Tag Archives: Middle East

If You Can’t Kill the Internet by DDoS, Try An Axe

It’s said to be more than 500 ways to kill a cat. How many ways there is to kill the Internet is yet to be determined, but some people seems very keen to find out:  Reuters reports, Thursday, that the Egyptian coastguard have intercepted a fishing boat off the coast of Alexandria and arrested three men in the act of trying to cut through the SEA-ME-WE 4 undersea cable. The cable is one of the main Internet connections between Asia and Europe, transporting 1,28 terabytes of data.

“Multiple sub sea cable cuts have been confirmed off the northern coast of Egypt in the Mediterranean Sea, which are impacting a number of cable systems in AfricaMiddle East and Asia connecting to Europe,”



The Internet does not live in anything resembling a cloud (yet). Instead it resides in hundreds of cables snaking underground and along the bottom of the sea, where it is susceptible to ship anchors, marine life, and sabotage. That’s exactly the kind of attack that seems to be underway. The past week we have seen reports of several severed cables off the coast of Egypt.

According to Reuters, the Egyptian coastguard intercepted a fishing boat off the coast of Alexandria and arrested three men trying to cut through the SEA-ME-WE 4 undersea cable, yesterday. The cable is one of the main connections between Asia and Europe, running from France to Malaysia and linking Italy, north Africa, the middle east and south Asia.

The men are at the moment being interrogated by Egyptian authorities. Their identities are still unknown.

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The Egyptian navy have  uploaded their pictures on Facebook, so if you recognize any of them, please notify the authorities via this link.

Over the past week there has been several reports of severed cables off near the coast of Egypt that are part of Seacom, a network of cables serving much of Africa.

Seacom officials have up to now suspected careless ships. But the arrest of the three men yesterday suggests there could a concerted effort to take down Egypt’s connectivity.


A similar spate of cuts affected the region in 2008, though no culprit was officially established.

Most big countries have several redundant cables landing on their shores. But the loss of even a single one means that all the traffic must be jammed through remaining connections, causing congestion. And there is nothing to stop determined attackers from targeting several cables.

webaxeMany cables go through geographic chokepoints like the Suez, and it wouldn’t be difficult to disrupt a whole bunch of connections for a period of time.

Yesterday’s attacks on the Internet’s infrastructure – the Cyberbunker attack and the Egyptian cable cutters – show two ways of waging asymmetric war in the Internet era.

If your aim is a single company, it helps to know how to wrangle thousands of zombie computers into a precise, targeted attack. That also has the benefit of allowing regular users—and the attackers themselves—to stay online.

But if your target is bigger, say a country or a continent, all it takes to cripple the network is scuba gear and a few sharp-edged tools, qz.com writes.

In other words: If you see someone lurking around with a snorkel and an axe – call the police !


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Filed under Laws and Regulations, Technology

Is The Global Economy Really Shock-Proof?

How many bailouts will people accept? Before someone is forced to default? The answer, my friend, is blowing in the wind. But the Economist’s Intelligence Unit is on the case.

“The global economy has endured an extraordinary array of shocks so far this year, from turbulence in the Middle East and North Africa to the Japanese tsunami. And yet growth prospects are reasonably good.”

Robin Bew

This blogger is far from sure about the global economy being shock-proof. But the Economist Intelligence Unit seems to think it is – almost. Anyway, it’s an interesting question.

“The global economy has endured an extraordinary array of shocks so far this year, from turbulence in the Middle East and North Africa to the Japanese tsunami. And yet growth prospects are reasonably good,” chief economist Robin Bew says in a presentations of EIU’s latest research.

In this webcast, he explain why they belive positives such as the continued US recovery are likely to offset at least in part some of the negatives. The webcast also gives EIU’s latest views on inflation, Japan‘s disaster response and the dollar.

The risk analysts looks at Russia‘s efforts to foster innovation. The country has many of the attributes needed for high-tech success, as well as problems – such as massive inefficiencies in the energy sector – for which innovation could provide solutions.

“But will the state’s paternalistic instincts get in the way?” EIU ask.

The industry experts examines the US retail market where, despite a fragile recovery in sales, vacancy rates in shopping malls have reached record highs.

“As US discount chains snap up good deals on the best locations, European retailers may be missing a rare opportunity.”


Filed under International Econnomic Politics, National Economic Politics

Spinning a Wildfire

At least EU’s commissioner for energy got a bit of a boost Wednesday after saying that he feared a catastrophic event in Japen within hours. The financial markets went – of course – straight into free fall, and Mr. Günther Oettinger and his spin doctors probably made an unofficial speed record in official dèmentis with a contradiction statement within minutes after the first one. But spinning a wildfire is not an easy task.

“The lack of signs of improvement or even stabilisation sent stocks down sharply again and spreads were wider on the day during the afternoon.”

Gavan Nolan

It was perhaps inevitable that there would be a short covering rally at some point this week. Credit markets in Japan had widened dramatically for three days in succession; it would have been no surprise to see a pull back at some stage. And so it proved Wednesday morning when spreads opened tighter.

Japan’s sovereign CDS spreads were 11bp tighter at 105 basis points, reversing much of the widening of Tuesday.

The Nikkei was up over 5%, while the Markit iTraxx Japan index closed at 135 bp’s, 17 bp’s tighter than yesterday.

“Bid/ask spreads of 10bp were an improvement on the 15bp seen yesterday, though they were still considerably higher than the usual 1bp. Liquidity remains impaired,” credit analyst Gavan Nolan at Markit Credit Research points out in his daily summary.

A relatively bullish FOMC statement late yesterday added to the positive sentiment. he adds.

“The economy is on a “firmer footing” and the recent inflationary pressures will be ”transitory”, according to the Fed,” he writes.

But the rally soon lost momentum.

The impact of the nuclear accident in Fukushima is still uncertain, and there are now concerns over all six of the reactors at the plant.

A plan to use helicopters to cool the reactors had to be cancelled due to the high radiation levels.

“The lack of signs of improvement or even stabilisation sent stocks down sharply again and spreads were wider on the day during the afternoon,” Gavan Nolan explain.

And the incendiary comments from EU energy commissioner. Günther Oettinger, that the situation was “out of control” didn’t help- at all!

Nor did the press release a few minutes later, trying to explain that the EU commissioner only had expressed his feelings of fear, and not stating any kind of facts.

Well, looking at the chart of Tokyo Electric’s 5-years CDS it seems clear that Mr.  Oettinger’s  feelings is highly correlate with the reality of the situation.

Japan wasn’t the only factor feeding risk aversion. Bahrain has been overshadowed by events in Japan but the deteriorating public order situation there has potential ramifications for global markets. Saudi troops moved in on Monday – at the request of the Bahraini government – and the authorities declared martial law yesterday. Troops used force today to drive protesters out of Pearl Square in Manama, the heart of the anti-government movement.

“Oil crept up from $107 to $111 a barrel today, a reminder that events in the Middle East can affect global growth,” Nolan notes.

European sovereigns continued to hold up relatively well, though there was one notable laggard, according to Markit.

Portugal was downgraded to A3 from A1 and left on negative outlook by Moody’s, the agency citing the “subdued growth prospects” of the Iberian sovereign.

This didn’t come as a shock to market participants, and the downgrade only brought Moody’s into line with S&P.

The country’s auction of 12-month T-bills, however, had a far greater effect on sentiment.

The EUR1 billion debt sale was met with relatively tepid demand, the bid-to-cover ratio of 2.2 significantly less that the 3.1 achieved at the last auction held only two weeks ago.

The yield was also considerably higher at 4.331% compared to 4.057%.

“The positive effects of the EU summit are still lingering but it hasn’t quashed talk of a bailout. Investors are all too aware that the sovereign has sizeable refinancing needs over the next two months,” Nolan concludes.

  • * Markit iTraxx Europe 105bp (+1), Markit iTraxx Crossover 410bp (+4)
    * Markit iTraxx SovX Western Europe 175bp (-5)
    * Markit iTraxx Senior Financials 158bp (-2), Markit iTraxx Subordinated Financials 278bp (-1.5)
    * Sovereigns – Greece 985bp (-5), Spain 227bp (-12), Portugal 513bp (+7), Italy 160bp (-4), Ireland 588bp (-20), Belgium 150bp (-4)
    * Saudi Arabia 133bp (0), Bahrain 351bp (-6)
    * Japan 115bp (-1)
    * Markit iTraxx Japan 148bp (-5)
    * Tokyo Electric Power Co – 345bp (-21)
    * Reinsurers – Swiss Re 125bp (-1), Munich Re 76bp (-1), Hannover Re 135bp (+2)
    * Utilities – RWE 87bp (0), EON 85bp (+2), EnBW 85bp (-2), VATFAL 69bp (-1)
    * Markit Evaluated Bonds – RWE Fin BV 6.5 2021 asset swap spread 95bp (0), EON Int Fin 5.75 2020 asw 129bp (0)


Filed under International Econnomic Politics, National Economic Politics