$40 million in 10 hours

[redfox]

http://www.washingtonpost.com/business/economy/atm-thieves-conducted-massive-cyberattack/2013/05/09/0c3c3a1c-b8ec-11e2-92f3-f291801936b8_story.html

Truly amazing story.

[Gregg]

Amazing and a little scary, but small potatoes. Remember the tweet last month (when AP's Twitter account was hacked) that said the White House had been bombed and the President had been hurt? One estimate (http://finance.paidcontent.org/about/news/read/24094865/fallout_from_the_ap_hack%27s_%27priciest_tweet_in_ the_world%27) of the cost of that hack on JUST the S&P 500 was $136.5 BILLION. In that case the loss was temporary, the markets plunged and then recovered all in less than 5 minutes, but consider this: The only way the market goes down is if people are selling. The only way it goes back up is if people are buying. The hacked tweet caused a whole lot of shares to be sold at rapidly declining prices. As soon as that happened someone (or several someones) was waiting, ready to buy them up.

It's all done electronically, using some pretty sophisticated algorithms. Some of them continually scan for key words in multiple news feeds and trigger trades if those key words show up. In this case it was "explosion" and "White House" and maybe a few others. It could just as easily be "hail" and "Kansas" for someone set up to trade wheat futures, or "freeze" and "Florida" to trade orange juice. The possible combinations are basically unlimited. IF someone were to coordinate those algorithms with a hack they could conceivably set up the world's largest pump and dump scheme. If it was set up to only capture a 1% return by jumping in and right back out of the DOW on the wild swing it would have the potential to make BILLIONS of dollars in just a few minutes. With that kind of money looking like low hanging fruit what do you suppose the chances are that someone is trying to pull that off every single day? My guess is 100%.

[Lainey]

Hopefully the banks have done something to counteract this kind of attack. Seems harder and harder to keep one step ahead of the cyber bad guys.