Bulls & Bears

Glitches, outages reignite cyberterrorism fears

Biggest threat to America a cyberattack?



New Technical Glitches and Computer Outages Re-igniting Cyberterrorism Fears

Suzy Welch: They didn't need that to know how weak we are. We don't know if these glitches last week were all coordinated but we don't need to know. These are like tremors before a big earthquake. We know it's coming. Think about the loss of life potential, planes losing ground control contact, the dams stopping, the hospitals. You can be very end times about this. It's scary but I have faith in American ingenuity and more than our brainpower I have faith in the mighty power of capitalism because this is a growth industry. I think this is the growth industry of the next ten years, building the kinds of software or hardware and so forth that will stave off these cyberattacks. If I were ruling the government, something which would never happen, you know, I would stop the incentives to the industries that do solar energy and electric cars, redirect all that money toward doing everything to let that industry rip. That is the only hope.

Gary B. Smith: My daughter is getting a master's in cybersecurity at Johns Hopkins because I identified that and health care along with her as the, as Suzy said, probably growth industry for maybe, you know, the next 20, 50 years. But that aside, I'm not as optimistic as Suzy is. You know, this latest government hack was thought to be very small. It turned out to affect 20 million Americans. The head of the OPM had to resign over it. Here is the problem with all that. In every war we've fought since I guess the Civil War they've always been on foreign soil. So we read about it in the newspaper and it's kind of this image we have of war, it doesn't affect us. I'm betting a couple of people on this panel went to file their tax return and found out my wife's social security and mine were hacked. It's that kind of thing. This new war is affecting all of us on a day-to-day basis and we're so disjointed in fighting it, this could be a tough one.

Emily Tisch Sussman: I think we can agree with anybody who files tax return, looks at their smartphone. We know how much information we have out there. It only makes sense this is where we need to be beefing up, looking at the lens of national security through cyber. It's all out there. We all agree this is where we should be investing but a divergence between what people want and their private security, particularly around something like their phone, people want security around that, and what law enforcement wants because law enforcement wants the back door in. They want to be able to say we want to be able to see what's happening right now as it happens. But you can't really go in both directions at once.

John Layfield: I see us going in the direction you're talking about with the coordination. Lloyds and Cambridge University's came out with a study saying this would cost us up to $1 trillion with a cyberattack. We have a lack of coordination among government entities. We have the Department of Homeland Security, has their own cyber unit, the pentagon has their own cyber unit and all the intelligence agencies have their own cyber unit, much like pre-9/11. The CIA and FBI did not have good communication back and forth. The coordination we need is some type of joint coordination. We have $14 billion allocated by President Obama, so we have the money in the budget. We don't have good coordination. What Gary B. and Suzy are talking about is some type of public/private partnership is probably the way to go forward, hire somebody to put this money in the cloud and let some private enterprise like a Google protect this because they'll do a better job than our government.

Jonas Max Ferris: As they should be. I'm a little more confident in Gary's daughter's future in protecting us from cyberterrorism than I think Gary is. I think the terrorist thing -- everything that was said about cyberattacks, about specifically financial information, Social Security, espionage, that's hard to fight and you can prove that because companies like Sony can't stop it so forget the government. Terrorists are brick-and-mortar. They're just not going to send a train into another train. They would have done it already. It's hackable. The death and destruction crowd is not the top talent. The Russian and Chinese trying to get information, trying to make money off hacking, that's where the threat is and that's hard to fight. Fortunately, I don't want to underplay our enemies but our terrorist enemies are not the top computer talent of this world.

Starbucks and Chipotle Announcing Price Increases After Hiking Workers' Wages

John Layfield: It is just the start of it. The New York wage board looked at this and said you will see fast food prices increase by 22 percent if the minimum wage goes to $15. We've seen this in Seattle. The foot-long subway has gone from $5 to $6. Starbucks has raised prices nationally but three times as fast in Seattle. Most of these restaurants are franchisees. They're not the big multimillion-dollar corporations. They're mom and pops with small margins. So the minimum wage, if it's raised to $15, has to be passed on to somebody. Cities like this because it takes away subsidies that go to lower wage workers. It's passed on to the people buying the food. If you're okay with that, you're okay with a $15 minimum wage, but expect price s to be significantly higher.

Emily Tisch Sussman: There were a lot of assumption in that but I'm going to throw another one in. These cities that the prices are being hiked in, these are some of the highest cost of living cities in the country -- Seattle, San Francisco, Chicago. That was before minimum wage hikes. These are the highest cost of living cities in the country. It makes sense their wages would go up and their prices would go. This is what happens in large cities.

Gary B. Smith: What Emily's talking about is like the divine coincidence. We raise the minimum wage, all of a sudden subway says, nope, not $5, $6. Wow. The timing is mind-boggling. We're just moving money from one shell game to another. John points out the foot long from $5 to $6, minimum wage went up to $15. If minimum wage went up $5 an hour, if five come through in that one hour and have to pay $6, that's $5 more out of their pockets. All we've done is take the money out of the consumers and put it over in these minimum wage workers. Where is the benefit to society in that? How does it help the economy? It doesn't.

Suzy Welch: It is with a human face. I was walking through downtown Manhattan the other day and there was this long line going around the block. I thought, is it the new "Magic Mike" movie? No. It was lunchtime at Chipotle. I was there and there was a long line down the block in midtown Manhattan, where there's roughly 5 billion choices you can eat lunch and people were lining up for Chipotle. True, costs went up and the companies that raise their prices are the ones that can, the ones with the loyal user base like Starbucks and Chipotle. We knew the customer would pay with the minimum wage going up. The places this hurts employees, McDonald's won't be raising their prices anytime soon. They don't have a loyal customer base right now. The employees will be will get squeezed, less money to go hire, hire fewer people, pure economics.

Jonas Max Ferris: Look, all costs get passed onto consumer. If the company is successful they'll have a profit margin. There's not some magic pot of money they'll eat the cost of labor doubling. Oh, we have to cut back on the corporate jet. The Dollar Meal is going to go away. But all these same cities we noted, you're already paying probably 50 percent more than you should for a lot of goods because their rents are so high, because of government regulations on buildings in San Francisco and all these other things. My point is the ultimate point is does the consumer, a voter prefer a higher price with those rules? Do you want the handicap ramp, less skyscrapers in San Francisco, a higher wage to the workers? If you like those things you won't have a dollar menu for long. If you prefer cheap food, there shouldn't be any of these regulations.

US Flags Burned in Tehran as Protesters Chant 'Down With USA'

Gary B. Smith: When I was in grade school, I learned a lesson quickly -- bullies did not respond to appeasement, to negotiation. They responded to a punch in the know. You look at the bully of history and of now, Nazi Germany, Russia, Iran, Iraq, North Korea have not responded to negotiations. A punch in the nose is the way to go and that's sanctions.

Emily Tisch Sussman: What is happening is horrible. We need stability in the region. It will make the US safer and Israel safer. But the key to what we agree to always has and always will be is cutting off their path to building any sort of nuclear capacity, not only building it but also we need to be able to make sure we go in and check that. We have to be verifiable. We do need to still be at the table on these deals.

John Layfield: This is incredibly dumb. I don't know who's negotiating this. Neville Chamberlain? We have a pair of aces and a pair of twos and we're letting them dictate terms. They are hurting with these sanctions. That's why they're coming to the table. We are coming to them because our president wants a legacy issue in his second term. We're thinking a bad deal is better than no deal. That is wrong.

Gary Kaltbaum: I agree with Gary, a punch in the nose. On top of that, we're negotiating alongside china and Russia who want to sell arms to Iran. It's crazy. Go back to sanctions.

Jonas Max Ferris: It's been working since 1979. They can't even get a real American flag to burn because you can't buy stuff in the country. It's like Cuba. It doesn't lead to anything except black markets. Let businesses build, let them do trade, then punish them with a high tariff if things aren't going the way we want. The sanction creates a black economy and makes the people hate America more. They blame their problem and troubles cutting them off from goods and services. A fairer system is what you do with a normal country like china where you have tariffs.

Stock Picks

Gary B. Smith: Cool down this summer with (KO); up 30 percent by June 2016

John Layfield: Serve up a 15 percent profit with (UBS) in 1 year

Jonas Max Ferris: Get "McHappy" with (MCD); up 15 percent in 1 year