Above the Fold

Ukrainian Conflict Brings Cyber Warfare to Light

While it has always denied wrongdoing, the Russian government has been linked to a plethora of cyber attacks in the past. And as the Ukrainian conflict continues to grind on, digital infrastructure is being targeted by Russia as it faces alienation and crippling sanctions from countries around the world. On one end, Russia is allegedly increasing cyber attacks on the U.S. financial system, with several large banks and wirehouses reporting a sharp increase in attempted network breaches. Critical infrastructure is also an increasing target according to President Biden. Experts also suggest that medium and small businesses step up their network defenses as Russian hackers could shift to smaller, more vulnerable American targets.

But with much of the world growing increasingly angry at Putin’s unprovoked attack, there’s evidence of increased “cyber warfare” against Russian targets. Lone wolf hackers, acting without direction from any government, have reportedly taken aim as well. The Ukrainian government has even assembled an “IT Army,” which has targeted several key sites, including the Moscow Exchange.

Unfortunately, the hacking world is highly fragmented and full of activist types (called hacktivists) that have little allegiance toward one government or another. From an investor’s perspective, cyber-security companies and network hardware makers are likely to benefit from the increases in global cyber warfare. 

Three Things 

1. Ford’s Major Reorg – In a monumental announcement, Ford will split its company in two, creating separate entities for conventional gas-powered vehicles and the other focused solely on electric vehicles (EVs) and drive-related software. The companies will be separately named and managed, with the EV company called “Ford Model E.” The company estimates that EVs will account for half of global sales by 2030 and has been investing heavily in new model development, battery production and EV partnerships. 
2. High-End Auto Supply Sinks (Literally) – A cargo ship containing 4,000 electric and gas-powered cars and SUVs bound for the U.S. sank 250 miles off the coast of the Azores. All the luxury vehicles were produced by Volkswagen brands and included a large number of Porsches, Bentleys and Lamborghinis. The vessel had originally caught fire in mid-February after a lithium-ion battery in one of the EVs reportedly exploded. 
3. Eurozone Sees Record Inflation – Consumer prices across Europe surged to an all-time high of 5.8%, driven largely in part by the near 32% year-over-year increase in energy costs. This is the fourth month in a row of record inflation across the bloc, and it’s likely to get worse as the Russo-Ukrainian War drags on. With 40% of European natural gas coming from Russia, prices are unlikely to wane and are expected to dramatically impact economic growth across the region this year. Unfortunately, policymakers have few tools to counteract weakening growth as additional monetary and fiscal stimulus would further fuel inflation.

Did You Know? 

Cyber Attacks Are Big Business

Since the pandemic began, instances of cybercrime have increased 600%, with tens of millions of attacks now logged per year. Ransomware attacks alone are growing more than 350% annually, and cybercrime is expected to cost businesses $10.5 trillion annually by 2025. A recent study by Accenture found that 43% of cyber attacks are aimed at small businesses, but only 14% are prepared to defend themselves … and most breaches go completely unnoticed for extended periods, often allowing criminals to peruse your data at their leisure.