9 ms·

This is (I was surprised) a pretty good article. Financial services are regulated and based on recent experience, they're concerned with systemic risk. Most ind

This is (I was surprised) a pretty good article. Financial services are regulated and based on recent experience, they're concerned with systemic risk. Most industries do not have anyone responsible for worrying about this kind of thing. It seems reasonable to start worrying about the fragility potentially introduced by these massive internet infrastructure companies.

pferde 9y ago
> Financial services are regulated and based on recent experience, they're concerned with systemic risk. Most industries do not have anyone responsible for worrying about this kind of thing. I'd say that most industries do not have anyone responsible for worrying about it high enough in the management chain.
- deleted 9y ago
  [deleted]
tyfon 9y ago
I really hate the "too big to fail" meme and I strongly agree with Bernie in that if you are too big to fail you are too big to exist. That should be the priority.
- 65827 9y ago
  Why is every arrangement of characters now a "meme". That word has moved beyond devoid of meaning, at this point it's like a black hole of nothingness of a word.
  - TrickyRick 9y ago
    > A meme (/ˈmiːm/ MEEM) is an idea, behavior, or style that spreads from person to person within a culture. Seems like it's fitting here, does it not? Certain banks being "too big to fail" is an idea passed among persons within our culture.
    - sharemywin 9y ago
      kind of like the idea of a meme (/ˈmiːm/ MEEM) is a meme (/ˈmiːm/ MEEM).
- TrickyRick 9y ago
  Agreed, it seems like the software approach as well. You wouldn't want a class or a piece of code to be "too big" to fail, you'd refactor it into smaller pieces which can be overviewed more easily.
  - CaptSpify 9y ago
    It's really a basic engineering principle. Smaller and more distributed systems are more reliable.
    - collyw 9y ago
      This sounds like the microkernel / monolith debate. Except monoliths kind of won.
      - CaptSpify 9y ago
        It depends on what you want to optimize for. micro is good for some things, mono is good for other things. Neither is inherently "better", it just depends on your goal
- dalbasal 9y ago
  I don't know what Bernie's specific plans were/are but it's not unusual. At least, at first blush, this is a lot of people's reactions. Too-big-to-fail = danger = make it smaller. Realisitically, this has not been the solution implmented (in the EU & US, at least). In the EU, it is even more crucial as the "solutions" to this problem are applied to state finances as well as financial institutions. In terms of policies, there are two competing approaches: (1) Reduce the size of "too-big-to-fail" institutions. (2) Regulate them more heavily (or some other strategy) so that they will not fail. In the EU, this is being applied to states, not just financial institutions. Rules that (supposedly) reduce catastrophic risk. Almost all seripous policy proposals are in the no. 2 category. Tighten regulation, reduce the risk of failure. Tighter regulation lends to stronger incumbents and larger average company size so by doing 2, you are probably doing the opposite of 1. As I said, I don't know what Bernie's proposal is or how mature it is as a policy (as opposed to a politician statement). It would be notable if a left wing politician propsed loosening bank regulations, though definitely not impossible or unreasonable.
  - ktRolster 9y ago
    Paul Volcker's solution was that any time a bank is so big that we need to bail it out to avoid systemic problems, then the bank should be broken up. We can't always see all the problems in advance, but we can break them up in the aftermath.
- awkwarddaturtle 9y ago
  > I really hate the "too big to fail" meme and I strongly agree with Bernie in that if you are too big to fail you are too big to exist. That seems like the most reasonable response. And yet, since the great recession, our policy has been "make 'too big to fail' even bigger". The problem is that the banks have become too powerful for anyone to challenge. A Teddy Roosevelt type of political leader can't exist today.
  - adventured 9y ago
    Corporate entities were radically more powerful in Teddy Roosevelt's day, far beyond what they are today. They were almost entirely unchained in regards to economic power, whereas today there is hyper regulation (tens of thousands of pages of it, including direct Fed control over the banking system). Standard Oil was as powerful as the US Government in that era, as were the railroads. JP Morgan was far more powerful than the US Treasury. Cornelius Vanderbilt - pre Roosevelt - all by himself had greater financial capability at his peak than the US Government at the time. The difference, is back then there was wide-spread and growing fear of the combinations and would-be monopolies. Today, Americans are relatively unconcerned by Microsoft (desktop), Google (search, android), Walmart & Amazon (retail), Intel (microprocessors), Facebook (social), Cisco, Boeing, etc.
    - pyroinferno 9y ago
      Why leave it at American companies? The Dutch East India Company was far more powerful and bigger than any company seen today.
      - bb611 9y ago
        Beyond that, it was more powerful than many (maybe most) modern governments. It was an international power unto itself.
  - tdb7893 9y ago
    Here is an smbc comic making fun of this phenomenon. http://www.smbc-comics.com/index.php?id=3794 http://www.smbc-comics.com/index.php?id=3794
peteretep 9y ago
If you wanted to blow something up to make the west suffer, an AWS datacenter would probably be a pretty good target. I wonder at what point that becomes a legitimate national security concern, and the government steps in to provide protection.
- mediascreen 9y ago
  Wouldn't you have to blow up at least all the datacenters in a region to make an impact?
  - cm2187 9y ago
    All you need to blow is a few cables.
    - cachvico 9y ago
      Then all that's needed to repair is a few cables.
    - mediascreen 9y ago
      Well, you need to disable redundant ISP or power cables to all datacenters in a region. and that would probably be pretty easy to recover from in a day or two. I imagine Amazon has some on site security measures as well. It would be interesting to see how important services would cope with their main region going down for more than a few days.
      - cm2187 9y ago
        Not that I think it is wise to discuss optimising a terrorist activity on a public forum, though it is interesting from a threat analysis point of view. You don't need to severe both power and data cables. For power the datacentre should be able to cope for a while, particularly if it has access to fuel deliveries. Data cable should be both easier to severe and more difficult to recover from (not the least to identify which cable has been cut where). Most of the infrastructure of a country in term of cables run along railway tracks, sewers, etc. This means thousands of kilometers of cable even for a small country, and it is impossible to secure everything. It is impossible to severe everything either but you don't need to severe every single cable. As long as you severe enough of the backbone, the other cables will be overloaded. So I don't think it would take that much effort for a network of terrorists to create havoc in the communications of a country for at least a few days to a week. And the consequences for the economy can be pretty dire. We have seen with BA what happens when their datacentre goes offline. Their all fleet is grounded. I imagine the consequences of a country-wide outage could be pretty dramatic. Unlikely anyone would die but you could really dent the GDP.

pferde 9y ago

> Financial services are regulated and based on recent experience, they're concerned with systemic risk. Most industries do not have anyone responsible for worrying about this kind of thing. I'd say that most industries do not have anyone responsible for worrying about it high enough in the management chain.

deleted 9y ago
[deleted]

tyfon 9y ago

I really hate the "too big to fail" meme and I strongly agree with Bernie in that if you are too big to fail you are too big to exist. That should be the priority.

65827 9y ago
Why is every arrangement of characters now a "meme". That word has moved beyond devoid of meaning, at this point it's like a black hole of nothingness of a word.
- TrickyRick 9y ago
  > A meme (/ˈmiːm/ MEEM) is an idea, behavior, or style that spreads from person to person within a culture. Seems like it's fitting here, does it not? Certain banks being "too big to fail" is an idea passed among persons within our culture.
  - sharemywin 9y ago
    kind of like the idea of a meme (/ˈmiːm/ MEEM) is a meme (/ˈmiːm/ MEEM).
TrickyRick 9y ago
Agreed, it seems like the software approach as well. You wouldn't want a class or a piece of code to be "too big" to fail, you'd refactor it into smaller pieces which can be overviewed more easily.
- CaptSpify 9y ago
  It's really a basic engineering principle. Smaller and more distributed systems are more reliable.
  - collyw 9y ago
    This sounds like the microkernel / monolith debate. Except monoliths kind of won.
    - CaptSpify 9y ago
      It depends on what you want to optimize for. micro is good for some things, mono is good for other things. Neither is inherently "better", it just depends on your goal
dalbasal 9y ago
I don't know what Bernie's specific plans were/are but it's not unusual. At least, at first blush, this is a lot of people's reactions. Too-big-to-fail = danger = make it smaller. Realisitically, this has not been the solution implmented (in the EU & US, at least). In the EU, it is even more crucial as the "solutions" to this problem are applied to state finances as well as financial institutions. In terms of policies, there are two competing approaches: (1) Reduce the size of "too-big-to-fail" institutions. (2) Regulate them more heavily (or some other strategy) so that they will not fail. In the EU, this is being applied to states, not just financial institutions. Rules that (supposedly) reduce catastrophic risk. Almost all seripous policy proposals are in the no. 2 category. Tighten regulation, reduce the risk of failure. Tighter regulation lends to stronger incumbents and larger average company size so by doing 2, you are probably doing the opposite of 1. As I said, I don't know what Bernie's proposal is or how mature it is as a policy (as opposed to a politician statement). It would be notable if a left wing politician propsed loosening bank regulations, though definitely not impossible or unreasonable.
- ktRolster 9y ago
  Paul Volcker's solution was that any time a bank is so big that we need to bail it out to avoid systemic problems, then the bank should be broken up. We can't always see all the problems in advance, but we can break them up in the aftermath.
awkwarddaturtle 9y ago
> I really hate the "too big to fail" meme and I strongly agree with Bernie in that if you are too big to fail you are too big to exist. That seems like the most reasonable response. And yet, since the great recession, our policy has been "make 'too big to fail' even bigger". The problem is that the banks have become too powerful for anyone to challenge. A Teddy Roosevelt type of political leader can't exist today.
- adventured 9y ago
  Corporate entities were radically more powerful in Teddy Roosevelt's day, far beyond what they are today. They were almost entirely unchained in regards to economic power, whereas today there is hyper regulation (tens of thousands of pages of it, including direct Fed control over the banking system). Standard Oil was as powerful as the US Government in that era, as were the railroads. JP Morgan was far more powerful than the US Treasury. Cornelius Vanderbilt - pre Roosevelt - all by himself had greater financial capability at his peak than the US Government at the time. The difference, is back then there was wide-spread and growing fear of the combinations and would-be monopolies. Today, Americans are relatively unconcerned by Microsoft (desktop), Google (search, android), Walmart & Amazon (retail), Intel (microprocessors), Facebook (social), Cisco, Boeing, etc.
  - pyroinferno 9y ago
    Why leave it at American companies? The Dutch East India Company was far more powerful and bigger than any company seen today.
    - bb611 9y ago
      Beyond that, it was more powerful than many (maybe most) modern governments. It was an international power unto itself.
- tdb7893 9y ago
  Here is an smbc comic making fun of this phenomenon. http://www.smbc-comics.com/index.php?id=3794 http://www.smbc-comics.com/index.php?id=3794

peteretep 9y ago

If you wanted to blow something up to make the west suffer, an AWS datacenter would probably be a pretty good target. I wonder at what point that becomes a legitimate national security concern, and the government steps in to provide protection.

mediascreen 9y ago
Wouldn't you have to blow up at least all the datacenters in a region to make an impact?
- cm2187 9y ago
  All you need to blow is a few cables.
  - cachvico 9y ago
    Then all that's needed to repair is a few cables.
  - mediascreen 9y ago
    Well, you need to disable redundant ISP or power cables to all datacenters in a region. and that would probably be pretty easy to recover from in a day or two. I imagine Amazon has some on site security measures as well. It would be interesting to see how important services would cope with their main region going down for more than a few days.
    - cm2187 9y ago
      Not that I think it is wise to discuss optimising a terrorist activity on a public forum, though it is interesting from a threat analysis point of view. You don't need to severe both power and data cables. For power the datacentre should be able to cope for a while, particularly if it has access to fuel deliveries. Data cable should be both easier to severe and more difficult to recover from (not the least to identify which cable has been cut where). Most of the infrastructure of a country in term of cables run along railway tracks, sewers, etc. This means thousands of kilometers of cable even for a small country, and it is impossible to secure everything. It is impossible to severe everything either but you don't need to severe every single cable. As long as you severe enough of the backbone, the other cables will be overloaded. So I don't think it would take that much effort for a network of terrorists to create havoc in the communications of a country for at least a few days to a week. And the consequences for the economy can be pretty dire. We have seen with BA what happens when their datacentre goes offline. Their all fleet is grounded. I imagine the consequences of a country-wide outage could be pretty dramatic. Unlikely anyone would die but you could really dent the GDP.