August 2010 Archives

Vijay Srinivasan, John Stankovic, and Kamin Whitehouse via Bruce Schneier:

Abstract: In this paper, we first present a new privacy leak in residential wireless ubiquitous computing systems, and then we propose guidelines for designing future systems to prevent this problem. We show that we can observe private activities in the home such as cooking, showering, toileting, and sleeping by eavesdropping on the wireless transmissions of sensors in a home, even when all of the transmissions are encrypted. We call this the Fingerprint and Timing-based Snooping (FATS) attack. This attack can already be carried out on millions of homes today, and may become more important as ubiquitous computing environments such as smart homes and assisted living facilities become more prevalent. In this paper, we demonstrate and evaluate the FATS attack on eight different homes containing wireless sensors. We also propose and evaluate a set of privacy preserving design guidelines for future wireless ubiquitous systems and show how these guidelines can be used in a hybrid fashion to prevent against the FATS attack with low implementation costs.
The group was able to infer surprisingly detailed activity information about the residents, including when they were home or away, when they were awake or sleeping, and when they were performing activities such as showering or cooking. They were able to infer all this without any knowledge of the location, semantics, or source identifier of the wireless sensors, while assuming perfect encryption of the data and source identifiers.

A Visit to the US Treasury on Fannie & Freddie

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Bill Gross 185K PDF:

Ninety-five percent of existing mortgage creation over the past 12 months were government guaranteed. The private market was nowhere to be found because they charged too much. It was the cost of private origination and securitization, perhaps more than any other factor, that justified government involvement. Prime, but non-conforming, mortgages (jumbos, insufficient down payments) were being purchased by PIMCO in the hundreds of millions of dollars every week, but at yields of 6, 7, and 8%. If that was the risk/ reward tradeoff, compared to FNMA and FHLMC yields at 3.5-4%, how could policymakers pretend that the housing baton could be quickly and cost-effectively passed back to the private market? Few, if any, could afford a new home at those interest rates. If you were a believer in the dominance and superiority of private markets, how could you deny the signal that markets were sending - that the risk was too high given the substantial losses of recent years?

My argument for the necessity of government backing was substantially based on this commonsensical, psychological, indeed sociological observation that the great housing debacle of 2007-2010+ would have a profound influence on homebuyers and mortgage lenders for decades to come. What did we learn from the Great Depression, for instance: Americans, for at least a generation or more, became savers - dominated by the insecurity of 20%+ unemployment rates and importance of a return of their money as opposed to a return on their money. It should be no different this time, even though the Great R. is a tempered version of the Great D. Americans now know that housing prices don't always go up, and that they can in fact go down by 30-50% in a few short years. Because of this experience, private mortgage lenders will demand extraordinary down payments, impeccable credit histories, and significantly higher yields than what markets grew used to over the past several decades.

Clusty search: Bill Gross, Pimco.

Interfluidity's notes after a recent Treasury meeting.

Ryan Singel:

The lawsuit (.pdf), filed in US District court in San Francisco, asks the court to find that the practice violated eavesdropping and hacking laws, and that the practice of secretly tracking users also violated state and federal fair trade laws. The lawsuit alleges a "pattern of covert online surveillance" and seeks status as a class action lawsuit. The lawsuit was filed by Joseph Malley, a privacy activist lawyer who also played key roles in other high profile privacy lawsuits, including a $9.5 million settlement earlier this year from Facebook over its ill-fated Beacon program and a settlement with Netflix after the company gave imperfectly anonymized data to contestants in a movie recommendation contest.

"The objective of this scheme was the online harvesting of consumers' personal information for Defendants' use in online marketing activities," wrote Malley, who called the technique "as simple as it was deceptive and devious."

Unlike traditional browser cookies, Flash cookies are relatively unknown to Web users, and they are not controlled through the cookie privacy controls in a browser. That means that even if a user thinks they have cleared their computer of tracking objects, they most likely have not.

Adobe's Flash software is installed on an estimated 98 percent of personal computers, and has been a key component in the explosion of online video, powering video players for sites such as YouTube and Hulu.

Websites can store up to 100KB of information in the plug-in, 25 times what a browser cookie can hold. Sites like Pandora.com also use Flash's storage capability to pre-load portions of songs or videos to ensure smooth playback.

Gourmet Food Trucks in Los Angeles

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Carolyn Lyons:

Meetings of the five-member Transportation Committee of the Los Angeles City Council tend to be rather quiet affairs. But earlier this month, 150 people crammed into Room 1010 at City Hall to debate LA's latest gastronomic craze: gourmet food trucks.

To their fans, the trucks are a welcome addition to the city's food scene, parking outside shops and offices at lunchtimes and congregating on Friday nights to create mini food festivals. To their critics, they are a menace, stealing trade from restaurants, creating litter, lacking proper licences and regulation, and clogging the parking places of entire streets.

"We don't want to shut down the trucks but we do need to work this out," says councillor Tom LeBonge. "Many of the truck operators want free enterprise and don't like government regulation, but we have to act before it becomes a bigger problem."


Do We Still Need Websites?

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So with all this relentless talk about Twitter accounts, Facebook fan pages and cool new apps, I have a serious and timely question. Do brand websites still matter?

Yes, I know -- even asking this question is a bit digitally sacrilegious. Websites are to digital strategy as models are to fashion, but do we really need them?


I mean, didn't things seem a tad curious during the World Cup when brands like Adidas and Nike actively promoted their Facebook page -- not their primary website -- at the end of their TV spots? Just this weekend, I saw a similar cross-feed to Facebook for Kohls. Talk about kicking the ball into a different goal.

Think about all the hoops we've jumped through to register proprietary domain names, in every country and business type -- this perpetually rationalized by an almost unstoppable parade of GoDaddy ads (titillation and all). As a domain-name collector myself, it's hard not to feel a twinge of asset deterioration.

But before you start penning the "ditch the brand website" memo, hold your tweets for a moment. Websites are not going away -- they might be more important than ever -- but they serve a different and evolved purpose today, especially in this new "social" context.

Think wholesale, less retail. Think distribution, less destination. Think serving, less selling.

Crowdsourcing: Amazon's Kindle Commercial Contest

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Patty Seybold:

Once again, Amazon is running a "Design your own Kindle Commercial" contest. The deadline to submit a single video with original soundtrack and footage is August 29th. You have to be a resident of the U.S. to enter this contest. The winner will receive a $15,000 Amazon gift card and the four runners up $2,500 gift cards. These kinds of contests seem to provide great opportunities for under-recognized professionals to strut their stuff, although I'm sure that the submissions include a lot of good amateur ones as well. Last year's submission helped the careers of the winning producer-director team, the team who wrote and recorded the music, and the team who did the actual video.

Here's the winning submission from last year's contest:

Zachary Goldfarb:

For several decades, whenever a question of housing policy came up in Washington, two companies dominated. Fannie Mae and Freddie Mac marshaled armies of lobbyists, deep political connections and millions of dollars in contributions to get their way.

But now Fannie Mae and Freddie Mac, titans of the mortgage finance industry, are wards of the state, bailed out by Washington to the tune of $160 billion and banned from political activity. As the Obama administration and Congress prepare to take up overhauling the $12 trillion U.S. mortgage market, new interests are shaping the debate like never before.

Among those influencing many Democrats are affordable housing advocates and liberal think tanks that want the government to do less to foster homeownership and more to support rental housing for low-income people. Those influencing Republicans favor sharply reducing all federal support for housing.

The hottest housing market: Information

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Michelle Singletary:

In the real estate world, there was one word that used to be the cardinal rule: location, location, location.

Just about anybody -- the informed and uninformed -- could buy a house in a good location and easily make money by flipping, selling or refinancing the home, sometimes after just a short ownership.

That was then, before the Great Recession.

This is now, and the new cardinal rule of real estate is information, information, information.

"For decades, the real estate industry has operated under the principle that the less information buyers and sellers have, the better it is for agents, lenders, title companies, and all the other folks who eat from the trough," writes Ilyce Glink in "Buy, Close, Move In: How to Navigate the New World of Real Estate -- Safely and Profitably -- and End Up with the Home of Your Dreams." "But the real estate tide seems to be turning, as the housing and credit crises of 2008 have heightened awareness in Washington, D.C., and on Wall Street about the catastrophic consequences of a closed information loop."

I have no doubt that many professionals in the real estate industry will take great exception to Glink's observation. But the evidence is on her side. We ended up in one of the worst housing market collapses because far too many borrowers were uninformed, ill-prepared and overly optimistic about potential gain because of bad information they received and gladly embraced.

Bob Sutton:

My last post made me nostalgic for the old HP. Those of us who are faculty members in the Stanford School of Engineering have a special place in our hearts for the company that Bill Hewlett and Dave Packard started. They were students here and started the company with $500 borrowed from Fred Terman, who was dean of the school for many years. They also donated very generously to the school; a building is named after Bill, another after Dave, and a third after Fred Terman -- all built with HP riches. I also have been influenced by the old HP's values, which helped shape my belief that a good company or boss ought to be judged on both performance and humanity -- indeed, that is is exactly how I define a good boss in my new book.

I have blogged about it before, but it is a good time to revisit David Packard's wisdom. His quote in the title is wonderful. The worst managers and companies often seem to be doing too many things, making things too complicated for insiders and outsiders, and suffering from scattered attention rather than a sharp focus on what matters most. If you think about Apple, a big part of their brilliance is how few things they do -- they have a remarkably small product line for such a big company, for example.

I especially love Dave's 11 Simple Rules, which he first presented at a company meeting in 1958 but are just as valid now as they were then. Here are the first five:

James Pethokoukis:

Main Street may be about to get it's own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama Administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt if millions of Americans who owe more than what their homes are worth.
Fascinating. I don't think this will help during the November election.

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