Good Luck on the $600B Contract - Just Watch Out for APT

Good post by Tom Barnett - Who Doesn't Want a $600 Billion Contract. By the way best of luck to IBM, GE, and the other US and western companies bidding for the right build out China's electric grid. 

Of course, every Western giant flocks to China, so IBM can only corner so much (expecting $400M over the next four years). It's just that everybody wants to be part of this unprecedented effort at making a hugely inefficient system that much more smart. The scale of the effort alone means that the resulting market can be turned outward toward the rest of the world.

This has been my basic advice to Western companies for close to a decade: get to China and participate--whatever it takes--and then jump into the wider race of taking that technology to the rest of the emerging world. Because God knows the Chinese will steal everything they can and do the same if they can.

Which, of course, makes them the most capital of capitalists.  

Speaking of capitalism, the US budget forecast was announced today, the forecast is for a $1.6 trillion deficit for this year alone, I know we've seen a lot of big numbers in the last 18 months, but read that number again. Or better yet, let me add the zeroes in for you $1,600,000,000,000.00, that's the forecast on top of what's already owed from recovering from the leverage-induced crisis, so the current blueprint is leading towards a $13 trillion, no wait a second a $13,000,000,000,000.00 deficit - no wonder the US is in the Debt Ring of Fire. 

Who do you suppose is picking up the tab for all this debt? In the long run, we don't know, but if you have kids its probably them. In the short we run we don know who is picking up the tab - China.

Now amidst all this we have the current infosec APT side show, the latest series began several weeks back with breathless stories of Google pulling out of China (newsflash - Google is still there and has no intention of leaving - guess Schmidt & Co. must have passed Economics 101). 

Now I am not in charge of foreign policy but I am pretty sure it makes zero sense for someone with $13 trillion (USA!USA!) in debt to pick a fight with their banker (China). And I am also pretty sure that it doesn't make sense for someone with factories (China) to pick a fight with their biggest customer (USA).

But anyway, this is the escalation we are told we have to buy into.

Let's go back to an old Tom Barnett briefing from 2004 timeframe

When I did my workshop series atop World Trade Center I, 107th floor Windows of the World, we had people sitting around a giant U shaped table, talking about the future of the world, future of globalization, what could derail it.

On one side of the table, the Wall Street CEOs said "China - future of integration, future of investment, future of production, future of profit.'

And on the other side of the table the Admirals and the Generals from the Pentagon and they said "China - future of danger, threat, military aggression, war."

So the Pentagon's map and Wall Street's map overlapped precipitously on China. That gets wiped off the map on 9/11, China is a huge historical beneficiary of that process because they become our new friend on that basis, and we stop fixating on them, because we've got somebody else to worry about.

So as we are told that China is supposedly disrupting sectors like the oil industry and at the same time that they saved the western financial system at the height of the crisis, we're left to ponder the question - is it acting any different from how a normal rational actor would? 

The thing is that APT hype makes it sound like this is some nation state conflict, its anything but. Its straight up capitalism homey, remember...the kind we used to be good at? The "threat" in APT is your customer *and* your banker. In others words the same system you inhabit. I don't doubt that there's industrial espionage, I don't doubt that some of its very Advanced, but I am not seeing the linkage to escalating to some unprecedented national crisis, again it looks very much like capitalism behavior to me and what people who have competed against the US say 40-50 years ago would have experienced. So to that kind of whining I say - Butch Up Sally, capitalism isn't flag football. It reeks of people not knowing the Pentagon has a new map.

What happens next? Jim Rogers has an idea

Q: Do you think this crisis is just going to solidify the advantages of China and these other Asian and Southeast Asian economies?

Jim Rogers: Well, again, throughout history, the center of the world has shifted to where the capital is, where the assets are. You don't see any period in history where things are shifting to the debtors, and America's the largest debtor nation in the history of the world. Unless something's different this time, unless the world's changed very very dramatically, the center of the influence, the center of power, the center of the earth, the center of the globe, is going to be shifting towards Asia, because that's where all the money is. Have you ever heard of anybody saying, "Let's go to where all of the debtors are"? It just doesn't happen that way.

Security is about risk and risk is about assets. Threats are interesting to talk about, but ultimately its the assets and their protection that matter. Charlie Munger from the Berkshire Hathaway 2008 annual meeting

You can see how risk averse Berkshire is. We try to behave in a way so that no rational person will worry about our credit. We also try to behave in a way that if people don’t like our credit we wouldn’t notice for months. That double layering of protection against risk is like breathing

Risk management, according to two of the most successful investors, focuses on layering margins (not the plural - margins) of safety around assets. Threats are assumed, its the asset safety (or survivability if you prefer) that matters. Do you do this in your technical infosec architecture? 

Just like there is a US Debt Clock that keeps track of the debt obligations, infosec has its own technical debt clock.