Risk Management Links of the Day … Featuring Android Phishing

android phising

  • A “phisher” looking to gain access to people’s banking details managed to upload a malicious app to the app store for Google’s Android smart phone (which is Google’s answer to the iPhone). And while it was quickly removed once discovered, this brings into question whether or not Google needs to be more stringent on the apps it allows into the Android Marketplace. “The rogue Android application posed as a legitimate banking applet, but was actually designed to trick marks into handing over bank login details to fraudsters, an alert by credit union First Tech warns. The credit union, which said it wasn’t targeted by the attack, doesn’t even have an app for Android as yet.” And the macro-level threat here is, of course, the vulnerability of smart phones, which are increasingly becoming indispensable web portals for millions. Many expect similar attacks to rise in 2010.
  • In a candid Wall Street Journal interview this weekend, Hank Greenberg questioned the terms of the AIG bailout and instructed journalists to start looking deeper into Goldman Sachs’ actions before the financial collapse. “There’s too much smoke, too many smart people asking questions that deserve an answer. I would hope that investigative reporters do the job they love to do and bring out the truth. I would hope that Congress would then say we must do something about this in all fairness. The American people should know about this and then bring about the changes necessary to avoid the total destruction of a great company that was the pride of America in the insurance industry.” Hank would seemingly be the first in line among AIG shareholders to file a class-action lawsuit to recoup all the losses that have (in his view, unfairly) occurred since the Fall of 2008, but — for now at least — he isn’t going that far. He has, however, presented the Fed with a plan in which AIG’s “$112 billion loan [would be] stretched out to, say, 20 years and the interest rate slashed to something closer to the government’s own cost of borrowing.” Good luck with that.
  • The Basel Committe on Banking Supervision has identified several areas that it must address in more depth, including coming up with more concrete principles to help replace International Accounting Standard (IAS) 39. And that might prove contentious. “This could put regulators on a collision course with the International Accounting Standards Board (IASB), which published proposals for consultation on November 5 to replace the incurred loss model with an expected loss model as part of the overhaul of IAS 39.” You know what that means? ACCOUNTING FIGHT.
  • A man who was pretending to be a rock concert promoter was indicted for running a Ponzi scheme. “According to the indictment, [Miko Dion] Wady operated and had an ownership interest in various business enterprises that purportedly were engaged in the business of promoting concerts or tours of well known entertainers and artists.”The indictment alleges that Wady and others misled victim investors into believing that Wady entered into performance contracts and other business arrangements with nationally and internationally known entertainers, arranged performance venues throughout the world, and greatly profited by putting on these concert or tour events. The indictment alleges that from 2004 through 2007, Wady claimed to have promoted concerts for The Rolling Stones, U2, Barbara Streisand, Faith Hill, Tim McGraw, Mariah Carey, George Strait, Billy Joel, Jamie Foxx, Jimmy Buffet, Mary J. Blige, Pearl Jam, and at least 30 other well known artists and entertainers. Also according to the indictment, during this period, Wady appears to have actually promoted fewer than 10 concerts, all involving only local or lesser known artists.”

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Risk Management Links of the Day … Featuring Security Dogs on Vacation

security dog philadelphia airport

  • Three bomb-sniffing dogs at the Philly International airport failed their recertification tests and have been relieved of duty. While laying off security dogs may sound like overkill, even in the new climate of airline security sensitivity, one expert notes that “these dogs are not ornamental. They are there for a purpose. If the purpose is not being satisfied, that’s a serious issue.” There is a “built-in redundancy” at the airport so other screening methods can be used in the meantime until new dogs can be brought in. As for the dogs who failed … Do they just get to go on vacation and relax playing billiards like the pup above? Nope. It’s back to school for them: “TSA spokesman Greg Soule said the agency could not comment on the status of its dogs. He said, however, that the rigorous nature of yearly certification tests means that some of the nation’s 700 TSA-led dog teams deployed in air, marine and mass transportation systems may not pass and must go through a remedial program.”
  • A scary-to-think-about report was released today from the Sector Risk Research Programme stating that risks that are poorly understood and thus not addressed properly by the commercial insurance sector could “prompt a new phase of the financial crisis.” More specifically, the report states: “Parallels can be drawn between large property and casualty insurance institutions today lacking the ability to fully understand changing risk exposures and more publicised past failures of financial institutions to understand risks assumed. While loss impacts naturally lag economic changes by several years, turmoil in commercial insurance is expected as a latter phase of the financial crisis.” Jeez. Let’s hope not. (via Risk & Insurance)
  • The 4th quarter of 2009 set a record for cat bond issuance volume. “More companies have put their toes back in the water after a slow start in 2009,” said Robert Stone, director with the RMS dedicated ILS team, RiskMarkets.
  • This is a little dated at this point, but I read it over my holiday break and was just reminded how much I enjoyed Vanity Fair‘s extensive look at Goldman Sachs. The article breaks down the disconnect between “the way Goldman Sachs sees itself (they’re the smartest) and the way everyone else sees Goldman (they’re the smartest, greediest, and most dangerous).” It seems like the further we get away from September 15, 2008, the more interesting the stories become about what actually happened between Wall Street and Washington during the market meltdown, and Bethany Mclean of Vanity Fair peels back a few more revealing layers of the onion here. They also devised this sweet chart illustrating that “Goldman’s influence is ubiquitous in the highest echelons of global political power.” That sure is a ton of former Goldman employees in a ton of the world’s most influential financial positions.
  • Speaking of political power over the financial system … David Leonhardt is asking “If the Fed Missed This Bubble, Will It See a New One?” in the New York Times. “The fact that Mr. Bernanke and other regulators still have not explained why they failed to recognize the last bubble is the weakest link in the Fed’s push for more power. It raises the question: Why should Congress, or anyone else, have faith that future Fed officials will recognize the next bubble?” Fair question, it would seem.

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Risk Management Links of the Day: 01.05.10


  • Geoengineering in regards to the environment and climate change has increasingly been gaining mainstream interest over the past year after spending most of its days mired in obscurity or outright condemnation. I’ve personally written about it twice in the past few months both in regards to Bill Gates’ discussion on thwarting hurricanes and SuperFreakonomics‘ assertion that widespread geoengineering to slow climate change is a good solution. Still, the concept remains widely misunderstood and obviously has both positive and worrisome components. To help everyone become better informed about the concept, the MIT Technology Review has taken an exhaustive look at the possibilities of society geoengineering our way out of climate change.
  • Rick Nason teaches an ERM class and while skeptical of the practicality of teaching this within an MBA curriculum, he has a question for you: “ERM has created a lot of excitement, but very few successful examples. Explain why you believe ERM has so few successful implementations.” Head over there to answer. And show your work. (via RiskCzar)
  • Les Krantz breaks down the 200 best and worst jobs in the U.S. in his “Jobs Rated Almanac.” And you know what’s number one? Actuary. “Actuaries, who evaluate the financial impact of risk on an organization, fared best because they work during standard business hours and in favorable conditions — indoors and in places free of toxic fumes or loud noise — as opposed to those jobs toward the bottom of the list such as iron worker, dairy farmer and the biggest loser from last year’s study, lumberjack.” Google “Norm MacDonald,” “Weekend Update” and “worst job” to find out what ranked dead last this year — again.

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Risk Management Links of the Day: 12.28.09


  • Five U.S. mortgage insurance companies are downgraded. You may have seen this coming, but Standard & Poor’s Rating Services downgraded five mortgage insurance groups, along with their core and dependent foreign subsidiaries. The article stated that “a backlog in foreclosures due to high unemployment and the economic crisis has slowed claims payments, but extended loses over a longer period than initially expected.”
  • Is the dollar headed for a rebound? According to today’s BusinessWeek article citing Marc Faber’s Gloom Boom & Doom newsletter, it is. Faber claims the dollar “may appreciate another five to 10% against the euro in the ‘near term’ as bearish betting on the greenback becomes too crowded.” The report stated that the dollar has gained 4.2% to $1.4396 per euro this month.
  • A beef recall has been initiated in six states. The U.S. Agriculture Department traced the E. coli bacteria in the meat to National Steak and Poultry, an Oklahoma-based meat packing company. The company then began a voluntary recall of 248,000 pounds of beef products in Colorado, Iowa, Kansas, Michigan, South Dakota and Washington state.
  • The U.S. is now more tsunami-ready than ever before. According to the Insurance Information Institute, since the devastating Indonesian tsunami in 2004, the U.S. has “significantly expanded its tsunami detection capabilities and broadened municipal awareness of this natural disaster.”

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