BusinessWeek's April 21, 2008 Issue: The New E-spionage Threat

NEW YORK, April 11 /PRNewswire/ -- THIS WEEK: * Cover Story: The New E-spionage Threat * The Spending Mirage * Bailing Out of Bear * You've Been Pre-Rejected For these stories and more, visit www.BusinessWeek.com...


NEW YORK, April 11 /PRNewswire/ -- THIS WEEK: * Cover Story: The New E-spionage Threat * The Spending Mirage * Bailing Out of Bear * You've Been Pre-Rejected For these stories and more, visit www.BusinessWeek.com (Photo: http://www.newscom.com/cgi-bin/prnh/20080411/NYF011 ) COVER STORY: THE NEW E-SPIONAGE THREAT By Brian Grow, Keith Epstein, and Chi-Chu Tschang

The U.S. government, and its sprawl of defense contractors, have been the victims of an unprecedented rash of cyber attacks over the last two years, say current and former U.S. government officials. "It's espionage on a massive scale," says Paul B. Kurtz , a former high-ranking national security official. Government agencies reported 12,986 cyber security incidents to the U.S. Homeland Security Dept. last fiscal year, triple the number from two years earlier. Incursions on the military's networks were up 55% last year, says Lieutenant General Charles E. Croom , head of the Pentagon's Joint Task Force for Global Network Operations. When the deluge began in 2006, officials scurried to come up with software "patches," "wraps," and other bits of triage. The effort got serious last summer when top military brass discreetly summoned the chief executives or their representatives from the 20 largest U.S. defense contractors to the Pentagon for a "threat briefing." BusinessWeek has learned the U.S. government has launched a classified operation called Byzantine Foothold to detect, track, and disarm intrusions on the government's most critical networks. And President George W. Bush on Jan. 8 quietly signed an order known as the Cyber Initiative to overhaul U.S. cyber defenses, at an eventual cost in the tens of billions of dollars, and establishing 12 distinct goals, according to people briefed on its contents. http://www.businessweek.com/magazine/content/08_16/b4080031217154.htm?campaign _id=pr_newswire

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THE SPENDING MIRAGE

By Michael Mandel

If you are an investor, this is the moment in the business cycle when fortunes can be won or lost. The U.S. economy is in recession, for the fourth time in the past quarter century. Will the stock market soon take off with a whoosh, as it did during the downturns of 1981-82 and 1990-91? Or will stocks continue to slump, like they did during the 2001 recession and beyond? Forecasting the stock market is a fool's game -- but there are grounds to believe there's another drop in the market yet to come. The reason: a broad decline in consumer spending, which so far has been masked by a quirk in the government's statistics. Combine that with a rapidly unraveling job market, high energy prices, and the continuing credit crunch, and you have the recipe for a drop in consumer stocks. A big decline there could take the rest of the market down with it. http://www.businessweek.com/magazine/content/08_16/b4080000602263.htm?campaign _id=pr_newswire

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BAILING OUT OF BEAR

By Michael Orey

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