04 MAR 16 – Executive Intelligence Summary

EXECUTIVE INTELLIGENCE SUMMARY – 04 MAR 16

The National PMESII section is a break down of national- and regional-level Political, Military, Economic, Social, Infrastructure, and Information events and trends.  Appendix: Collection of acronyms and definitions used.

[wcm_nonmember] In this EXSUM…

• Massive Shortfall in Cybersecurity Professionals Will Add to USG Woes
• Hezbollah Sets Up Base in Cuba
  
• Bill Gross:  Summer is Over, Winter is Here
• Gangster Warlords: ‘Robin Hood’ Gangs a Domestic Threat
• Analysts: Oil Prices Likely to Stay Low
• U.S. Cyber Command Tests Capabilities Against Islamic State

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National PMESII:

Political/Government: Massive Shortfall in CyberSecurity Professionals Will Add to USG Woes

Last month, President Obama announced in the Wall Street Journal his plan to increase cybersecurity spending to $19bn  (also reported in last week’s EXSUM).  That price tag made big news and gave the appearance that the Obama Administration was serious about cybersecurity (AC: remember that he’s been president for seven years and has presided over the worst cybersecurity breaches in history), but more often overlooked was the continuing massive shortfall of cybersecurity professionals who want to work for the U.S. Government (USG).

In efforts to solve this problem, Obama Administration cybersecurity officials are establishing a Center of Excellence and national testing lab that will work to improve cyber security for U.S. companies.  We’ve also reported that DHS officials have taken up residence in an office in Silicon Valley in order to work alongside the tech world, learn from their practices, and recruit them to secure U.S. cyber infrastructure.

(AC: On its face, this may sound like welcomed news; after all, the USG and corporate worlds are going to be working together to strengthen cybersecurity.  Working with corporate cybersecurity experts will no doubt improve USG officials’ understanding of cutting-edge technology and best practices.  Whether or not it will significantly improve security is another matter.

A major problem facing the USG is the continuing shortfall in cybersecurity professionals working in cybersecurity programs.  All the technology in the world does little good without eyes and brains manning the controls.  And this problem is not new: the USG has always had this problem.  Talented recruits would much rather work for Google, Amazon, or other Silicon Valley companies, especially where career development is concerned.  Another lingering problem is that cybersecurity jobs in the USG are often not competitive with the private sector.  Overall, this new Obama Administration program is not likely to significantly improve cybersecurity of the USG.

But the greatest potential problem I see is the increased opportunity to for private enterprises to collaborate with police state and surveillance state activities as the lines between public and private are blurred.  Take, for example, Google, AT&T, Verizon, Facebook and other major companies’ cooperation with NSA under the PATRIOT Act.  Should an instance arrive where a new or updated PATRIOT Act is passed by Congress, or conditions whereby tech companies will volunteer, or can be compelled, to cooperate with police state activities, those relationships will already exist between tech companies and their USG counterparts.)

Military/Security/Defense: Hezbollah Sets Up Base in Cuba

One of the greatest discoveries from the Clinton private email server fallout is that Sid Blumenthal, a former Hillary Clinton aid, runs a private intelligence network that aided Clinton while she was at the State Department.  One of Blumenthal’s dispatches notes that Iranian-backed terror group Hezbollah has likely set up a base in Cuba.

(AC: I’ve been sitting on a report entitled, A Survey of the Iranian Terror Threat to the U.S., that I’ll publish next week.  Until then, understand that Hezbollah is the world’s foremost state-sponsored terror group and they have quite a history operating in both the U.S. and throughout Latin America.  In short, Hezbollah doesn’t pose a terror threat to the U.S. unless a conflict breaks out involving Iran.  In a case where Iran experiences threats to its sovereignty, then we can expect Hezbollah to target the U.S. 

The greatest current threat posed to the U.S. by Hezbollah is a counterintelligence threat, as they’re able to collect intelligence information on sensitive facilities, allowing Iran to maintain a target deck of U.S. interests at home and abroad.  Activity and expansion throughout Latin America, and now Cuba, should be concerning, especially if reports are true that Hezbollah is establishing ties with Mexican drug cartels.  More on that next week.

Finally, in a world where the USG is establishing a relationship with Cuba, it could be that the Obama Administration sees Cuba as a win/loss proposition in a future conflict.  Economic ties with Cuba would make it more difficult for nations like China or Russia to have unfettered influence with the Castro regime.)

Economic/Financial:  Bill Gross:  Summer is Over, Winter is Here

Bill Gross ran PIMCO, which at one time was the world’s largest bond fund, and he’s known as the “Bond King”.  In his latest letter to investors at Janus Capital Group, Gross points out vulnerabilities of the finance-based economy, including increasing risks to insurance companies.  Insurers like the Met, the PRU, and Hartford depend on future market returns in order to pay for insurance claims.  As threats to the market and those future returns increase, they won’t be able to cover insurance payments as easily as desired, Gross says.  Pensions are suffering the same consequences because lower returns on bonds and mutual funds, in addition to negative interest rates, mean more difficulty paying a growing number of pensioners.

Continuing on with his monetary outlook:

“Noted economists such as Larry Summers; respected journalists such as the FT’s Gillian Tett, central bankers such as Mario Draghi – all seem suddenly concerned that 500 Euro or 10,000 Yen Notes are facilitating drug dealers and terrorists (which they are). But what’s an economist/central banker doing opining on law enforcement? It appears that the one remaining escape hatch for ordinary citizens is being closed. Money in a mattress will heretofore be associated with drugs/terror. The cashless society which appears over the horizon may come sooner than the demise of the penny!”

(AC: Bill Gross has added his name among many of those who are critical of the central bankers and their pursuit of “fixing” economies at great risk of destroying them.  Considering the internationalist view of many of these bankers, it should be no surprise that their objective is within sight.  Tightening the noose of financial freedom while consolidating financial and economic power should be a wake up call for all Americans who value freedom.  My guess is that these plays have less to do with concerns over the interim (failing economies) and more to do with a long-term outlook; specifically preparing for a one world financial system where individual nations lose sovereignty over their own money supply, in favor of centralized control.)

Social/Demographic: Gangster Warlords: ‘Robin Hood’ Gangs a Domestic Threat

In the book, Gangster Warlords: Drug Dollars, Killing Fields, and the New Politics of Latin America, author Ioan Grillo describes one reason why gangster warlords have grown so powerful in the favelas of Brazil: they pay for local infrastructure and public services.

(AC: In a worst case scenario, the rise of warlordism, outside of the regime’s current monopoly, is entirely a possibility.  In fact, we’re already seeing this in urban areas where police no longer patrol and in communities where street and drug gangs are effectively local governance.

The development of a ‘Robin Hood’ brand, as we’ve seen with socialist Bernie Sanders, is eminently popular among certain demographics.  Never mind that the traditional Robin Hood stole from the government and gave to the peasants — in a SHTF scenario where local gangs begin adopting and branding themselves as Robin Hoods, communities will have an especially significant, perhaps existential, problem.  Warlordism arises out of poor governance.  In fact, all insurgencies begin out of poor governance or non/under representation of a class of people, be it among cultural, religious, or ethnic lines.  If governments find themselves fighting an insurgency, those governments are effectively being outgoverned.

From an intelligence perspective, identifying ‘Robin Hood’ brands among local gangs should be a top priority for community security groups, especially post-SHTF.  Navigating gang threats is bad enough, but those efforts will be made to be doubly difficult as long as a local gang or warlord enjoy significant support among community members.)

Infrastructure/Energy: Analysts: Oil Prices Likely to Stay Low

In the past two years, oil prices have fallen 70%, straining petrol-based economies and scaring investors worldwide.  The drop in oil prices is also shuddering U.S. oil: according to Baker Hughes, there are 400 active oil-drilling rigs in the U.S., which is down from 986 last year.  Squeezed by falling prices, energy companies have focused on operating rigs fewer rigs more efficiently, saving money and overall production in the long run.  Should oil prices rise, energy companies are expected to resume increased output.

(AC: Still, many analysts are not forecasting a sharp rise in oil prices anytime soon, barring a geopolitical conflict in the Middle East that threatens to send oil prices to infinity and beyond.  Several analysts have noted that falling oil prices are a boon for the U.S. and its allies, while low prices hurt major oil exporting nations, many of whom have an adversarial relationship with the U.S.)

Information Systems/Surveillance/Communications: U.S. Cyber Command Tests Capabilities Against Islamic State

On Monday, the Pentagon announced that major cyber operations were underway against the Islamic State (IS).  These cyber attacks are targeting IS command, control and communications, threatening IS operations in the region.

(AC: Just like Russian operations in Syria was a test of its military, so is this a test for the U.S. Cyber Command.  We’ll track U.S. cyber operations reported in open sources and report on the known effects and successes of the operation against IS.  This should be a good indicator of Cyber Command’s potential in future conflicts with Russia and China.)

Appendix:

AC: Analyst Comment; an opinion, explanation or clarification

DHS: Department of Homeland Security

EXSUM: Executive Intelligence Summary

IS: Islamic State

OSINT: Open Source Intelligence

USG: United States Government

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