I’ve been trying to work on this post for ages, but never seem to get it finished. The more I think about it, the more tangents I head in, so here’s a start anyway. Maybe you can add a comment to the thread.
When we, Joe Citizen think of warfare, the common picture is either soldiers, tanks and planes, or more recently terrorist attacks. Information warfare is not a topic that we think of very often.
Of course using media such as radio, print and TV have been used for decades to provide disinformation, but now that we have the Internet, there is potential for a new front that could cripple economies and cause massive disruption to life as we know it.
Periodically there are major EFTPOS failures, which can happen at the worst possible times. For example in 2005 the EFTPOS network in New Zealand broke down for 2 hours on 23rd December. The estimate was that around half a million transactions were lost on one of the busiest days for retailers in the year. Millions of dollars in transactions were lost because people don’t really carry cash any more.
In November last year Brazil and some of Venezuela lost their power. Nine of Brazil’s states were out of power, representing millions of people. Whilst many complained they couldn’t watch their favorite soap opera, traffic lights were not working, trains weren’t running and parts of the country pretty much ground to a halt.
If a country or a terrorist organisation wanted to cause chaos or in some way to a country or city in the modern world, it would be incredibly easy. In Holland a guy called Max Cornelisse has created chaos and recorded it on YouTube to show how easy it is to disrupt services we take for granted. Amongst other things he has meddled with electronic signs on freeways, opened and closed bridges over canals from his PDA, sent people running from one platform to another by controlling automated PA messages at railway stations and in this YouTube Video he controlled the autoprompter at a Dutch TV station causing confusion to the newsreaders on live TV. Unfortunately it is in Dutch, but you’ll get the idea.
This is just a guy having a little fun, but what could you do if you seriously wanted to disrupt a country or city. What chaos would you create simply by shutting down the Internet. How would your business function without the Internet? How would your community function without the Internet? Imagine no email, no Voice over IP, no web browsing, no IM, no Facebook or Twitter? No online share trading. No banking, no EFTPOS, no ATM’s and who carries cash?
That’s just for starters. I wonder how long it would take for a major city, like New York, London or Amsterdam to fall into chaos? What would happen after a day, a week, even longer?
Last week there was a story on NPR about cyber terrorism. It quoted USA Director of National Intelligence, Dennis Blaire saying that “Every single day, Blair said, sensitive information is “stolen from both government and private sector networks” as criminals become increasingly more sophisticated.”
Interestingly on 16 February 2010 an event will take place in a simulated Whitehouse Situation Room which is scripted to emulate a cyber terrorist attack. Those taking part will include former Director of National Intelligence John Negroponter and former Homeland Security Advisor Fran Townsend, who will have to work out how to deal with it as it plays out.
This has happened shortly “after the House overwhelmingly passed The Cybersecurity Enhancement Act. Something that gives the Obama administration the power to switch off the Internet,” according to Techeye. For more on the Act, check here.
Just as a final thought for now. If you know how to defend against an attack, you also know how to initiate one. I’m not for a moment suggesting any Western power would do that, but given the right circumstances…….
I am very happy to be living in New Zealand in that respect. Although we have allowed ourselves to become very dependant on our friends and allies, not even able to fully feed ourselves if we bacame isolated.
On Page 5 of this morning’s New Zealand Herald I read a story with the headline Stick to guns on fee, banks told. Now I’m the first to stand up and say I don’t understand the banking economy as well as the bankers and the politicians, the educators and maybe even Liam Dann, who says we are all behaving like whingers. No I have bumped into Liam many times over the years and the experiences have all been good, but in my mind something isn’t gelling for me. Maybe he or some others can explain where my thinking is going wrong.
First, we are in a global economic crisis and times are tough all over. I totally agree with Liam’s assertion that when I signed for a fixed rate, I signed a contract which is a legal document saying that I would pay the rate for the period on the contract and it would cost me to break it. The banks are saying that they can’t afford to subsidise the cost, but they quickly gobbled up the guarantees provided by the government to help move the economy.
Now I said at the start, that I don’t understand exactly how the banks work. I know that when I borrowed my $165,000 the National Bank didn’t rush out and borrow that sum, they would have signed contracts for millions at really good rates and my loan would have been part of a bundle which allowed them to hedge for a profit. Now I understand that the Official Cash Rate is a major influencer in mortgage and deposit rates, but a large part of the borrowing by the banks is in other countries where the rates are much lower than ours.
As to becoming whingers, I’d like to ask Liam if he thought (irrespective of the contract that was signed) we were also whingers when we saw the gap increasing between lowering oil prices and the retail price of petrol. It was public pressure that almost overnight reduced the retail price of petrol, people whinging that they thought the profits weren’t fair.
When I took out a new fixed loan of $165,000 I based my decision on the advice of bank staff, even though they were careful to say that I shouldn’t take their information as an official position by the bank, the decision had to be totally mine. But the thing is they did give me advice, and I do accept that no one saw the crash coming. On the other hand the banks also said after the problems in 1987 that they would tighten up their lending criteria, which they have obviously loosened as time went on.
Businesses have clout. In my world of business, contracts get broken when companies have the power to break them. They sign legal contracts all the time, but if they decide that their supplier is making too much profit, the implied threats come out, saying that they have a choice and even though they have a contract, often it is only as good as the money that a business wants to throw at it to defend it. This is something I do know about it. When you try to defend your contract, you use meet and discuss the situation explaining both parties points of view and try to find a common ground because you need that business relationship. This is called negotiation in my book, although some people might call it whinging.
Now I’m all for businesses making profit, it is essential for their survival and I want my bank to survive, but I want them to be fair too. The NZ Herald themselves reported that while ANZ – NATIONAL took a huge drop in profit, they still made almost $1 billion after tax. That means after all expenses were paid. The NZ Herald also reported TODAY that BNZ’s profit is up 15% on last year, so forgive me if I don’t stop and give them a minute’s silence in respect of their tough times.
So I’m trying to figure out why Liam has this perspective. Here are some things I have heard about or personally experienced about contracts in the last several years: before they
A company agrees to buy products manufactured in New Zealand at an agreed fee for a contracted period of time and a contracted price and volume. The buyer then discovers they can buy equivalent product from a Chinese manufacturer and despite the contract and the money the Kiwi manufacturer has invested in staff and plant, breaks the contract and says I can’t continue this deal because the prices were too dear. Never mind that they were already making an extremely healthy retail profit prior to breaking the contrct.
An overseas company buys a NZ company complete with its staff and operations and agrees to maintain all the contracts. They then go through the payroll on a spreadsheet and decree that all staff earning more than $X will be made redundant, but can reapply for new positions where the specification might be modified by 5% at a 3rd of what they used to do, irresepctive of their contribution. The good news for me is that they kept the people who weren’t contributing and areas where they made staff redundant and replaced them with people who were prepared to work for way less, reduced profit and revenue by in one case almost 80%. I think that strategy was illegal, but who wants to burn bridges or be seen as a trouble maker or a whinger.
I’m sure if you are reading this you know of similar situations where businesses break contracts with other businesses all the time. They get away with it because one business has more power than the other and the losing party either can’t afford the cost or the consequences of fighting for what is right. If you know of cases like this, or indeed if you think I am wrong, please comment on this blog. As long as it isn’t spam or blatant advertising, I will publish your comment.
So here’s the thing. Banks used to be community organisations. You used to be able to walk into the bank and talk to the Bank Manager. They would know you buy name. They would give you advice and show an interest in you. They introduced technology that people said would turn them into machines, and in many cases it did, but the machines were of benefit to the consumer and business, such as EFTPOS (which I helped in a tiny way to introduce), ATM’s, Internet Banking and more. These investments saved them and their customers in time and money, but particularly made the banks more profitable by reducing overheads and staff.
When I first wanted to borrow my current fixed loan from my bank, with whom I had banked for almost 25 years, I actually got a better deal through Mike Pero Mortgages than I could from the bank directly. How’s that for 25 years of loyalty? I had to get a broker to get me a reasonable deal from my own bank!
So I’ve had my whinge Liam. It seems it ‘s ok for businesses to break contracts with each other and to fight for them, but it’s whinging if a consumer, a customer for many years of a bank that is making big fat profits out of their dealings with them, and gets a helping hand from the government which in many cases is as a consequence of imprudent lending, which after 1987 they said they wouldn’t do to expect a little help as well, well I’ll accept the title of whinger.
Just as a footnote, my local grocer is going back to India to look after his elderly parents after running his store here for 24 years. For all of that time, he has shown a real personal interest in every customer, he knows most of them by name. He has helped many of them out if they needed something and didn’t have the cash on them. I won’t go through all the little things he did for local people, but here’s the thing. The supermarket is much cheaper and for many people closer, but they still buy from him and he is selling a highly profitable business. Profitable not because it is a Four Square, or because of his location, but because he cares, because he is a person doing business with people and we as his customers want to do business with him.
If the National Bank doesn’t look after me, perhaps go halves on the contract difference or something that shows that they care about my business, my family and my future business (because I intend not only to be around for a long while, if the creek don’t rise, I won’t be whinging, I will be moving with my feet.
Now I am not wealthy, I live in a very average neighbourhood, far from affluent. Having been made redundant twice and suffered badly as a consequence and having little faith in the government to give me any sort of lifestyle when I retire I am being prudent. I have a small savings account (which has helped my kids from time to time with studies, with medical costs, holidays and other interests), I have a modest term deposit, suffient to cover 2-3 months of income should I be so unfortunate as to be made redundant again as is happening to many people right now. I have a mortgage on my home and a mortgage on my rental property which breaks even without paying a cent off the capital (and of course in recent times means that it is worth less than the loan (but this is for the long haul and it will come right.
Sorry, if I’m rambling, but this post is personal. If the National Bank doesn’t come to the party, I will go back to Mike Pero Mortgages who have looked after me so well in past. I will ask them to find me a new bank that will take over my term deposit, my checking accounts, my 2 mortgages, my Internet Banking, my EFTPOS account, my credit cards and will tell everyone who will listen. Liam, mate, I’m not being a whinger in my book, I believe that people do business with people. We have a choice and I will be looking very closely to see if one of the banks realises that a short term sacrifice will amply pay great dividends in the long run. I suspect that the bank that does this and continues to recognise that their profit comes from their customers will grow and thrive while the others wonder what happened.
Liam, this is starting to sound like I am having a go at you. Frankly I was annoyed to read your column in the Herald today. Factually you are on solid ground, a contract is a legal and binding document. But consumers do have power and if they don’t use it, the corporates or anyone that can will walk right over them. Over recent years Kiwis became so PC (politically correct) that they let everyone walk over them. They thought people like Americans and Australians were rude if they complained about a dirty coffee cup in a cafe. The contract was for coffee, there was never discussion over the cleanliness of the cup.That made them whingers. Now more and more people are realising that it not just about the contract, it is about standing up for what is fair, ethical, moral and just. The laws of economics are changing and people have a choice.
If anyone is still reading this soap box and agree or don’t with me, please leave a comment and tell me what you think. I would also appreciate you telling other people about this blog if you think it is worthy. Let’s remind the banks and everyone else that those who recognise and respect their customers will in future grow and thrive, those that don’t might be sitting at home reading reading the situations vacant and wondering what happened and thinking how unfair life is.
While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.