Another great show. We may not be in crisis, but we surely are embattled across the Earth. Bolton was exactly the right person to have on last night. He calmly explained his take on what was happening at the WH, which was reassuring to me. Glad the ground stop is lifted, now for the organized chaos of getting flights back on track. What will the football games look like this weekend, oh my! Have a great weekend, hopefully with family.
Very clear why Madeline Summerville is a pundit and consultant versus an owner of a business or top exec in a business. Clearly, she'd rather DEI hires over the most brilliant and capable minds. Funny how many dems now think Musk is inept --the man is giving vision to the blind, movement to paraplegics, landing rockets on planets, creating flying cars...but because he's now "on the right", that puts him into the camp of idiot. Amazing how people would rather see the entire ship sink than bring in someone who doesn't wear their teams' logo.
My note to financial markets Friday night focused on markets risks. Excerpts:
This month’s many cyber and telecoms disruptions make infrastructure and cyber risks concrete for financial markets in 2 ways.
1. They create markets volatility depending on which sectors/industries are affected.
2. They also raise the potential that financial markets can and may become targets.
This makes it incumbent upon the exchanges, and US regulators and elected officials, immediately to do all necessary to ensure that markets are prepared and can function smoothly - and to reassure the public of it.
Many steps were taken post-9/11 to derisk the systems upon which markets functioning depends. But human nature, revealed weaknesses, the 25 years since 9/11, and the determination and sophistication of foreign actors in the highest geopolitical risk in over 50 years, all point to the need for immediate steps to ensure the security of financial markets.
US media tonight focus on 2 major disruptions, the US national air ground stop and the Microsoft major incident. But several more this week also stand out.
The overall patterns are notable. Some events are confirmed cyberattacks, some are infrastructure failures with no disclosed cause, and others are physical attacks. Each can disrupt essential services; the cause matters for attribution and policy, but markets feel the operational consequences either way.
There is no public indication the incidents are connected. They show how quickly a technical or communications failure can spill into essential services.
Now consider the same kind of interruption caused deliberately, or occurring during a broader attack.
Markets are not just exposed to infrastructure failures; financial services and market systems are themselves targets.
The Federal Reserve warns that cyber events can disrupt market functioning and financial services, with effects spreading through interconnected institutions and critical providers.
CISA has also identified financial services among the sectors targeted by state-backed actors.
An attack on a trading venue, payment system, telecom provider or common software supplier could impair liquidity, payments and settlement, and confidence in counterparties.
Are markets ready? The exchanges will cite their response to 9/11. But 9/11 showed how badly the system can be disrupted—not that it is immune. And some exchanges even then disputed the severity of the problems.
Telecommunications are a particular weak point because they are decentralized, interdependent and partly public. Major exchanges and clearing systems may use proprietary networks, but that does not isolate or insulate markets from commercial carriers, shared physical infrastructure, outside vendors or public communications systems used across the financial ecosystem.
The US telecoms sector itself identifies financial services as reliant on telecoms to transmit transactions and operate markets. A “private” connection can still depend on power, fiber, equipment and providers shared with other users.
Software and cyber risk cannot simply be declared addressed.
The Federal Reserve has warned that attacks on third-party providers can affect multiple financial institutions, especially where firms have few substitutes.
Software vulnerabilities can become physical disruptions, and AI could shorten the time from finding a weakness to exploiting it.
A configuration or software problem alone can create broad operational consequences; an adversary could seek to trigger, exploit or compound the same weaknesses.
The 2024 Salt Typhoon episode sharpens the question of whether vulnerabilities are actually closed.
The Trump FCC says it worked with carriers to harden networks, and the FBI and CISA have issued guidance.
But the public record still lacks a detailed, independently verifiable account of what was compromised, what was removed and how complete the remediation is.
The FCC also rescinded its earlier ruling and proposed carrier certifications.
That leaves markets with assurances of cooperation, but deprives the public with any ability to judge whether the underlying telecom exposure has been eliminated.
The market risk now will be increasingly viewed as direct. Infrastructure failures can interrupt trading, payments and business activity. The strategic risk is that markets themselves are attractive targets, while their operations depend on networks and providers no single firm controls.
This week’s disruptions are not direct evidence of attacks. They are evidence of how much disruption can follow when essential systems fail.
Another great show. We may not be in crisis, but we surely are embattled across the Earth. Bolton was exactly the right person to have on last night. He calmly explained his take on what was happening at the WH, which was reassuring to me. Glad the ground stop is lifted, now for the organized chaos of getting flights back on track. What will the football games look like this weekend, oh my! Have a great weekend, hopefully with family.
Very clear why Madeline Summerville is a pundit and consultant versus an owner of a business or top exec in a business. Clearly, she'd rather DEI hires over the most brilliant and capable minds. Funny how many dems now think Musk is inept --the man is giving vision to the blind, movement to paraplegics, landing rockets on planets, creating flying cars...but because he's now "on the right", that puts him into the camp of idiot. Amazing how people would rather see the entire ship sink than bring in someone who doesn't wear their teams' logo.
Agree with Bolton about Trump visit
But overall seeing crazy posts already and political extreme attacks of course
Quite honestly, done slant comments with NN reporters as well- all in how you say it; NN should do better
We are vulnerable, and our reactions are watched
My note to financial markets Friday night focused on markets risks. Excerpts:
This month’s many cyber and telecoms disruptions make infrastructure and cyber risks concrete for financial markets in 2 ways.
1. They create markets volatility depending on which sectors/industries are affected.
2. They also raise the potential that financial markets can and may become targets.
This makes it incumbent upon the exchanges, and US regulators and elected officials, immediately to do all necessary to ensure that markets are prepared and can function smoothly - and to reassure the public of it.
Many steps were taken post-9/11 to derisk the systems upon which markets functioning depends. But human nature, revealed weaknesses, the 25 years since 9/11, and the determination and sophistication of foreign actors in the highest geopolitical risk in over 50 years, all point to the need for immediate steps to ensure the security of financial markets.
US media tonight focus on 2 major disruptions, the US national air ground stop and the Microsoft major incident. But several more this week also stand out.
The overall patterns are notable. Some events are confirmed cyberattacks, some are infrastructure failures with no disclosed cause, and others are physical attacks. Each can disrupt essential services; the cause matters for attribution and policy, but markets feel the operational consequences either way.
There is no public indication the incidents are connected. They show how quickly a technical or communications failure can spill into essential services.
Now consider the same kind of interruption caused deliberately, or occurring during a broader attack.
Markets are not just exposed to infrastructure failures; financial services and market systems are themselves targets.
The Federal Reserve warns that cyber events can disrupt market functioning and financial services, with effects spreading through interconnected institutions and critical providers.
CISA has also identified financial services among the sectors targeted by state-backed actors.
An attack on a trading venue, payment system, telecom provider or common software supplier could impair liquidity, payments and settlement, and confidence in counterparties.
Are markets ready? The exchanges will cite their response to 9/11. But 9/11 showed how badly the system can be disrupted—not that it is immune. And some exchanges even then disputed the severity of the problems.
Telecommunications are a particular weak point because they are decentralized, interdependent and partly public. Major exchanges and clearing systems may use proprietary networks, but that does not isolate or insulate markets from commercial carriers, shared physical infrastructure, outside vendors or public communications systems used across the financial ecosystem.
The US telecoms sector itself identifies financial services as reliant on telecoms to transmit transactions and operate markets. A “private” connection can still depend on power, fiber, equipment and providers shared with other users.
Software and cyber risk cannot simply be declared addressed.
The Federal Reserve has warned that attacks on third-party providers can affect multiple financial institutions, especially where firms have few substitutes.
Software vulnerabilities can become physical disruptions, and AI could shorten the time from finding a weakness to exploiting it.
A configuration or software problem alone can create broad operational consequences; an adversary could seek to trigger, exploit or compound the same weaknesses.
The 2024 Salt Typhoon episode sharpens the question of whether vulnerabilities are actually closed.
The Trump FCC says it worked with carriers to harden networks, and the FBI and CISA have issued guidance.
But the public record still lacks a detailed, independently verifiable account of what was compromised, what was removed and how complete the remediation is.
The FCC also rescinded its earlier ruling and proposed carrier certifications.
That leaves markets with assurances of cooperation, but deprives the public with any ability to judge whether the underlying telecom exposure has been eliminated.
The market risk now will be increasingly viewed as direct. Infrastructure failures can interrupt trading, payments and business activity. The strategic risk is that markets themselves are attractive targets, while their operations depend on networks and providers no single firm controls.
This week’s disruptions are not direct evidence of attacks. They are evidence of how much disruption can follow when essential systems fail.