Bad Penny » Economics

On hackers, maturity, and the international market

Ian Gorrie — Thu, 06 Aug 2009 21:10:43 +0000

There has been several published works on the what the media calls hackers, the hacker underground, the information security industry, and the technorati class in general lately. Here are a few:

Phrack #63 section 13 The death of the underground
Zero For 0wned The “Industry check” section
H Security All Around My (Black) Hat
CNN Technology Hanging with hackers can make you paranoid

In order of relevance, naturally.

The topic of the increasingly organized crime aspects to the commons of technical adversaries and quality of technical achievement has been an ongoing and frequent discussion piece with nearly everyone clued that I know in the industry.

The truth of this is debatable, but the facts are not. The average technical practitioner, the opposite of the paper credentialed individual, is getting older. Skill sets, in general, are getting shallower.

My take on this is that the level of interest from the industry at large has shifted from one of the hacker mindset of wanting to know how things work and looking for elegant solutions to complicated problems to one of functionality and bad practice engineering.

Functionality and not structural integrity:

Why debug a system or application when you can reboot?
Why use hard proven technology when you can make a Web 2.0 AJAX application that has no native trust model?

Some of the heavy handed moves driven by the DMCA pose a question. What is gained by legislation effectively outlawing security research and reverse engineering by imposing enormous civil and criminal penalties?

I say that the answer is nearly none at all.

Banning of cloning research merely relocated the innovation centers overseas. It didn’t stop the development of that line of research, it just assured that those in the United States would not be a part of it.

Instead of reacting to problems by fixing the cause of the problems, it seems many corporate entities, and their friends in Washington, respond by lobbying for legislation outlawing practices that threaten their business as their answers and writing fraud off as the cost of doing business.

This is where your increased credit card fees are going as fraud dollars are funneled overseas and identity theft runs rampant.

Instead of focusing on hard problems that need elegant solutions, we’re making examples of kids who modify consoles. The laws of the United States have limited influence to those who live outside its borders.

Where are we left when the innovators are Russian criminals and it’s left to academics to study their malware? Are we just left to study the malware left in crime scenes and the trash after their parties?

Let’s look at a real world example. Germany.

From Phenoelit’s .de webpage:

In June 2007, the German parliament passed changes to the computer crime laws, including §202c StGB, which states (unapproved translation):
Whoever prepares a crime according to §202a or §202b and who creates, obtains or provides access to, sells, yields, distributes or otherwise allows access to

passwords or other access codes, that allow access to data or

computer programs whose aim is to commit a crime

will be punished with up to one year jail or a fine.
Additionally, this new section is interwoven with other laws, including the ones covering terrorism. The current interpretation includes the acceptance of others committing a crime using your (or our) material as violation of §202c.

What did they, and THC, and others do? They left Germany. The JAP project was undermined. Tools, content, and discussion were sent beyond their borders. Oversight of them went along with them making sure that only seasoned criminals and not security professionals would work with them in Germany. I’ll look forward to the future release of case studies of breach disclosure and its relation to this legislation over time as several consultancies do not want to take their chances in providing penetration test work product there.

I’m really disappointed that a wake-up call has not gone out. The problem here is not full disclosure, free bugs, or video game console mod chips. It’s that we’re addressing the easy symptoms of a difficult cure.

Channeling this passion and genius to solve problems instead of outlawing and leaving it to criminals is ideal. I’m not going to try to wage the Fair Use war that Lessig and Change Congress are engaged in fighting, but I am advocating that we approach the right problem and not just attempt to wish it away.

Jail penalties larger than murder for jailbreaking iPhones or chipping an xbox strikes me as ineffective. Let’s get real about what is in the best interest of society here. I submit to you that the present course is not it.

Real Estate

Ian Gorrie — Mon, 28 Jul 2008 12:08:41 +0000

Since I’m a general know-it-all, and like unlike most people do not have problems managing finances, people ask me about real estate issues a lot.

If they have a decent attention span and live in Seattle, I point them to the Seattle Bubble Blog. It does a great job of debunking a lot of the fluff that many people with a vested interest in selling something commonly tell prospective clients.

Without talking about market conditions just yet, let me give you my brief outline of why buying real estate might be an ok idea.

First, you the reader, should know that if you live in a nice city, you are likely better off renting. This is a fact unless you live someplace crazy-rural or you make way more money than most. You are better off just saving and investing your money than getting tied up in the never ending cashfest that is home ownership. Here is a New York Times calculator to play with that basically proves this if you use it correctly. Give it a try knowing that historical appreciation rates for property is under 5% and for the last two years it has been in negative numbers.

If you’re one of the few single or combined incomes that could use a large enough deduction from your income taxes and get a little bit of investment from it, lucky you. If you’re not sure, think about the following:

The interest on your mortgage is deductible
The added property taxes are not
Neither are the costs for upkeep. (Note that repairs are not tax deductible, but improvements to a home are. This is why most people who can afford it add improvements instead of just remodeling.)

Basically the money you save by not paying rent needs to be greater than the total amount you pay out in closing costs, taxes, interest, and the amount “saved” by not giving it to the taxman. This is not most people. Most people are told that housing is a great investment, so they buy it anyway. This is part of why values of the housing market are falling like a stone right now.

So you’ve run the numbers. You understand the realities of taxes and financing. You’re considering that housing is not an investment, but a luxury that may possibly yield a profit in the end if you get lucky. How do you get the best deal? After having personally owned a couple of different residences and been involved in the transactions of several others, I have some suggestion that you may find useful.

1) Ditch your emotions and make the best deal you can.

Most buyers make impulse buys because a kitchen is pretty, the bathrooms have been remodeled, or there is a nice view. Don’t be that guy. Be critical and see it for what it is. It is a business decision. Make the best deal possible for you. This means buying the most value for the least of your money that you can. The only person with a vested interest in this is you.

Your real estate professional, if you are working with one, is motivated by the sale and the possibility of referral and repeat business. They have other commitments. They only have so much time to give you. Do not make the mistake of thinking that they will find you the best deal. They only want to find you a deal that you are happy with so that they can get paid. Romanticizing ideals past these simple motives does you no good.

Look at a lot of options yourself. Get a sense of what things are worth by yourself. Know how much you are willing to spend and your financial limitations.

2) Get the right tools for the job

If you don’t know what you’re doing, you’ll likely need to work through a full service professional to make sure you don’t get completely hosed. If you’re done this dance before, why pay for it? You will understand:

The bidding process and what conditions can be put into an offer
Inspection and conditions for sale
Closing details and games people will play with you
What can go wrong
The idiosyncrasies of the area

If you can handle these things, think about using a low cost broker or a tool like Redfin. The buyer’s agent commission is usually something like 3% of the value of the property. It can be more of a builder offers incentives because of their greater profit margin they have available to make deals, or less if the seller has stipulated so in the MLS listing. Sellers of moderately priced homes usually offer 3% so that buyers agents will bring prospective buyers to see the property. If the seller was offering 2.5%, the thinking is that they will get less interest because the agent wants their cash. It is perfectly sensible and is one of the many details of the experience that can be misunderstood.

If you use a site like Redfin, they capture about 1% of the deal and issue you a 2% rebate.

So, tools and resources that should be examined include:

Brokerage sites such as Redfin
Appraisal sites such as Zillow, Eppraisal, and Cyberhomes
Foreclosure information sites if you want to take the added risks involved. These are usually funded by a monthly membership fee.

3) Spare no ones feelings

This is not a relationship. You are not dating or paling around with friends. This is a business transaction. Be brutal and fight for your best deal. Make low offers. What you do with your wallet is what a piece of property is worth. It is not your responsibility to fund someone’s retirement or otherwise give them a fat profit. You have enough to worry about without thinking about the goals on the other side of the table. Big money means that the details count for a lot.

4) The details are gold

Always get an inspection by inspectors that work for you. It is worth the money. Look at the tax records when constructing your deal. Try to know as much as possible as information is your friend.

5) Good luck

When you have done all of your homework and come up with a sound strategy for buying in a particular area, get your pre approval from for financier and start making offers. Finding the best deal on financing is also no simple matter and be aware of how referrals and business relationships may have vested interests.

If I’ve pointed you to this write-up after you’ve asked me about “so what’s the deal with buying a house,” let me know if it helped you.

Amazon Kindle Launch

Ian Gorrie — Wed, 21 Nov 2007 14:02:30 +0000

The media blitz over the Kindle is really excessive.

“Kindle: Amazon’s New Wireless Reading Device” (Amazon)

I think it’s great that someone finally found a way for newspapers to preserve their readership, but by getting people to buy a $400 brick with EVDO where they can download books? $10 ebook downloads? I’m curious to see who is going to buy them. Offering free cellular wireless just means that, I suspect, the costs will be tacked on to the related products. I do like the idea of newspaper delivery though. So what does an annual subscription look like with the purchase of this reader which should be obsolete in a couple years? $450? In a couple of years, thinner color versions of these things will be deployed as they are already prototyped in Japanese labs a couple years ago.

Does this mean that this is really just a very expensive kite project to test the winds of the Amazon empire being the Wal-Mart of eBooks?

I admit it. I hate reading pdfs on laptops and computers. I hate it so much that I don’t do it for more than 5 minutes at a time. What did I do about it? I got myself a Sony Reader. The geeks just love ‘em. Reviews: mssv, zdnet, engadget. Actually nearly everyone (except zdnet) is reviewing the old one. I have the new one.

Complete with my info engraved into the face. It’s complementary if you order it from sonystyle.

Really you don’t need to even use the software. You dump pdfs, mp3s, and pictures onto a memory stick or the internal memory and you’re done. It sorts them by itself (or its best guess if they are improperly named) and makes them available to you to read, listen, or view.

Is it a really big deal to plug in a usb cable and drag some pdfs into a folder? I don’t think that it is.

So the Kindle seems overpriced even before you look at its functionality and their ebooks, at ten bucks a pop, are drastically overpriced. Why do you need a keyboard on a book anyway?

Here’s the real thing that slays me. RSS feeds are $1 each on the Kindle.

The Kindle also does not read PDF files.

Wow.

What an amazing service. Good luck with that and your 12 prospective customers. It’s not innovative since Sony has had the same product without wireless out for nearly three years. It’s not cost competitive.

Additional reading:

Sony Reader and Kindle compared.
At least there will be more eBook readers, and that means more eBooks available. Yay.
Why does Bezos look like Gollum in all of his pictures? How much did they spend on all this PR anyway? He was even giggling like a retard on Charlie Rose when I had PBS on for a second today.

ebook, kindle

Grumble

Ian Gorrie — Sun, 04 Nov 2007 03:31:28 +0000

Whenever I try to get a cell phone, it always ends up being a circus.

For instance earlier today I ordered the previously mentioned Nokia N95. I must now reject receiving it because this phone is going to be out in a couple of weeks.

From the product description:

Uses 3.5G wireless technology for easy, convenient Internet browsing
Features wireless LAN technology and Bluetooth^® 2.0 EDR for connectivity
5MP camera offers crisp, professional photographs
2.6-inch display allows easy, strain-free viewing
Includes music player to listen to your favorite tunes
Offers shooting DVD-like quality videos at up to 30 fps
Equipped with FM radio
Optimized for US networks

So basically it’s the same as the other phone with a bigger screen, larger internal memory, and is for sure workable for North American networks.

Man. There really isn’t any good way to get mobile electronic news. I’ve tried the blogs, the forums, and the bad news sites and still you end up looking at inaccurate press releases, scamming resellers who will tell you anything in order to make the sale, and
general confusion.

There must be a better way.

Calendaring without Outlook

Seattle Housing

Ian Gorrie — Sat, 13 Oct 2007 20:31:03 +0000

As a bit more of additional followup to my previous posting, I’ve found some behaviors really interesting around sales, real estate, and financing. Some personalities (or lack thereof if you want to look at it that way) seem to be drawn to the low bar to entry of these markets as it stands currently.

What happened to many of the laid-off pilots after the end of 2001? Many became real estate agents.

How about the sediment from the dot bomb washout? More real estate agents.

Everything was gravy for people selling houses in the last few years due to large margins of profit for sellers and the greed for easy “houses never lose money” investments for buyers. Every housewife or salesman was getting into it to some degree. Every guy with a friend in the finance business was brokering loans.

These days, as everyone knows now, are quite over.

What I find the most interesting about the current age of real estate is that the old days are not going to come back. Not ever. Markets evolve and become more efficient. You need to embrace them or be left behind.

I believe that these high margin sales people will get a bit of a reprieve from online social networking in that they will be able to capitalize on those who are online and use it socially, but not familiar with it enough to find tools to find the most lean deals.

I find it amusing when juvenile mentalities are so commonplace in consumer facing business. I don’t begrudge them for looking for the easy money, but I do for thinking that they are entitled to it. For example, calling other business models sluts.

Hilarious.

Technorati Tags: finance, mortgage, online marketing, real estate, social networking

Even better is people who define themselves, their entire persona and image, as an incarnation of a sales pitch. Since I’m seeing one person in particular all over the place online, I’m going to use him as a specific example. This guy is on every social networking site he can find and posting egotistical diatribe comments on other peoples blogs and speaking at length in public threads in ways that is seemingly inconsistent with his other postings.

Where am I going with this?

My point is that even though people such as Gene commit themselves to substantial amounts of time spent online beating the bushes for clients and making online friends that may generate leads. It is a losing gambit in, I predict, the mid-term. Discount brokers like Redfin (which bears the brunt of the hate) and ZipRealty, to name a couple, are going to collapse the market in short order based on their economic advantage amongst the savvy online demographic. Look at these polls for example. Discount agencies such as Redfin will be under legal attack for a while, which makes sense that some businesses are avoiding this conflict for now. The market steamroller is moving forward and there will be a lot of losers in the real estate market for those who do not position themselves well and soon.

Frankly I love it when people who are fans of Ayn Rand talk about how they are entitled to wage without effort. They also tend to have no personality as it is all tied up into a public image of being a successful sales juggernaut. From the commentary that I mentioned earlier, I think that provided an interesting insight by linking to this article about bias. I understand and appreciate the appeal of self-interest in self-promotion, but not when it is overdone to the point where it becomes your identity. This makes people boring and makes their opinions questionable as it speaks to me of flaws in their judgement.

I spoke to the CEO of CondoCompare this week which, as it appears to me, is looking to be purchased by one of the large national brokerages. He didn’t really seem to appreciate where I was going with my theories about how discount brokerages are going to collapse the market and make it more competitive. Since his business works as a supplement to the current full-service realtor model as an added referral relocation fee, he really isn’t invested in the conflict and doesn’t have to care. I was still a bit surprised that he was not familiar with the market of similar companies working in his space, however.

I am always a bit disappointed when I seem to know more about some market details than people who are heavily invested and business leadership positions.