the comments below Fox’s article, someone linked to Paul Krugman’s take on the matter, which I found it interesting as well.
  • This is similarly a few days old but probably even more interesting: Paul Volcker speaks to the Wall Street Journal on moral hazard, a fundamental restructuring the banking sector and the financial “innovation” of the past few decades so-often touted as a key driver of the U.S. economy. “The most important financial innovation that I have seen the past 20 years is the automatic teller machine. That really helps people and prevents visits to the bank and is a real convenience. How many other innovations can you tell me that have been as important to the individual as the automatic teller machine, which is in fact more of a mechanical innovation than a financial one?”
  • The social media site Twitter was knocked offline last night by what may have possibly been an Iranian group of hackers calling themselves “IRANIAN CYBER ARMY” hijacking the site for political motivations. The digital assailants left a written message accompanied by a green flag on Twitter.com when the site went down that included the warning that “U.S.A. Think They Controlling And Managing Internet By Their Access, But THey Don’t, We Control And Manage Internet By Our Power” as well as the oddly polite salutation “Take Care.” Some are skeptical that this is really an Iranian political group rather than merely a prank, but as we saw this Summer, Twitter has had a major role in the ongoing in-fighting taking place in Iran. “Twitter has been an important tool for the opposition movement in Iran this year. Following the disputed presidential election there in June, as the country’s government sought to contain mass protests on the streets and online, threatening messages started to appear on the site from at least one user who claimed to be part of a cyber-unit of the country’s Revolutionary Guards Corps, established to fight enemies of the government.”

Find an interesting link? Email me any stories, videos or images you come across and would like to see included. Or just follow me on Twitter @RiskMgmt and pass it along that way.