Big Brother is Watching you, Part 2

Part 2

Although data storage is certainly an on-going goal of the NSA, a more likely immediate use may very well be brute-force hacks of encryption, which is an extremely computation-intensive endeavor.

All modern communications are encrypted.  The NSA is very interested in defeating encryption, and has a facility in TN engaged in the “High Productivity Computing System Program” that concentrates on that one goal.  The immediate official goal of the program is to design a computer capable of petaflop speed – that is, one quadrillion operations per second.  

Major progress on defeating encryption has already been made.

http://www.cnn.com/2013/09/06/us/nsa-surveillance-encryption/index.html

Note the mention of NSA “backdoors” in commercial encryption.  Scary, isn’t it?

Of course, technology changes very quickly.  New methods of encryption are being written all the time.  The NSA will of course try to defeat any new methods of encryption.  Assuming brute-force hacks, that is going to take considerable computer capacity.

With all due respect to Moore’s Law, there are limits to computational speed.  That is, using conventional technology.

The new frontier may be Quantum Computing.  A good video explaining the basics of quantum computing is here …

http://www.youtube.com/watch?v=g_IaVepNDT4

Before you assume it’s an entirely theoretical, consider that Quantum Computers are already being made.

http://www.dwavesys.com/en/dw_homepage.html

The NSA manufactures it's own chips (as does Google and others who place a premium on security). 

OK, the NSA has super-computers, is developing even more-powerful computers, has an unlimited budget, and operates in secret with little or no oversight. Why should I care?

Big Brother is Watching You

 

Preamble:  I am not a Data Scientist, or a Computer Expert, or a Data Security Expert.  I’m just a small-town accountant with an interest in computers. I also read a lot.  My goal in this blog is to codify my readings regarding current events, to begin a conversation regarding our expectations of privacy and 4th Amendment rights, and to provide you with links to the sources used, so that you can judge the source’s credibility for yourself.

 

Part 1

This month, the new NSA Utah Data Center comes on line.  The NSA has other facilities, including a 28 acre site near Baltimore.  But the Utah facility is remarkable, even by Google or Apple standards.

The $2B Utah facility includes 1 million square feet of space, with 100,000 square feet (officially, possibly more) dedicated to a server farm.   The Data Center will be almost entirely self-sufficient.  Security is state of the art, and includes a fence capable of stopping a 15,000 pound vehicle traveling at 50 mph.

Even more impressive is the computer capacity of the data center.  Computers consume power and generate heat.  100,000 square feet of rack-mounted computers consume lots of power, and generate lots of heat.  This Data Center will have its own electrical generator, producing 65 Mw of power.  To put that in perspective, the average home consumes about 1kWh of power.  So, a 65 Mw generator is capable of powering 65,000 houses.  The Data Center will consume 1.5 million gallons of water daily for cooling.  The NSA’s own description is here …

http://nsa.gov1.info/utah-data-center/

 

A March 2012 article in Wired speculated that the data storage capacity would be on the order of yottabytes (one yottabyte = one trillion terabytes), a capacity so large it is almost unimaginable.

http://www.wired.com/threatlevel/2012/03/ff_nsadatacenter/all/

 

However, more recent estimates put capacity in the range of 3-12 exabytes.  That’s still a lot of storage, equivalent to 24hr video and audio records of every person in the US for one year.  That estimate is also more in line with space and power specifications of the Utah facility.

 

http://techcrunch.com/2013/07/24/the-nsas-massive-utah-data-center-wont-store-anything-close-to-yottabytes-of-data/

 

http://www.forbes.com/sites/kashmirhill/2013/07/24/blueprints-of-nsa-data-center-in-utah-suggest-its-storage-capacity-is-less-impressive-than-thought/

 

So, what is the NSA going to do with all of those computers?  And why should I care? 

Stay tuned for Part 2.



Remembering James Buchanan

James Buchanan, noted Economist, died yesterday at the age of 93.  To quote an editorial in the 1/10/13 issue of the WSJ:

Though a free-marketeer to his bones, [Buchanan] made his biggest mark and won the Nobel Prize in 1986 for his work studying economic incentives in government.

With Gordon Tullock, Buchanan developed what became known as “public choice theory”.  Buchanan described it as the application of the profit motive to government: “It presupposes that if there is value to be gained through politics, persons will invest resources in efforts to capture this value”. 

In other words, Buchanan theorized that public officials often act in their own self-interest rather than the public’s interest.

While that might seem a quaint notion to my younger readers, it was ground-breaking theory at the time.  I grew up in the 60’s, in Alabama. To paraphrase the Chinese proverb, they were indeed “interesting times”. Civil rights, Women’s rights, Vietnam, rampant drug use – so many social issues that roared to the forefront of American consciousness.  Previously, Americans really did believe that public officials were more nobly motivated and trustworthy than were business and other private-sector people.  We believed that public officials acted only in the public interest.

Then came Nixon.  Slowly, Americans woke up to the reality that public officials didn’t deserve our blind trust. 

Buchanan’s thoughts seem as relevant today as in 1986.  Witness the paralysis in Congress in its “handling” of the fiscal cliff.  It had nothing to do with serving the American people.  It was about political gamesmanship. 

 “The only thing new in this world is the history that you don’t know” … Harry S. Truman

Problems can be a good thing

A recent discussion about early computers reminded me of the first computer I worked with.  The year was 1973, and I was a 19 year old computer tech in the USN.  The computer was called VAST – “Versatile Avionics Shop Test”. 

“VAST is a computer-controlled, integrated test system composed of independent, general-purpose stimulus and measurement instruments, referred to as Building Blocks (BBs). The use of interface devices (ID) enables the station to be adapted for the unique capabilities of the various components. VAST was a forerunner of modern automatic test equipment (ATE) such as Consolidated Automated Support System (CASS), Avionics Test Set (ATS), and Intermediate Avionics Test Set (IATS).”  Source

VAST was designed to support selected avionics from the F-14, the S-3, the A7-E and the E2-C, and entered the fleet in 1973.  After 32 years of service in the fleet, VAST was decommissioned in 2005.  The picture below was taken at that ceremony. About half of a VAST station is shown on the right.

 

I was in the first wave of VAST technicians in 1973/1974 that trained at VF-124 (NAS Miramar, CA), and was subsequently assigned to one of the first two F-14 squadrons on the east coast (NAS Oceana), and aboard the carrier USS Kennedy.

In theory, the line techs would remove and replace avionics components to keep the planes in the air, and send the bad “box” to the VAST shop for diagnostics and repair.  After connecting the box to VAST, the computerized diagnostic program would correctly identify the bad component.  The operator would replace the bad component, repeat the diagnostic program to insure the problem had been fixed, and return the box to the line for inventory.  At least, that was the plan.

As with all new systems, there were problems.  In this case, both the F-14 and VAST were new and untested in the fleet, and there were MANY problems, generally falling into these four categories:

1.       A component other than the one identified by the program was in fact the problem.

2.    The interconnecting devices were faulty.

3.    The program was faulty, or

4.    There was a problem with the VAST station itself.

Some troubleshooting was easy, e.g. if you thought that particular VAST station was bad, or the interconnecting device was bad, try another station or interconnecting device setup.

Some troubleshooting wasn’t so easy.  Countless hours were spent pouring over schematics, manually recreating program steps, re-writing code, and communicating real world results both to the vendor for future revisions, and to the fleet for the benefit of other installations.  Vendor field engineers were with us on the first cruise, but it was at all times very much a team effort.  To meet the challenge, everyone had to up their game.  Personally, although my military electronics training was very good, I still thought it worthwhile to obtain an AA in Computer Engineering Technology and to learn FORTRAN, which I did.

To be successful, we had to work smart, work together, and stick with each problem until it was solved.  Lessons learned early on that have served me well ever since. 

What are the characteristics of good problem solvers?  This list is as good as any.

Moral of the blog: Learning problem-solving skills always begins with a problem!

Old accountants never die, they just lose their balance

(Preamble: While this topic may be relevant in other industries, I've written it from the perspective of public accounting, which is all I've known for 30 years.)

Mandatory retirement age is not a new concept, but seems to be receiving renewed attention lately. Perhaps, as I approach age 58, I'm just paying more attention to it. Perhaps people are living longer.  Perhaps, because of the economy, people need to work longer.

In public accounting, the "Big 4" have long mandated retirement at a certain age, at least for partners. That age seems to currently be set at 60 to 65, with an occasional mandate at 55. I presume second-tier firms also have retirement age triggers.

For young accountants just entering the profession, that mandate is important. They must think there will be room for them at the partner's table at some point - otherwise the 60-80+ hour work weeks required of new hires won't last long. Most new hires at a Big 4 firm either burn out or leave for an industry job after a few years anyway, but the promise of partner does seem to work in the short term. The beginning salary is nice, too, until you figure out that, on an hourly basis, it isn't. Many are grateful to just have a job. About 1.5 million, or 53.6 percent, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed, the highest share in at least 11 years. 1 Also, the big firms are very vocal about new partner appointments, dangling that carrot at every opportunity.  For example, Grant Thornton recently announced the addition of 27 new partners. However, rumor has it that they let go of 60. 2 In fact, the down economy has produced a recent blood bath of partner terminations, sometimes for the simple reason that the senior partners weren't making enough money. But, for the sake of employee morale, that sort of thing is not discussed quite as prominently

What about the old partners/employees bumping up against mandatory retirement age? Interestingly, Ernst & Young released a study 3 which found “Older workers aged 65+ have the highest productivity and motivation levels, yet they are on the lower end of the salary scale”. In other words, they are motivated by something other than money. China, a country in alarming short supply of accountants (with all those people? go figure), is looking to older accountants to fill the gap, and their reasoning sounds, well, reasonable. “The partners are still full of energy in their mid-50s, so what is the point of asking them to retire early?” 4  Why indeed, when the average older employee is on the top of their game professionally.  More often than not, it's not that they have to work, it's that they WANT to work.  To be productive.  To be relevant.  To be needed.  And if you think the average older employee sits around all day goofing off, think again.  The days of warm bodies just filling space at work are over, regardless of the color of your collar.

So, what is the answer? Jobs are in short supply for everyone, regardless of age. Older employees are looking to their 401(k), probably worth much less now than they had envisioned, and wondering what they will do. Wal-Mart Greeter? ("Welcome to Wal-Mart - get your shit and get out") And the recent college grads, 1.5 million instances of "failure to launch", still living with Mom and Dad?

The answer is simple, at least in accounting. The Big 4 machinery requires a constant supply of new blood, and top students at recruited campuses will always have a chance. As to older workers who want or need to continue working, the market will take care of them. Their next job may be at a regional or local firm, but there is always opportunity for talent.

At least, that's what I think.  What do you think?

YouTube video of local teacher goes viral!

The video (just sound, actually) of a social studies teacher ranting at a student at North Rowan High School has now gone viral at close to 1M views.  The story has been picked up by the national media.  The video is here …

http://www.youtube.com/watch?v=vjpWaESn_9g

As back story, the student involved is intelligent, informed and respectful, and the teacher is an idiot.  The teacher is on paid leave, but school admin is already distancing itself from her.  She’s on her way out (perhaps coming to your community soon).  The student is also gone.  He will get a GED from the local community college, then go on to college from there.

I hope the national exposure given to this incident focuses on this specific teacher rather than the school system as a whole.  Our local school system faces sharply reduced funding from antagonistic county commissioners, indifferent parents, and a largely at-risk student population, and yet continues to make progress.  Our superintendent Judy Grissom works hard for the students of Rowan County, and we are so fortunate to have her. We are also blessed with some very good teachers.

As to recording conversations, are teachers allowed to do that?  I wonder how many would go like this …

http://www.youtube.com/watch?v=WVvKnq5XT-g

APD (Another Pointless Designation)

Today, Barry Melancon, President and CEO of the American Institute of Certified Public Accountants, announced the first-ever availability of the new CGMA designation, the Chartered Global Management Accountant, a joint venture of the AICPA and CIMA, or Chartered Institute of Management Accountants.  An introductory video is here ...

CGMA Announcement

So, you watched the video, but you're still not sure exactly what a CGMA is?  Join the club.  It sounds good, kind of important but in a really vague way.  Clearly, it IS Global, so there's always that.  I see Mr. Melancon is already a CGMA. Wow, that was fast!  Isn't there an examination or something?  Nope, just the ability to write a check.  Exams won't come until 2015, at which point the AICPA will have a better handle on whether or not folks are buying into the whole concept.

We live in a world of professional designations.  For example, in a former life I worked in the world of business valuation.  The oldest designations were ASA (Accredited Senior Appraiser - American Society of Appraisers), CBA (Certified Business Appraiser - Institute of Business Appraisers), CFA (Chartered Financial Analyst - CFA Institute), etc.   Then, along came the upstart CVA (Certified Valuation Analyst - National Association of Certified Valuation Analysts), which was marketed specifically to CPAs.  Not to be outdone, the AICPA countered with ABV, or Accredited in Business Valuation.   Which designations were worth pursuing?  "Get them all" was the advice at conferences.  It mattered to an expert witness to be more credentialed than the opponent's expert, and it mattered from a marketing perspective (I have more professional designations than my competitor, so obviously I'm smarter).

Otherwise, it didn't matter.  You were either a serious student of the art and science of business valuation, or you weren't.  I took the ASA's 4 weeks of training, the AICPA's Certificate of Educational Acheivement in Business Valuation program (all 8 days of it), and NACVA's training (all 5 days of it), and I can tell you the ASA program is far superior to the others.  The big differences were not to the valuation practioner; the big differences are the certification fees and annual professional dues, the primary revenue stream for any professional organization.  The AICPA now can boast not only the CPA (regular, several levels of Associate, and several levels of Affiliate) , but also the PFS (Personal Financial Specialist), the ABV, the CFF (Certified in Financial Forensics) and now the CGMA.  Ka-ching.

Of course, there is resistance to the whole CGMA concept (in addition to the fact that it's a pointless designation).  The Institute of Management Accountants, for example, is a rival designation grantor, and is understandably upset that the AICPA is trying to steal its revenue stream.  Perhaps the IMA will up their game, and transform into the GLOBAL Institute of Management Accountants.
 
In any event, the IMA shouldn't underestimate the AICPA.  From selling professional standards by which members must adhere, bombarding members with solicitations from "affiliates" selling everything from copiers and computers to cheap car rentals, cross-selling insurance from professional liability to life and disability, spinning off CPA2Biz to sell CPE (a good subject for another blog), the AICPA has made it clear that it will do whatever it takes to make money. 

Back in the day, the AICPA stood for professionalism, ethics and honor, and CPAs consistently placed at the top on each year's "Most Trusted Profession" list.  Of course, back then, Arthur Anderson's reputation for integrity was legendary.

Now, not so much.