Financial Cryptography

New Machine for FC

FC is now mounted on a new machine. It's faster and so is the network. This might even work, if you can see this, it probably is! Let us know of any problems.

First Impressions on reading Spence on Signaling

I just this morning finished Michael Spence's seminal 1973 article entitled "Job Market Signaling [1]." I'm still musing on it, as it has a lot to chew through. Here are some early comments.

Firstly, Spence introduced the term signaling, but he explicitly didn't define it [2]. I say this to lead into some later remarks. His view was that signaling was something that was undertaken only infrequently; he was specifically looking at the case where the signaler did not acquire the ability to signal well.

Next. The asymmetric information school - which may or may not claim to incorporate signaling - assumes that there is an asymmetry of information, and thus the task is to incentivise the sharing of that information; to whit, reduce the asymmetry and thus make the allocative decision more efficient.

That's not what Spence and Job market signaling is about. Spence explicitly accepts that the market in jobs is symmetric and insufficient; something I had noticed and developed more strongly in my (draft) market for silver bullets. That is, the task here is not to get the individual to reveal information that he holds to his advantage, but to predict something that is otherwise only found out at extreme cost (risk investment in employment decisions).

Which means, amongst other things, that I now have to rewrite my silver bullets paper to take into account that I'm 32 years behind Spence on this point. Lucky it wasn't 33 years, is all I can say. Also luckily for me, his market in education mirrors my market in silver bullets, which leads to the next point: The equilibria in this market arises without reference to the original import of the signal. My model was based on herding, his is based on confirmatory feedback (perhaps like Senge or even Boyd) [3]. The two sit side by side, which means I can build on his and incorporate the two together. I still have a chance of a paper, then!

One point is widely understood; the signal must be expensive for one group and cheap for another. If the costs of acquiring the education are the same for all, there is no value in the signal. This might mean that there is a desire to make sure this is not the case; but this search for apparent differentiation is countered by the feedback equilibria being reached without resort as above.

Finally, Spence actually suggests that markets based on signaling are inefficient, and the signals themselves are not especially correlated with productivity. If his implicit unwritten definition is accepted, signaling is not a good to be pursued, rather a bad to be avoided. That is, the question for the job market, and the education market, is how to avoid the product of education being reduced to the 'bad' of a signal.

This was a surprise for me. I had simply assumed that signals were positive things. Perhaps it is the literature that suggests this, or perhaps it is the crossover to Akerlof, where the lemons market signals positively. This underscores the dictum of going back to the source. Secondary references such as Wikipedia and the Nobel site just don't bring this out.

To underscore this, the paper shows that in some equilibria, it is reasonable to postulate that all parties are strictly worse off in the presence of stable signaling. Further, indices - those signals that cannot be changed and are assumed a priori irrelevant - can create the same equilibria.

Now, that makes sense. That's precisely what I've suggested with some of the much vaunted products that masquerade as security, which is what got us started on this whole signaling kick in the first place. And, if we can recognise that the market for security is one of signaling, and signals are an inferior allocative mechanism, then at least we are some way along in finding ways to deal with that.

[1] Michael Spence, "Job Market Signalling," Quarterly Journal of Economics, v 87(3), 355-374.

[2] It turns out that there are two spellings for signalling or signaling. I haven't as yet worked out the distinction, but I suspect another American English difference here. Here I'll try out his spelling rather than the English I was brough up with.

[3] Spence refers to Myrdal's vicious cycles, which Google puts at a 1957 paper.

The Twilight Zone

Those that are deep into transactional database work, as everyone in payment systems and the like is, know there is a deep dim and ghostly place that we all fear. I've just walked that through that place, and as soon as I saw it, I know I was staring at the Twilight Zone.

The Twilight Zone is a special nightmare for database engineers. It is when your transactional set forks into two; both are correct because they are transactions, after all, but both places are wrong because of the other place. Worse, the further time passes, the more chance of more forks, more and more places, all in the same zone. It is when the time-space continuum of your data fractures and spreads out in an infinite tree of possibilities.

I've always known it existed. When you've travelled so many databases, so many scenarios, you realise that the perfect database doesn't exist. Software is meant to fail, and getting it right today just means it will really go wrong tomorrow. For nine years, tomorrow never came, until one day in Vienna, I discovered a whole issuance of newly minted gold, Euro and sterling had just ... vanished into another space. It took me over two days of isolating and isolation before I realised where I was. And where I was.

(A brief digression for the non-digerati: database software does transactions, which are like records or receipts or sales or somethings that have special characteristics: they happen once and once only, if they happen at all, and if they happen, they happen forever. We call them atomic, because they either do or they don't happen, we can't divide them into half-happens. We do this because when we move money from one place to another, we want to make darn sure it either moves or it doesn't. No halfway house. And no going back, once we got there. We actually care so much about this that we don't really care which it is - happens or not happens!)

So when my fresh gold decided it had happened and not happened, I was sucked into the Twilight Zone. The reason it exists is quite fundamental: transactional software is perfect in theory, but implementations are flawed. No matter how much care you take, changes occur, features get added, bugs need to be fixed; step by small baby step, the logical beauty of your original design flits and dances towards the forking point. With all software, everywhere, no matter the manufacturer's guarantee, there will always be the possibility of so many bugs and so many patches and so many engineers who didn't understand, all one day coming together to split your state into the twilight zone.

This is why space shuttles blow up. Why Titanics sink, dams collapse, power grids shut down, and stock exchanges melt down. It's not because of a lack in the quality of the people or the software, it's because of the complexity of the system. Fundamentally, if you got it right, someone will build a better system on yours that is 99% right, and reliant on yours 101%. And the next person will layer their opus magnum over that great work and get that 98% right... and so it goes on until the mother of all meltdowns occur.

Specifically, what happened was an event notification - a new feature added in so as to enable chat broadcasts via payments - had a dodgy forwarding address. Which would have been fine, but the change to fix that broke. Which wasn't picked up in testing, because it didn't break in quite that way, but was picked up by a recovered transaction which did look it in exactly that way, which in turn failed and then went on to block another transaction in recovery. (Long time hackers will see a chain of bugs here, one tripping another in a cascade.)

This last transaction was a minting transaction. That means, it created value, which was the sterling I mentioned earlier (or gold, or Euro, I forget). Which, by a series of other unfortunate events caused yet another whole chain of transactions to fail in weird ways and Shazam! We entered the twilight zone where half the world thought they had a bucket of dosh, and the other half did not.

Fixing the bugs is obvious, boring, and won't be discussed further. The real issues are more systemic: it is going to happen and happen again. So infrequently that its very rarity makes it much more traumatic for its lack of precedent. It is very hard to create procedures and policies to deal with something that hasn't happened in living memory, would be fixed immediately if we knew how it was going to happen, and is so not-going-to-happen that the guarantee doesn't permit it. Nor its solution, nor even the admittance of the failure.

So how do we deal with the twilight zone? Well, like quantum physics, the notion is to look at the uncertain states and attempt to collapse them into one place. With luck this is possible, simply by re-running all the transactions and hoping that it all works out. With bad luck however, there would be a clash between transactions that resulted in leaving the twilight zone the wrong way, and being splintered forever: Simply put if I had given money to you in one place, and to your sister in another place, when the two places collapsed into one then the time-space of accounting would rip asunder and swallow us all, because money can't exist in two states at once. It would be light and day together for evermore. At the least, permanent migraines.

Which leads me to our special benefit and our own fatal curse: the signed receipt. In our transactions, the evidence is a receipt, digitally signed that is distributed to all the accounts' users. This means we as issuers of contractual value are locked into each and every transaction. Even if we wanted to fiddle with the database and back out a few tranasctions to pretend your sister doesn't exist, it won't work because the software knows about the signed transactions. This trick is that which I'd suggest to other databases, and that's why we signed the receipts in the first place; We never wanted that to work, and now it doesn't. Stuck, we are.

It does however mean that the simple tactical phase is a good starting point: re-run all the transactions, and live with the potentially broken accounts, the accounting time-space rent asunder if so discovered. How we'd deal with that is a nice little question for our final exam in post-graduate governance.

My walk through the twilight zone was then guided by a strategy: find all the signed receipts, and re-run them. Every one, and hope it worked out! Luck was indeed on my side this time, as it was a minting that had failed, so the two places were cleanly separated in the zone. I had to fix countless interlocking bugs, make yet more significant feature changes, and conduct days worth of testing. Even after I had done all this, and had watched the thrilling sight of 10 transactions reborn in my preferred space, I still had only the beginnings of a systemic solution to the problem of walking the twilight zone.

How to do that is definately a tricky problem. Here are my requirements so far: even though it should never happen, it must be a regular occurrence. Even though the receipts are scattered far and wide, and are unobtainable to the server, we must acquire the receipts back. And, even though we cannot collapse the states back when they have forked too far, we must re-engineer the states for collapse.

I have the essence of a solution. But it will have to remain on the drawing board, awaiting the next dim opportunity; as no-one willingly walks into the Twilight Zone.

A Penny at a Time

Sarbanes-Oxley victims are counting pennies. They know, or they have been told, it will bring benefits. But at what costs? Audit costs seem anecdotally to be up by 50% or so. Honest injuns think it might not be worth the cost. Chiefs keep silent, it isn't worth their salary to rock the canoe. Interestingly, the article suggests that this year is a hump, and next year should be cheaper as the systems are in place.

Which reminds me of another set of victims counting cost - the Brits. For some reason they've noticed that it is now very difficult to open a bank account, which might have unintended consequences.

Martin Hall, chairman of the JMLSG editorial panel, said: 'We have taken a radical approach. The new guidance reflects the reality, that most customers are neither money launderers nor terrorists.

Over in certification land, the recent insider job in an Indian outsourcing firm is being ramped up by those who hate outsourcing. Another article points out:

" Ironically it shows the weakness of the certification system, which is supposed to guard against things like this. The centre in Pune was BS 7799- and CMM Level 5-certified, yet the fact that such a theft took place shows that such assurances probably aren’t worth that much."

It's just one cute data point, we'd needs a survey to really decide if that was statistically meaningful. Here's some more data points: The alleged #8 spammer in the world got 9 years in the slammer.

Let's work that out. If each spam costs a lost second to delete, then 3 million spams is worth a year. Nine years is worth 27 million spams. Now, if #8, a.k.a. Jeremy Jaynes sent a mailshot of a million a day, and he'd been doing it for a month, that's about right. An eye for an eye, a second for a spam. If however he had consumed say 70 spam-years, then that's a death sentance: 220 million spams means we lost a life somewhere, in the aggregate.

Looks like he got off lightly.

Meanwhile, some great figures are appearing from an e-crime conference where CEO from HSBC, spoke.

"The UK apparently leads the world in terms of 'bot nets', or collections of compromised computers that are rented out by criminal gangs. In March of 2004, German police uncovered a network of 476 hackers in 32 countries who had turned more than 11,000 computers into such 'zombies'. In September 2004 a Norwegian internet company shut down a bot-net controlling 10,000 machines. And SpamHaus estimates suggest 50,000 new zombie systems may be appearing each week."

And in the proportionality stakes, the unintended consequences of criminalising theft of IP strike home: one games manufacturer has complained to the FBI about several years of illegal selling of their game. By rights, the FBI ought to swoop in and bust the place up ...

I wonder if anyone has thought of making a game of strategy out of IP theft?

Going Binary, half a bit at a time

The Champion of NerdHerders points to the pathological habit of nerds-gone-binary to do either all of it or nothing. It's true, that we all face this inability to create a sensible compromise and to recognise when our binary extremes are unacceptable.

But I don't think it is so black and white. It's alright to say "why not use Jakarta this/that/other" but in practice it tends to hit up against some real barriers.

Firstly, what happens if you don't spend your entire life following the esoteric and mindboggling silly arguments as to whether this tool is better than that tool? How are you to know what tool to use?

In practice, in a big enough team, there is a role for tool-meister. Or package-tamer. But for most teams, that luxury simply isn't there. My own feeling is that any tool I know about, if I can't see the fit within an hour of reading, then that's it, it's all over, and most tools aren't set up to come anywhere close to that. (So to eat my own dogfood I spend a lot of time writing executive summaries to bridge that gap, but I also recognise how few times I've succeeded!)

My general strategy is to ignore all tools, all competitors, all everything, until I've had about 3 independent comments from uncorrelated sources. The alternate is to drown. My strategy gets about a 99%hit rate, as within a year, last year's flavour is gone, replaced, forgotten. (Last year it was all Struts, this year, Spring. Do I add to last year's wasted effort with another month on Spring this year?)

Secondly, it is my overwhelming impression that most tools out there are schlock. They are quite literally junk, pasted over with some sugar coating and lots of enthusiasm. Now, that's nice and I'd fight for the right to let those people do that, because some of them aren't, but in practice, I don't want to spend a month fighting someone else's schlock when I could do the same with my own code.

Sometimes this works out: the most extreme case was the accounting engine I wrote. It took a month to do the whole thing. I estimated it would take a month just to create the _recovery strategy_ for an off-the-shelf database engine. (It will still take a month, no matter what, I think. That's because it has to work, in FC.) So for one month's effort, we've got a free engine that is totally tuned to our needs. The next best thing is Oracle, and that starts at five figures. Per unit. And climbs...

Sometimes this doesn't work out: our approach to writing a website framework for payments was a costly 2.5 year lesson in how hard it is to create good frameworks. But, even when we wanted to replace our stuff, the choice was and is shlock. I spent some months learning the J2EE frameworks, and concluded they are not going to cut down the time by so much. Plus, they're Schlock, I have no confidence in the security of J2EE and no confidence in the manageability of it. (Now, 4 years after the fact, someone wrote a J2EE framework that does the job. Even that had to be rewritten by the first programmer on the job.........)

Thirdly, when you are dealing with other people's tools, you create an admin load. The more tools the more load. The more you have to install, the more that can break. And, this not only hits you in the cost-of-server shorts, it can blow you away legally, as some tools come with poison pills that just aren't predictable (and, I'm not just speaking of licences here, but needs for support, costs in programmers, etc etc). The same with languages; Java is a cost, because there is so little support for non-preferred platforms, Perl is a cost because it isn't 64bit compatible in all senses yet, PHP is a cost because every time they up the revision, the language shifts on you ... on and on it goes, always trouble, and it grows with at least proportional to the number of tools.

It's tough. I think there is a desperate desire in the programming world to churn out a solution so damn quickly it's as if it came out of a recipe book, and anything else is unacceptable. That's not a real picture of the world, especially if you are building software that has to be relied upon.

On the other hand, what is easy is when someone says "oh, you should use XYZ" and really mean it. It's extraordinarily rare that they know what they are talking about, and it's a great differentiator between some junior nerd who's still in slashdot space, and someone who's actually been stabbed by tools and knows stuff.

Penny Chat

I hadn't noticed this before but PGP's new beta version 9 of their product includes AIM chat protection. I guess this means that even though PGP Inc people don't agree with me that email is dying, a hedge isn't a bad thing.

Mozilla security is back in the news again with a $2,500 bounty for Firefox flaws. I think this is a good idea. Research I'm working on indicates a dramatic need to improve information (as opposed to acquiring information from asymmetrically informed parties, which I reject) and this is one way to do it.

Speaking of paying for stuff, it seems that the top price for your social security number (if you are an american) is $45. That sounds high to me, there are obviously going to be deals for bulk work.

It's $35 at www.secret-info.com. It's $45 at www.Iinfosearch.com, where users can also sign up for a report containing an individual's credit-card charges, as well as an e-mail with other "tips, secrets & spy info!" The Web site Gum-shoes.com promises that "if the information is out there, our licensed investigators can find it."

"The current system has the worst of all worlds," Solove said. "Anyone can easily find it [the Social Security number] out . . . It's used everywhere, and it's really hard to change if it falls in the wrong hands. How could you come up with a worse system?"

Yes, I'd agree. In fact if we all sat down and tried to design a worse system, I'm not sure we could. Why is that?

An unusual claim: are people naturally doing mental double entry bookkeeping? An article suggests that they are. I'm not so sure I'd go that far, but it is food for thought. Note that the article does not list any primary research, and the site for the interviewee has older papers listed only:

In closing, more research saying "you should buy our 2-factor doobelackie."

Published: 01/04/2005 00:41:00

Banks urged to act on Net security fears

Banks must act "urgently" to tackle Net user security fears if they are to
retain and attract customers to cheaper online channels says Forrester
Research.

In a survey of more than 22,000 Europeans, Forrester found that just 30% of
Internet users are confident of the security of personal financial
information, like credit and debit card numbers, when used to make
transactions online. Two-fifths of the European Net users who don't use
online banking say they don't because they worry about security.

Benjamin Ensor, senior analyst, financial services at Forrester says:
"Consumers' deep-seated security fears remain one of the biggest barriers to
online banking use in Europe, particularly in countries like Italy, France,
and the UK, where two-factor online banking authentication is rare or
unknown. The more confidence Net users have in security, the more likely
they are to bank online."

The analyst group says that banks should look to educate Net users about
security precautions, not let usability fears compromise security, deploy or
strengthen two-factor authentication "urgently", and collaborate rather than
compete on security.

¿ Finextra Research 2005

It is amazing what research you can buy in an open market.

Forbes - The Wages of Sin

An article from Forbes' Lea Goldman on who is filling the gap from Paypal's avoidance of 'tainted' transactions.

Other piglets are feasting at the trough abandoned by PayPal. GKBill.com of Antigua services at least 11,000 porn sites. Moneybookers of London has already signed up 800,000 customers, including a fair number of online porn outfits. "It's been a huge opportunity for us," says David Roe, Moneybookers' chief operating officer.

The Wages of Sin
Lea Goldman, 04.25.05

PayPal won't touch online gambling, porn and other vices. That's just fine with Neteller.

No buxom cocktail gals distract the 40,000 or so gamblers on PokerStars.com at any given time, where high rollers plunk down an average of $100 to $200 per transaction. So popular is the site that it doubles its player pool every six months. Some of that business slides right into the pocket of a company called Neteller Plc., the largest handler of financial transactions on the site.

PayPal, the Ebay-owned e-payment financier, used to control that rake--until it swore off the business in 2002, citing legal risks. A year later PayPal paid $10 million to settle Justice Department allegations that it violated provisions of the Patriot Act barring the transmission of funds known to have been derived from a crime. (Federal law effectively bans online gambling sites from operating in the U.S., but it doesn't prevent American gamblers from using them.) With $18.9 billion in online transactions last year, PayPal has also disavowed the sale of material for "mature audiences," which it says poses a high risk of chargebacks, where a customer refutes a charge. Says a spokeswoman, "We decided to focus on more traditional businesses."

And punish the sinners. Last summer PayPal announced that merchant violators of its "acceptable use policy" risked a $500 fine. The company threatened to freeze out little guys like Perry Brass of Bronx, N.Y., who used his own site to sell his erotic fiction, and Rod Shelley of Independence, Mo., who peddled old issues of Playboy.

Crumbs for PayPal, perhaps, but Black Forest cake to an outfit like Neteller, headquartered on the Isle of Man. It claims to handle transactions for roughly 90% of all online gaming sites and compensates for chargebacks by getting as much as 8.9% per transaction versus PayPal's 2.9%. To date the company boasts 1.5 million customers (versus PayPal's 64 million accounts) and enrolls 3,000 new members every day. Last year it netted $33 million on $82.6 million in sales. In the last year its shares, traded on the AIM London Stock Exchange, have tripled to the equivalent of $11.56.

Other piglets are feasting at the trough abandoned by PayPal. GKBill.com of Antigua services at least 11,000 porn sites. Moneybookers of London has already signed up 800,000 customers, including a fair number of online porn outfits. "It's been a huge opportunity for us," says David Roe, Moneybookers' chief operating officer.

Online gambling, now $9.8 billion a year, will grow an average 13% annually through 2010, estimates industry tracker Christiansen Capital Advisors. Neteller is eyeing more conventional businesses, too. Last month the company paid $12.5 million for Quick Access International, a debit-card processor in Macau that handles $50 million of transactions a year in Asia, most non-gambling-related. Taking the moral high ground may yet prove costly to PayPal.

Cubicle adds to Security Research on Skype

Cubicle packaged up the available analysis on Skype and came up with a bunch of risks which the spreading VoIP app imposes on the poor corporate victims of free telecoms. The bottom line was that the risks remain low; although Cubicle didn't say that. Score 3 points for Jedi Knights of the Crypto Rebellion, taking their score to 4.

I said more about how low risk Skype is to security a while back (click on Jedi above), and stirred up a storm of controversy. That's because I treat security from a statistical and opportunistic fashion: if it improves the situation then that's .. an improvement. That's good, by definition. If it ain't there, that's not an improvement, by definition. So if you don't use a crypto product because it has some unvalidated weakness, then by definition you have reduced your security. That's bad.

The really great news is that if Cubicle and others can find a problem and actually validate a risk, then Skype will probably fix it, and that'll be yet another improvement, right there! Our cup runneth over! Go Cubicle!

Addendum: reading late last night, and now that I've actually read one article, there is a risk pointed to there, which is that Skype could be used to deliver spyware, and apparently the Kazaa cousins were already spotted doing that... One worth watching, but this remains an unvalidated risk. I haven't had time to read the other pdf yet.

The Next Corporate Liability Wave?

Your phone rings. It's Special Agent Bert Ranta. The FBI is investigating a crime ring involved in widespread identity theft. It has led to millions of dollars of credit card and loan losses for lenders, and havoc in the lives of the 10,000 victims. By identifying links between the victims, the FBI has discovered where the personal data appear to have come from: your company. The victims are some of your customers.

Your mind begins to whirr. Are there other customers affected who haven't been identified yet? Is it a hacker or an inside job? Is your company also a victim here, or could it be on the wrong end of a class action lawsuit?

You recall reading that each identity theft victim will on average spend $1,495, excluding attorneys' fees, and 600 hours of their time to straighten out the mess, typically over the course of a couple of years. For out-of-pocket costs alone that is, say, $2000 per victim. Multiplying that by 10,000 customer victims equals $20 million. Adding as little as $15 per hour for the victims' time and you get $11,000 per case or $110 million in total even before fines and punitive damages are considered. And that's on top of the potential impact on your company's future sales.

...

http://www.law.com/jsp/cc/pubarticleCC.jsp?id=1112090711870

Lopez v. BoA leads to rising bank FUD, if not clues

I've written before about how a major milestone in phishing was reached when Lopez sued Bank of America in Florida, USA. If you don't see that, click and read this article. It is maybe not obvious on the outside, but for once, a press journalist has talked to some people in the banking world and discovered something new: Fear.

Regardless of what a judgement or settlement brings to the actual litigants, dotted-line association with the BofA case will likely cause financial institutions to spend at least some additional money on security to prevent fraud. And since North American banks already spend more than $1 billion per year on such technology, the notion that they're not spending it in the right place or in the right amount raises temperatures. "I just came from Washington, where I was at a meeting of 40 financial institutions, regulators and the government," says Ilieva Ageenko, director of emerging enterprise applications for Wachovia. "We all said there's a press euphoria [about on-line crime] and pretty much all institutions have a very well-defined risk management strategy that allows us to identify fraud."

Banks are scared of the Lopez case. What does that tell us? It tells us that banks know this is not a frivolous case and furthermore banks don't know what to do about it.

All the buzz is about 2 factor authentication tokens, but in their hearts, banking people know this isn't the answer to the problem. The reasons are several-fold: one is that they are expensive, and the banks likely will have to foot the bill - one hardware gizmo for every customer. A second reason is that the banks also suspect that the secure tokens being peddled by irresponsible companies are not a real answer to the problem, but are only a short term hack.

The banks suspect this but the peddlers aren't telling the truth. Security people have known for a long time that these tokens are subject to phishing; all they do is force the phisher to do a dynamic real time phish instead of doing the connection to the bank in their own sweet time.

Yes, ladies and gentlemen, the secure tokens guarantee that the user and the bank are talking together right now, but they don't guarantee someone isn't in the middle passing packets back and forth and listening happily to traffic! Spoofing - phishing - is a class of attack called man-in-the-middle (MITM) and these tokens .. fall to the MITM. Or will do when the phishers get around to it.

So what's the solution? FCers know the solution is in bringing the user and her browser back into the security model. Banks know they can't do that (alone), but they also know that at the end of the day, they are going to have to carry the can (also alone). Even if the Lopez case goes against them, all the posturing tells us one more thing: banks know the FDIC or whoever will eventually put the onus on them to solve the problem.

So who can solve the problem? Who do the poor phishing victims have to sue?

"Wachovia offers the standard 128-bit encryption and requires on-line customers to have user IDs and passwords."

Who told you that would secure your customers?

Some more snippets: Stats suggest that users (now, still) trust online banking more then branch banking. Yet corporate customers would change banks if they could get fraud controls from a new bank (sorry, PDF).

Pennygate

Jim posts his proposal for fixing email crypto.

Rumours abound about trouble in Wall Street based on derivatives. Citibank is drowning in unmatched derivative positions, and their plan is to net it all and write off the rest. No, they ain't saying how much that means, but apparently their market cap and their bond ratings are of much interest. As are General Motors' numbers. Meanwhile the AIG scandal broadens and it looks like Berkshire-Hathaway, famed vehicle of Warren Buffet, is likely to be dragged in for more than questions.

Can we say one word, please? Settlement.

Elliot Spitzer's office in New York is again in action, and we now have to just accept that the AG's office of New York is one of the top tier regulators in the US, alongside the Fed, the SEC and the others. Elliot Spitzer is somewhat hated on the (Wall) Street, but he has a habit of picking real targets, unlike his predecessor (who was truly despised). Spitzer is loved by the man in the (main) street, so it's likely there are shoes in his size waiting in either the Governor's office or the Mayor's office.

Stefan points out that the Department of Homeland Security and Liberty Alliance are both engaged in the same form of doublespeak, using the names of one thing they are not doing to describe exactly the opposite. I've always wondered why Liberty Alliance came across as the worst form of snake oil and now I know - because it is. Their psuedonyms are centrally created and controlled!

I've always been suspicious of the Liberty Alliance, as their name stinks. It sits in the same bucket of snake oil as "Patriot Act" and indicates that they are intentionally trying to dupe people. How dumb do they think we are?

And in more scandal news, Bob reports that Dateline is to air the Stockgate scandal on the 10th April.

A good article on the impending VoIP telemarketing boom. The normally relaxed Cubicle says this ain't gonna happen, but I've already seen it in action. It'll happen, but maybe not as the reported in that article.

And in Moscow, the central bank got embarrassed when copies of its transaction database were advertised in the press. Even worse, the price started at $2000 and dropped down to $800 for about a year and a half's worth! Talk about a poke in the eye with a burnt stick.

Biggest transaction: 2.96 billion rubles for some bonds. Should have used SOX!

And, just in: Adam points at ElReg's reporting of Microsoft recruiting security engineers. Definately worth a read if you are trying to figure out what Microsoft thinks security means.

Odd things going on at ICANN

You'll already have seen the recent stories about the .net contract going back to VeriSign. The decision was made on the technical capabilities report, with the report being accepted without discussion, without input from the stakeholder public, and more disturbingly, only consultation with DNS experts, no input. (See ICANNWatch.)

Addendum: from the report, Eric claims it was a tie and Verisign was chosen arbitrarily from the two leaders.

It seems that ICANN does not consider overall governance issues as important in its decisions on domain renewals, as mooted in comments by ICANNWatch's Michael Froomkin.

Further, one of the "losers", Denic, was apparently knocked out on a false claim that it has an in-house built database! That's a sad bad decision if true, and I speak as someone who builds in-house, own built databases for the most sensitive of tasks - because they are the most sensitive of tasks!

Back over on ICANNWatch, they announced that the ITU is merging with ICANN and that WIPO lost its domain to a baby wipe company. That's about par for the course...

In other news, two new TLDs have been launched as .travel and .jobs, and ICANN does consider itself in a position to
charge a tax of $2 per domain. The .net contract is being re-negotiated with a 75 cents tax.