Posts Tagged ‘wall street journal’


September 1, 2015

Wall Street Journal on August 31, 2015, reported that the White House is preparing a menu of sanctions against Chinese state-owned enterprises and private companies that officials believe benefited from the cybertheft of U.S. corporate secrets, several people familiar with the matter said. Excerpts below:

The White House hasn’t decided definitively to impose the sanctions, but the process is far along and involves advanced planning from multiple federal agencies, the people said.

They said officials expect to target about five companies, though that number could change. If sanctions are ultimately imposed, it could affect the ability of those firms to access U.S. financial markets and trade with American companies, and could even hamper the ability of their executives to travel to the United States.

Sanctions would represent a notable escalation of the government response. The alleged Chinese actions present a particular diplomatic challenge because they can be widely damaging but are flatly denied by Beijing, and because it can be difficult to pinpoint which companies have benefited from particular hacking incidents.

Any initial round of sanctions is likely to target only a handful of companies rather than a broad swath of the Chinese economy.

“Overall what we’re likely to see is something that is a shot across the bow, leaving ammunition to actually shoot down large chunks of Chinese industry if there isn’t a favorable response,” said Robert Knake, former director of cybersecurity policy at the White House’s National Security Council and now a senior fellow at the Council on Foreign Relations.

Hackers have stolen corporate secrets from numerous U.S. companies, including agricultural firms, defense contractors and technology companies. Business leaders complain that these thefts will create major competitiveness and trade problems for American firms if left unchecked.

A federal grand jury in 2014 indicted five Chinese military officials for allegedly stealing U.S. corporate secrets from firms including Westinghouse Electric and Alcoa Inc. The charges included identity theft and computer fraud. The indictments were seen as one of the U.S. government’s most aggressive public steps to combat Chinese cyberattacks to date, though the indicted officials haven’t faced trial.

Several business and cybersecurity experts said that if the government does impose sanctions on Chinese companies, Beijing could respond with its own sanctions or other moves against U.S. firms.

Comment: Chinese theft of corporate secrets from US companies has been going on for years. The American sanction plan is limited but is hopefully a beginning that could result in extensive sanctions if the Chinese thefts continue. The West (not only the United States) needs a forward strategy in dealing with the growing geostrategic threat of China.


August 29, 2015

Wall Street Journal on August 27, 2015, reported that Ukraine’s private creditors have accepted a 20% write-down on the face value of their Ukrainian bonds. Excerpts below:

Ukraine said August 27, 2015, that it had secured a debt-relief deal with its creditors, a vital step toward unlocking billions of dollars in emergency financing, after months of stalemate threatened to derail its international bailout.

The agreement, which requires approval by Ukraine’s parliament, is a major success for the pro-Western government as it seeks to push through a series of politically tough economic overhauls and nurse its fragile economy to health.

But the simmering conflict with Russian-backed separatists in the eastern part of the country continues to exact a toll on government finances, and the debt relief by no means assures economic viability for a country that has long been struggling to stay afloat.

Averting a financial tailspin in the country of 45 million people has been a priority in Washington and European capitals, which have sought to buttress the government in Kiev against an increasingly confrontational Russia.

U.S. Treasury Secretary Jacob Lew urged creditors to move swiftly to complete the restructuring, calling it critical to Ukraine’s future prosperity. “A strong, stable Ukraine is in the interests of Ukraine’s citizens, Ukraine’s neighbors, its international partners, and investors,” Mr. Lew said.

According to the Ukrainian Finance Ministry, private creditors including U.S. mutual fund Franklin Templeton Investments agreed to a 20% write-down in the face value of their Ukrainian bonds, and to push back maturities on government debt by four years.

The hryvnia currency rose more than 3% against the dollar, and Ukraine’s central bank lowered its key interest rate to 27% from 30%, citing reduced inflation risks just minutes after the deal was announced.

Ukraine’s bonds jumped by about 18%. The price of two-year notes increased to more than 66 cents, from 56 cents, according to data from Tradeweb, the highest level since January.

Under the bailout terms, Ukraine needed to secure $15 billion-worth of debt relief, including interest payments, from its international creditors, as well as pass the economic measures, to release the rest of the promised $25 billion in rescue money from the International Monetary Fund, Europe and the U.S.

IMF Managing Director Christine Lagarde welcomed the deal and said Ukraine should meet the debt targets outlined in the bailout program—but only if all the Eurobond holders participated.

The conflict [with Russia] has destroyed critical infrastructure, fueled a deep recession, pushed the currency into a nose-dive, depleted emergency cash reserves and forced acute budget belt-tightening.

Besides the IMF, Kiev has the backing of Washington, the European Union and other Western allies who see Ukraine as a decisive geopolitical battleground to fend off the advances of an increasingly aggressive Russia.

After months of impasse, negotiations appeared to accelerate in late July, with both sides offering to make concessions. Prospects of a resolution were given a boost last month when Ukraine met the deadline for a $120 million coupon payment on its two-year bonds.

The turning point, said Ms. Jaresko, came…at San Francisco’s Hyatt Regency hotel two weeks ago,…

After leaving San Francisco, the parties spent two more tense weeks thrashing out details.

The agreement is a welcome relief also for other holders of Ukraine debt, who have been following the negotiations from the sidelines. The measures will apply to all the country’s outstanding debt.

Also on August 27, 2015, Wall Street Journal reported that Ukraine’s US-born Finance Minister Natalie Jaresko is praised for her persistence. She was personally involved in securing the debt-relief deal. Excerpts below:

After announcing a deal to help stave off bankruptcy at a government meeting Thursday, Finance Minister Natalie Jaresko received an unusual gift from her fellow ministers: a painted artillery shell casing.

Ms. Jaresko, a 50-year-old American who but only recently became a Ukrainian citizen, was being hailed as the hero of the battle to save the economy, one being waged at the same time as the country fights pro-Russian separatists in its east.

The finance minister led months of tense negotiations with private creditors, clocking thousands of miles flying from Eastern Europe to the U.S. to persuade them to accept a 20% write-down on the face value of their bonds and later repayment. The deal should help Ukraine secure further bailout funds from the International Monetary Fund.

Ms. Jaresko, born into a Ukrainian diaspora family in Illinois, arrived in Kiev two decades ago as one of a handful of diplomats charged with opening the U.S. Embassy. She later moved into the private sector, eventually co-founding the Horizon Capital private-equity fund in 2006, which focused on the region.

It was only after a revolution last year swept Ukraine’s pro-Russian president out of power that Ms. Jaresko contemplated another stint in government.

In December, President Petro Poroshenko tapped her to run the Finance Ministry, a post with notorious bureaucracy, corruption and near-empty coffers—all for a salary equal to $300 a month.

Ms. Jaresko, who speaks Ukrainian, is no stranger to the difficulties of making the case for the country: Colleagues at Horizon Capital say she spent the first year at the fund in hundreds of meetings, traveling thousands of miles to follow up on the slightest flicker of investor interest in Ukrainian assets.

Comments: This is welcome news. This blog has long argued that securing Ukraine as a state is more important than supporting Greece, although financial stability is important in both cases. Ms. Jaresko has proven to be an effective Minister of Finance and the present deal could be a turning point for Ukraine. A financially strong Ukraine is a must when taking on Russia.


September 29, 2013

Washington Times on September 28, 2013, reported that Iran is said to have stepped up cyberattacks on the U.S. military. The news comes at a time when President Obama and Iranian President Hasan Rouhani communicated by phone call for the first time since the Carter administration.

Cyberintrusions aimed at an unclassified computer network belonging to the U.S. Navy began the week of Sept. 15, just before a planned upgrade, The Wall Street Journal reported.

“Iran is very active,” said James Lewis, a former State Department official and cybersecurity specialist at the Center for Strategic and International Studies, to The Wall Street Journal. “They’re better than we thought.”


September 7, 2013

Wall Street Journal on August 29, 2013, reported that South Korea’s spy agency continued with its second day of raids on members of a minor opposition party, in an expanding probe into allegations they sought to topple President Park Geun-hye’s government.

The United Progressive Party, which holds six of the 298 seats in the country’s parliament, has repeatedly denied the charges. …three UPP members were arrested and state prosecutors say they imposed an overseas travel ban on 14 party members. South Korea’s spy agency, the National Intelligence Service, raided the offices and homes of 10 UPP officials Wednesday.

The spy agency declined to comment. South Korean media, citing unnamed investigators, said the UPP members were accused of plotting to storm firearms stations to secure weapons, destroy oil-storage and communications facilities, and assassinate unspecified figures while praising North Korea–an act still banned by Seoul’s security law.

Opposition parties are pressing Ms. Park to reform or even dismantle the NIS. Ms. Park, who took office in February, has shrugged off such calls, which has angered the opposition.

South Korea hasn’t recently seen arrests over plots to overthrow the government.


September 1, 2013

Wall Street Journal on August 29, 2013, in a leading article commented on President Obama saying that he hasn’t decided whether to attack Syria, adding that any strike would be a brief “shot across the bow” in response to the Assad regime’s use of chemical weapons. We can’t recall another President suggesting his goal was to miss his military target. But assuming he does want to hit something and have a military impact, our suggestion would be to take out the regime’s air force. Excerpts below:

So far the debate over military intervention has been posed as a false choice: Either do the pinprick attack that multiple White House leaks seem to portend, or do a much larger intervention that means a long campaign and ever-deepening military commitment. The former won’t make much difference and might even strengthen Assad, while the latter is intended to frighten the American public into believing any intervention means another Iraq or Afghanistan.

…an analysis making the Pentagon rounds shows there is a more realistic military option. It comes from Christopher Harmer, a former Naval aviator now at the Institute for the Study of War, a Washington think-tank. The plan has been examined and broadly endorsed by retired four-star General Jack Keane, one of the architects of the 2007 “surge” that saved the day in Iraq.

Mr. Harmer starts with the proposition that the Syrian air force is far from mighty, with only 100 or so planes and perhaps only 50 of them still operational. They fly from only six major airfields controlled by the regime. “The Syrian air force is this close to being defeated,” he says, holding his thumb and forefinger an inch apart.

These columns have endorsed a no-fly zone in Syria, but Mr. Harmer says that isn’t necessary. Target those six airfields—their runways, bomb and fuel depots, control tower and radars—and you can essentially shut down the bombing raids that have so harmed the opposition. Going after the aircraft would also be desirable but is unnecessary if the Syrians can’t sustain flight operations. The U.S. might need to attack the airfields again if the Syrians are able to repair and rebuild, but similar sorties could do the job.

Even better, Mr. Harmer says all of this can be done by using standoff weapons like Tomahawk cruise missiles and air-to-surface missiles like the JASSM. No U.S. pilot would be put in harm’s way, since no aircraft would have to enter Syrian air space. The attack also wouldn’t require taking down Syria’s air defenses, which he says in any case are far less capable than advertised.

Every military operation has risks, and even in this scenario Syria and Iran could hit back at other U.S. targets, such as embassies, or at our allies. But the point of the Harmer analysis, says General Keane, is that there is a practical and limited military option that does serious damage to the regime’s capacity to wage war against its own people.

This in turn would level the battlefield for the opposition. The Syrian military strategy has been to spread terror by dropping bombs indiscriminately on rebel-held territory. The chemical attack in part of Damascus was merely an extension of that bloody strategy.

Which brings us back to Mr. Obama’s goal in striking Syria. So far, we’re told, the U.S. has provided no direct lethal aid to the rebels. We also hear the Saudis have been supplying less military aid than they otherwise would due to U.S. opposition. This suggests the Administration isn’t sure it wants to oust Assad from power.

If this is true, then a mere “shot across the bow” attack could leave Assad even stronger. He’ll know that he survived the “consequences” that Mr. Obama promised with only minimal damage. He’ll also know he can unleash his air force and perhaps even chemical weapons again with little chance of further U.S. military response. All the more so after Assad has watched the debate in Western capitals over even limited bombing, including the defeat in the British Parliament.

A pinprick attack portends more months or years of civil war, leading to an eventual Assad-Iran victory or perhaps a divided country. The jihadist groups, now a minority in the opposition, will grow as the war drags on and they focus on holding territory rather than fighting the regime.

We’d support a larger military intervention aimed at regime change. Short of that, any U.S. military strike should focus on doing enough damage to the Syrian air force so the rebels can change the regime themselves.


July 11, 2013

Wall Street Journal on July 10, 2013, reported that hostile foreign states are stepping up their cyberattacks on the U.K., British lawmakers said in a report that underscores a growing alarm within advanced economies about the threat posed by potential enemies online.

The U.K. parliament’s intelligence and security committee, which oversees Britain’s intelligence services, said in its annual report that the threat from cyberattacks “is at its highest level ever” and is expected to increase, according to evidence it received from the U.K.’s Government Communications Headquarters, or GHCQ, which monitors such attacks.

Foreign states are increasingly using professional hackers to break into computer systems and steal secrets from government departments and businesses, the committee said in a 57-page report, parts of which were redacted as too sensitive to publish.

“The threat the U.K. is facing from cyberattacks is disturbing in its scale and complexity. The theft of intellectual property, personal details and classified information causes significant harm, both financial and nonfinancial. It is incumbent on everyone—individuals, companies and the government—to take responsibility for their own cybersecurity,” the committee said.

The committee didn’t say which foreign states the security services believe are targeting the U.K. but its report noted that Russia and China are alleged to be involved in cyberattacks…


The report highlights unease in nations such as the U.K. over their potential vulnerability to sophisticated hackers.

In the U.S., intelligence officials have also warned of the rising threat of cyberattacks to national and economic security and compared their concern more explicitly than they have done previously to the dangers posed by global terrorism.

The U.K. committee’s report said that in 2012 more than 200 email accounts of British government workers in 30 departments were targeted in an attempt by unidentified hackers to steal unspecified confidential information. Government departments were also targeted…


In one assault, cyber attackers stole data from Britain’s Ministry of Defence, the report said, without providing any further details.

One area of major concern in both the U.K. and the U.S. is the financial system.


In the U.K., Andrew Haldane, the Bank of England’s executive director for financial stability, said in recent but unrelated evidence to parliament that cyberattacks risked disrupting the stability of the financial system. U.S. regulators have warned banks to better arm themselves against hackers and other online criminals.


In a sign of how seriously government ministers take the cyberthreat, Mr. Osborne said another £210 million ($312 million) of public money would be added to the £650 million budget for Britain’s cybersecurity program in 2015.