The Daily Parker

While not quite as viscerally grotesque as a 140-tonne fatberg, new details about the failures at Equifax that led to its massive data breach are still pretty disgusting:

Equifax has confirmed that attackers entered its system in mid-May through a web-application vulnerability that had a patch available in March. In other words, the credit-reporting giant had more than two months to take precautions that would have defended the personal data of 143 million people from being exposed. It didn't.

As the security community processes the news and scrutinizes Equifax's cybersecurity posture, numerous doubts have surfaced about the organization's competence as a data steward. The company took six weeks to notify the public after finding out about the breach. Even then, the site that Equifax set up in response to address questions and offer free credit monitoring was itself riddled with vulnerabilities. And as security journalist Brian Krebs first reported, a web portal for handling credit-report disputes from customers in Argentina used the embarrassingly inadequate credentials of "admin/admin." Equifax took the platform down on Tuesday. But observers say the ongoing discoveries increasingly paint a picture of negligence—especially in Equifax's failure to protect itself against a known flaw with a ready fix.

(Emphasis mine.)

Whenever people conservatives say that private industry is better at solving problems than government, I just think about some of the companies I've worked for, stir in crap like this, and laugh out loud.

With only a very small group to insure, Blue Cross/Blue Shield of Illinois is leaving the Obamacare exchange for small businesses:

Calling all small businesses with a Blue Cross & Blue Shield of Illinois plan through the Obamacare public health insurance exchange: Look out for an email this week informing you that the state's largest insurer is officially leaving the online marketplace.

That leaves small employers looking for an exchange plan for 2018 with one option: downstate Health Alliance. Chicago-based Blue Cross, which has a dominating market share in Illinois among consumers and small businesses alike, still plans to woo small employers with plans off the exchange.

To be sure, the so-called Small Business Health Options Program, or SHOP, where small businesses nationwide can buy coverage on the federally-run online marketplace HealthCare.gov, never gained steam for a host of reasons. For one, small employers prefer trusted brokers instead of using their time to navigate the incredibly complex world of health insurance.

Blue Cross disclosed in August that it planned to leave SHOP, while the insurer proposed rate hikes for individual plans sold on the exchange. The online marketplace wasn't the most effective way to offer employers choice, said Brian Cheney, Blue Cross vice president of the small business market. Besides, businesses can buy the same sets of Blue Cross plans and rates on and off the exchange.

BCBSIL has no plans to leave the individual Obamacare exchange.

Credit reporting agency Equifax reported last week that thieves had made off with 143 million customer records:

According to a person familiar with the breach investigation, Equifax appears to have been targeted initially because the company keeps on file millions of active cards, belonging to people who pay $19.95 or more per month to have Equifax monitor their credit reports and alert them to potential fraud. The hack, which the company says took place in late July, put as many as 143 million consumers -- or half the U.S. population -- at risk.

The person, who requested anonymity to discuss the ongoing investigation, said the web application the attackers used to breach Equifax’s corporate network granted access to both the credit card files and back-end systems storing the exhaustive data profiles on consumers. Those profiles include Social Security numbers, driver’s license numbers and other sensitive information, Equifax said Thursday in a statement.

Criminals took advantage of a “U.S. website application vulnerability to gain access to certain files” from mid-May through July of this year, Atlanta-based Equifax said. The intruders also accessed dispute documents with personal identifying information for about 182,000 consumers. Credit card numbers for about 209,000 consumers were also accessed, the company said.

“You would expect these guys to have compartmentalized this data far enough away from a web server -- that there would not be any way to directly access it,” said Tim Crosby, senior consultant with security-assessment firm Spohn.

Knowing how large companies work, and knowing about the diffusion of responsibility principle, and having a healthy belief in the power of governments to correct for bad incentives, I can't say I'm surprised. Neither is the Atlantic's Ian Bogost:

There are reasons for the increased prevalence and severity of these breaches. More data is being collected and stored, for one, as more people use more connected services. Corporate cybersecurity policy is lax, for another, and sensitive data isn’t sufficiently protected. Websites and apps, which are demanded by consumers as much as they serve the interests of corporations, expose paths to data that should be better firewalled. Software development has become easy and popular, making security an afterthought, and software engineering has failed to adopt the attitude of civil service that might treat security as a first-order design problem. And hacking and data theft have risen in popularity and benefit, both as an illicit business affair and as a new kind of cold warfare.

Of course Equifax, as would be expected of a normally-functioning American corporation, bungled the response:

On Thursday night, I entered my last name and the last six digits of my Social Security number on the appropriate Equifax web page. (They had the gall to ask for this? Really? But I digress.) I received no “message indicating whether your personal information may have been impacted by this incident,” as the site promised. Instead, I was bounced to an offer for free credit monitoring, without a “yes,” “no” or “maybe” on the central question at hand.

By Friday morning, this had changed, and I got a “your personal information may have been impacted by this incident” notification. Progress. Except as my friend Justin Soffer pointed out on Twitter, you can enter a random name and number into the site and it will tell you the same thing. Indeed, I typed “Trump” and arbitrary numbers and got the same message.

So, yes, your worst suspicions are now confirmed. Equifax may actually make money on this breach. We would expect nothing less from the credit reporting industry, with which few of us would choose to do business but nearly everyone has to sooner or later.

The solution many people recommend is to freeze your credit reports—for a fee, multiplied by 4 to make sure you get all of the credit-reporting agencies. (Everyone has heard of Equifax, TransUnion, Experian...and Innovis. You've heard of Innovis, right? The one that doesn't offer a free annual report?)

Almost immediately, a team of lawyers including a former Georgia governor filed a class-action lawsuit. So have a group of plaintiffs in Oregon. We can also expect an action from the SEC relating to at least three Equifax managers selling their stock right before the announcement.

This situation is why we have government. The incentives for credit-reporting agencies run directly counter to the incentives of the hundreds of millions of people whose data they store. (You're not Equifax's customer; commercial enterprises are.) Without government regulation and higher liabilities for data breaches, this will just keep happening. But that's not "business-friendly," so the right-leaning American and British governments will dither for another few years until someone publishes the leaders' own data. Because their incentives are bad, too.

One week after Amazon's purchase of Whole Foods Market, what have we learned? Mainly that Amazon is great at marketing:

Amazon-owned Whole Foods wasted no time in reducing prices on certain food items across the store, including avocados, tomatoes, bananas, ground beef and eggs.

A few examples: At a Whole Foods in Evanston, a dozen white eggs went from $3.39 to $2.99; New York strip steak, from $18.99 a pound to $13.99; and organic bananas from 99 cents a pound to 69 cents.

But some analysts say the price cuts were mostly about creating buzz. Gordon Haskett Research Advisors, a New York-based market research firm, compared 114 items before and after the announced changes at a Whole Foods store in New Jersey and found an average price decline of only 1.2 percent, with 78 percent of the items unchanged from the previous week.

"As Amazon integrates Whole Foods' supply chain and distribution into its existing infrastructure, I think Prime members will become more willing to try Amazon's grocery platform, with the endgame being a higher Prime pricing tier. Still, I believe it will take some time before we can define the acquisition as a success," [said R.J. Hottovy, an analyst with Morningstar, a Chicago-based market research firm].

I went there Monday (see photo above), and saw some items marked down but otherwise not much changed. I'll be watching closely.

This past Sunday's New York Times magazine summed up the decline and imminent death of Sears. It's worth a read, though long-time readers of this blog know it's an old story.

The cashing-out consolidation of craft breweries continues with today's surprise announcement that Japan's Sapporo Holdings will acquire San Francisco's Anchor Brewing:

According to Keith Greggor, Anchor’s president and CEO, the move was a year in the making and the result of speaking with “many, many” larger breweries all over the world to find the right fit.

Anchor Brewing Co. is considered the leading pioneer of the craft beer movement, and is credited with reviving and modernizing some of today's most popular American beer styles. The price of the deal was not disclosed. Anchor Distilling, which produces spirits such as Junipero Gin and Old Potrero whiskey, is not involved in the deal and will become a separate company.

Anchor Brewing management said it did not specifically plan for a complete acquisition. However, to support the brewery’s long-term future and further international expansion (it currently distributes to 20 countries), it needed to relinquish full ownership to Sapporo.

When asked whether this deal jeopardizes Anchor’s “craft” designation, a commonly accepted definition dictated by the Brewers Association, the brewery’s executives did not seem concerned about that imminent debate, due to the brewery’s long history.

Well, yes, it jeopardizes the "craft" designation for the simple reason that Anchor won't be a craft brewer anymore, by definition. So, another one bites the dust. That leaves only about 5,300 other craft brewers in the U.S. Time to get drinking.

Scottish authorities are making it difficult for Donald Trump to expand his money-losing golf course outside Aberdeen:

Two Scottish government agencies—the Scottish Environment Protection Agency and Scottish Natural Heritage, a conservation agency—say they will object to the Trump Organization’s plans to build a second 18-hole golf course at Aberdeen, known as the Trump International Golf Links. If they succeed in killing this expansion, it will be a major setback for Trump and raise doubts about the future profitability of the whole venture.

Industry experts say the value of many of Trump’s golf resorts is not in the daily management of the course itself but rather in the development and sale of housing. And according to the 2008 master plan that Trump convinced local planning officials to accept, he needs to build two courses before he is allowed to break ground on the profitable housing development. 

But with the Trump Organization back to trying to get the second golf course built, Scottish regulators are making the case that Trump apparently doesn’t fully understand the development limitations. According to the Guardian, the Scottish Environmental Protection Agency is objecting to the Aberdeen expansion on the grounds that the Trump Organization’s plans for managing sewage are inadequate. Scottish Natural Heritage, meanwhile, says the company’s expansion plans don’t take into account the fragility of the nearby dunes and how they may affect the course as they shift—already a recurring problem on the first course, where greens are strafed by mini-sandstorms. 

It turns out, Scots are really hard to bully, and (as the headline above says), they really do not like him.

I just saw a comment on a review site listing the following as a "con" for a particular Web-based product:

I really feel like this company doesn't fix problems that only affect a couple of customers. Instead they prioritize fixes that affect the whole system and only fix specific problems when they have time.

Yes. Also, you might be interested to learn that businesses try to make profits by selling things for more than it cost to obtain them.

On behalf of the company in question—a small business in Chicago whose principal constituents are non-profit organizations with budgets under $1m—you're either new to this whole "commerce" thing or you have a magnificently droll sense of humor. Either way, good day to you, sir. I said good day!

While I'm trying to figure out how to transfer one database to another, I'm putting these aside for later reading:

• Chicago Magazine thinks global warming could be worse for Illinois than previously thought. (But we're still going to do better than Florida.)
• Citylab reviews Sarah Williams Goldhagen's new book on the science behind appreciating architecture.
• Conservative (!) columnist Jennifer Rubin believes her party can no longer defend our national interests or our Constitution.
• Krugman once again points out the cruelty and fraudulence of the Obamacare repeal bill.
• New York Times business columnist James Stewart lays out the problems Ayn Rand-inspired managers are having. (He doesn't mention my business-world bête noir, however. My real bête noir is also not mentioned.)
• And James Fallows realizes he has to jump into the fight once more, now that he's back in DC after a six-month absence.

Back to database analysis and design...

The Tribune reported yesterday that Dev Bootcamp, an immersive software-development school, is shutting down after their next class graduates in December:

Dev Bootcamp’s final cohort will start classes this month and graduate in December. Campuses officially close on Dec. 8, according to the email, signed by Dev Bootcamp President Tarlin Ray. Graduating students will also get “at least six months of career support,” the letter said.

“(D)espite tremendous efforts from a lot of talented people, we’ve determined that we simply can’t achieve a sustainable business model without compromising our mission of delivering a high-quality coding education that is accessible to a diverse population of students,” the letter said.

Dev Bootcamp was never profitable, Nishimura said. The Kaplan acquisition [in 2014] gave Dev Bootcamp flexibility, but ultimately, faced with the prospect of cutting back full-time instructors and raising tuition, the company decided to shut down.

I have four co-workers who have ties to Dev Bootcamp, including one who wrote parts of the curriculum. They report that Kaplan's aggressive expansion into markets outside Chicago and San Francisco drew resources away from existing programs, driving students and faculty away. For example, one intriguing offering, "Engineering Empathy," which sought to teach budding coders how to work on teams and with clients, got cut during the rapid-expansion phase.

The three alumni in my office are some of the best coders I've ever met. So I'm sorry to see Dev Bootcamp go. I hope that in future someone creates a program as effective as theirs.